ST. GEORGE – A federal judge ordered Jeremy Johnson to serve 11 years in federal prison Friday in connection with one of the state’s most high-profile white collar crime cases.
A jury convicted Johnson in March on eight courts of making false statements to a bank. He was acquitted of 78 other chargers related to fraud, money laundering and conspiracy.
U.S. District Judge David Nuffer also sentenced Johnson to three years supervised probation upon his release from prison. Johnson is also ordered to pay $603,543 in restitution. That amount accounts for the money that was collected in eight bank accounts attached to the St. George businessman’s conviction.
Co-defendant Ryan Riddle was sentenced to serve six years in prison after being found guilty of six charges of making false statements to a bank. Like Johnson, Riddle was also acquitted of a mass of charges in March.
Scott Leavitt, another co-defendant, was found not guilty of all charges filed against him.
The charges are related to Johnson’s I Works online marketing company that sold information on how to apply for federal grants and other moneymaker possibilities. When the company began to experience a high level of credit chargebacks (people demanding refunds), it was placed on a warning list for banks not to do business with them.
Federal prosecutors have said Johnson and the others attempted to get around this by creating shell companies using the names of employees, friends and family members in order to create the new accounts.
The Federal Trade Commission launched an investigation into the matter that resulted in Johnson’s arrest at the Phoenix airport in 2011.
Johnson spent 96 days in jail before being allowed to post $2.8 million in bail that was secured by properties put up by his family and friends. He then began a news and social media campaign to denounce what he considered government abuses by federal regulators and prosecutors.
The effort led the court to placing Johnson under a gag order prohibiting him from talking about the case.
In 2012, Johnson said lead prosecutor Brent Ward began threatening him with indictments against family, friends and employees if he did not accept a deal in which he would plead guilty to bank fraud and money laundering and receive an 11-year prison sentence.
The defense filed several motions seeking to get the case dismissed for a variety of reasons. Among the motions were allegations of prosecutorial misconduct, missing evidence and complaints the government was too slow to bring the case to trial.
A motion to dismiss the case was also filed because the government had seized thousands of private emails between Johnson and his attorneys, according to court documents. Prosecutors argued that while they had possession of the emails, they had not read them or made use of them for their case.
Nuffer denied all of the defendants’ motions to dismiss the case.
Following the jury trial, some jurors have said they believe Judge Nuffer’s conduct was biased toward the prosecution, according to The Salt Lake Tribune.
Attorney’s for Johnson, who were hired after his conviction, called for a new trial, claiming Nuffer’s conduct, as described in affidavits from jurors, violated their client’s right to a fair trial. A motion asking for a new trial was not granted.
Johnson’s name has also become synonymous with one of the state’s biggest political scandals in recent years involving former Utah Attorneys General Mark Shurtleff and John Swallow.
Johnson alleges that Swallow was going to arrange a bribe of then U.S. Senate Majority Leader Harry Reid, D-Nevada, on behalf of the St. George businessman. Allegedly it was hoped the Nevada senator would use his influence to get the Federal Trade Commission off Johnson’s back.
The accusations triggered multiple investigations into Shurtleff and Swallow’s conduct, and led to accusations of both men asking for gifts and donations from people who were facing investigation by the Utah Attorney General’s Office. The scandal ultimately led Swallow to resign as the attorney general after barely a year in office.
Both men were arrested and charged with offenses related to public corruption in June 2015. Swallow and Shurtleff have both professed their innocence throughout the investigation and subsequent court cases.
Charges against Shurtleff were dropped Wednesday by the Davis County Attorney’s Office. Prosecutors moved to dismiss the case due to lack of evidence and claims that the U.S. Justice Department refused to hand over requested evidence it had gathered in a previous investigation.
Swallow asked for his case to be dismissed last April.
St. George News Assistant Editor Kimberly Scott contributed to this story.
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