BULLETIN: FTC Asks Judge For Permission To Amend IWorks/Jeremy Johnson Fraud Complaint To Include Johnson’s Wife And Parents As Relief Defendants

breakingnews72BULLETIN: (UPDATED 6:25 P.M. ET U.S.A.) The FTC has asked a Nevada federal judge for permission to amend the complaint in the 2010 IWorks Inc./Jeremy Johnson civil-fraud case to include Johnson’s wife, parents and five corporate entities as “relief defendants” — the alleged recipients of ill-gotten gains from Johnson’s alleged Internet fraud scheme involving hundreds of millions of dollars.

Utah has been abuzz over Johnson news since the Salt Lake Tribune reported on Jan. 11 that Johnson asserted that Utah’s new Attorney General “helped broker a deal in 2010 in which Johnson believed he was to pay Senate Majority Leader Harry Reid $600,000 to make a federal investigation into Johnson’s company go away.”

Attorney General John Swallow, who was a Deputy Attorney General under former Attorney General Mark Shurtleff when the alleged bribery bid occurred, has denied wrongdoing and has asked for an investigation by federal prosecutors in Utah. Sen. Reid, of Nevada, has issued a statement through his office that he “has no knowledge or involvement regarding Mr. Johnson’s case,” the Tribune reported.

Swallow had been Attorney General only days before the Johnson allegations surfaced. Swallow is a Republican; Reid is a Democrat. Johnson effectively made the claim at a hearing during which he was expected to plead guilty to criminal charges earlier this month, triggering a media firestorm in the state.

Johnson did not enter a guilty plea. He remains free on bond.

The FTC, a longstanding target of Johnson’s ire, announced today that it wanted to amend the complaint.

  • Sharla Johnson, Johnson’s wife, “received at least $5 million in funds and property” from her husband’s scheme, “including a multi-million-dollar, 20,000-square-foot mansion in St. George, Utah, subsequently used to secure a $3.1 million home equity line of credit,” the FTC said.
  • Kerry Johnson, Johnson’s father, “received at least $1.6 million in funds and property, including about $1 million worth of silver coins and bars,” the FTC said.
  • Barbara Johnson, Johnson’s mother, received at least $77,500, the FTC said.

Five other businesses with ties to Johnson and/or his family also received ill-gotten gains, the agency said. In all, the FTC is seeking $22 million from the prospective relief defendants.

Johnson long has denied wrongdoing in a case that, at a minimum, has showcased the logistical nightmares government agencies and court-appointed receivers may confront when they tackle an alleged Internet-based fraud scheme with tentacles all over the world, including shell companies allegedly set up to carry out a fraud scheme. (See Jan. 9, 2012, PP Blog editorial. See Dec. 22, 2011, PP Blog editorial.)

See the FTC’s proposed amended complaint.

See Feb. 8, 2012, PP Blog report: Receiver In Jeremy Johnson/IWorks Fraud Case Issues Devastating Report; Incredible Number Of Firms Referenced In 79-Page Court Update; ‘Dozens Of Companies Used As Conduits To Re-Route Revenue And To Commingle And Hide Funds,’ Document Claims

 

 

About the Author

Leave a Reply