Nevada ruling in Johnson case could bring Swallow deposition within 6 Weeks

Nevada ruling in Johnson case could bring Swallow deposition

By Sammy Linebaugh
For the Deseret News
Published: Wednesday, June 19 2013 10:00 p.m. MDT
Updated: 19 minutes ago

SALT LAKE CITY — A judge in the U.S. District Court of Nevada ruled Wednesday against federal prosecutors who sought to delay the civil case against Jeremy Johnson and his fellow defendants connected to the St. George online marketing company iWorks.
The decision leaves open the possibility that Utah Attorney General John Swallow could be subpoenaed in the case in the next six seeks, the timeframe given to complete depositions in the case.
Federal prosecutors in Utah had sought to halt the case, saying it could “wreak havoc” on parallel criminal proceedings against Johnson, iWorks and four other former iWorks employees in Utah’s Federal District Court.
But the iWorks defendants argued that would unfairly delay their case, perhaps for years, and they want to pursue depositions and other "discovery" in the case and clear their names.
“This is about getting into court. It’s about letting people see the true story. The government doesn’t always get it right,” said attorney Karra Porter, who represents iWorks in the Nevada civil case.
“Now the parties can move on and get a trial date without having to wait years,” she said Wednesday.
In her ruling, Nevada Judge Miranda Du wrote, “[T]he Court is mindful that it was the government’s decision—not Defendants’—to bring both (lawsuits) simultaneously.”
The Nevada civil suit against Johnson and his fellow defendants was brought in December 2010, while the Utah criminal case was filed roughly six months later, in June 2011.
In the civil FTC complaint in Las Vegas, the FTC contends iWorks bilked online customers of nearly $300 million. The 86-count criminal indictment in Salt Lake City alleges fraud.
The parallel cases have witnesses, facts and legal issues in common, which prompted a motion in April by government lawyers to halt the civil case while the criminal case proceeded. Du ruled on the motion Wednesday.
Johnson, who is acting as his own attorney in the Nevada case, as well as Porter, who represents iWorks and the majority of its defendants, can now resume depositions, which allows them to interview witnesses under oath in the presence of attorneys.
Johnson previously has sought to depose Swallow in the case, claiming in court documents, “[Swallow] became exceptionally well-versed in the dealings and details of the iWorks’ operations and the company’s fervent efforts to not just be in compliance with the law, but be leaders in the online marketing industry.”
Evidence submitted by Johnson to support the claim includes an email in which Swallow appears to be pitching joint ventures with iWorks, namely a payday loan marketing plan and a Cash for Gold project.
Swallow’s attorney, Rod Snow, has previously said the ventures never materialized and that Swallow had never intended to profit from the deals, but was only trying to connect his friend and former boss, Check City owner Richard Rawle, with iWorks marketing operation.
Neither the U.S. Attorney’s Office for Utah or Nevada were able to be reached for comment.


United Kingdom Newspaper "Jeremy Johnson A Local hero and 'Christ-like' millionaire"

Local hero and 'Christ-like' millionaire (London)

An internet marketing millionaire from St George, Utah, has been accused by the Federal Trade Commission of being the 'mastermind' behind one of the biggest cases of online marketing fraud ever perpetrated in America.
Jeremy Johnson, 37, has become known in his native Utah for his selfless acts of heroism, including mounting his own relief mission to Haiti after the earthquake in 2010, and literally giving the shoes off his feet.

But according to the FTA, the money Johnson has so generously donated wasn't his to give, and had in fact been amassed by luring online customers with promises of free CD-ROMS for which they only had to pay a nominal shipping fee. These customers' credit cards would then be charged for recurring monthly memberships they hadn't agreed to and weren't aware of.

Alleged scam: Indicted St. George businessman Jeremy Johnson walks to the federal courthouse before a hearing Thursday, June 13, 2013, in Salt Lake City
Alleged scam: Indicted St. George businessman Jeremy Johnson walks to the federal courthouse before a hearing Thursday, June 13, 2013, in Salt Lake City

Over a five-year period, the company of which Johnson was founder and CEO, I Works, allegedly stole more than $275 million from customers, and discouraged them from seeking compensation from their credit card companies by threatening to report them to a website called - a site run by I Works.
And while Johnson's philanthropy was well-known, his lifestyle was not exactly humble. According to The New York Times, he owns a 22,000-square-foot home in a gated community in a St. George suburb, a 1957 Chevrolet Bel Air and other classic cars, houseboats and helicopters. His case files contain statements from witnesses alleging he 'amassed bundles of cash and buried caches of gold'.

    It's a fall from a great height for the six-foot-tall, red-headed Johnson, who appeared to be casting himself into the 'affable millionaire' mold by rescuing stranded mountaineers in his helicopter and housing people fleeing from Utah's polygamous communities.

    'When I think of Jeremy Johnson, I think of the most generous person I ever met,' Daniel Gardner, an assistant loan officer in Provo, Utah and friend of Johnson, told The New York Times. 'Whatever he had, he would give and give and give.'

    Gardner described Johnson, who he met as a boy scout, as 'one of the most Christ-like people I have ever come to know.'
    Philanthropy: Here, Johnson works to provide aid for people affected by the Haiti earthquake in 2010
    Philanthropy: Here, Johnson works to provide aid for people affected by the Haiti earthquake in 2010

    In addition to the FTA investigation, Johnson and five of his associates are now facing 86 related criminal charges, including making false statements to bank, wire fraud, bank fraud, engaging in fraudulent banking activities, conspiracy to launder money and money laundering brought by the United States attorney in Utah. 

    Johnson categorically denies any wrongdoing in both cases. According the the Times, court filings by his lawyers say the FTC's case is 'filled with half-truths, distortions and inflammatory rhetoric that is not supported by the evidence.' 
    According to The Salt Lake Tribune, the company allegedly set up 80 'shell accounts' to accept payments without being detected.

    'They had no employees, they had no office locations, they were mail drops,' Collot Guerard, the lead FTC attorney on the lawsuit, told the Tribune.

    'They were essentially fronts, and they didn't have any substance to them other than lending their name to obtain a new merchant account when Jeremy Johnson and I Works were no longer able to get merchant accounts.'

    Johnson's business offered customers catalogs of government grants and information about how to apply for them. Once someone signed up for a catalog, to be delivered via main on a CD-ROM, they were then given one week to cancel their membership, after which they were signed up for membership to various different programs which all charged a monthly fee. 

    Denial: Johnson has denied any wrongdoing in the case against him, in which he allegedly swindled more than $275 million from unwitting consumers
    Denial: Johnson has denied any wrongdoing in the case against him, in which he allegedly swindled more than $275 million from unwitting consumers
    This is legal - if the marketing material makes full disclosure to the customer and the customer consents. 
    But according to federal prosecutors, I Works-affiliated sites often displayed disclosures in very small print, and sometimes didn't disclose the information at all. 
    According to The New York Times, the FTC began investigating I Works in 2009 after Visa noticed an ever-growing number of customers wanting to reverse charges for online membership programs, called a 'chargeback'. 
    It was difficult at first to link the chargebacks to I Works, since the company was operating under so many different names and so many different programs, including Easy Grant Finder, Bottom Dollar, Business Funding Success, Fast Gov Grants, Cloud Nine Marketing, CPA Upsell Inc., Employee Plus and many, many more, according to court papers. 

    I Works was closed after the charges were brought, but according to prosecutors, Johnson transferred many of his assets, including gold bullion and his home, into the names of his parents and his wife, Sharla, who have now been named as 'relief defendants' by prosecutors for receiving ill-gotten gains.

    Johnson went on the offensive after being indicted. According to The Salt Lake Tribune, he launched an online campaign to clear his name. He accused federal prosecutors of threatening to indict his family if he doesn't plead guilty in his criminal case and accused a FTC attorney of tampering with witnesses in YouTube videos, created an website which he promoted on Twitter, made a Facebook page where people can make negative comments about the United States Attorney for the District of Utah and conducted interviews with reporters in which he reiterated the points he's made online. 

    Federal prosecutors grew weary of this and a federal judge granted a gag order against Johnson and his associates to prevent them from commenting publicly about the case. 

    According to the Tribune, Johnson has been arrested twice since he was charged in 2010: 'once in a Phoenix airport attempting to leave the country en route to Costa Rica, a few months after receiving a federal indictment for mail fraud' and again 'in Washington County for an outstanding Nevada warrant, which was issued after he bounced several bad checks meant to cover more than $100,000 in gambling losses at a Las Vegas casino'.

    The FTC case against Johnson in the District Court of Nevada is ongoing, and the criminal charges against him will be pursued at its conclusion.

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    UPDATE: The Jeremy Johnson Case Blows Up Worldwide.. I wonder how that happened? New York Times

    Hey! Its Jeremy Johnson and Nevada Senator Harry Reid!
    Hey! What do ya know, Its former Utah Attorney General Mark Shurtleff in Jeremy  Johnson's  New Ride

    UPDATE: The Jeremy Johnson Case Blows Up Worldwide.. I wonder how that happened?  From The New York Times, Posted by Robert Paisola, Western Capital Media USA
    Jeffrey D. Allred/Deseret News, via Associated Press

    THE morning after a catastrophic earthquake leveled buildings and killed thousands of people in Haiti in 2010, an Internet marketing millionaire from St. George, Utah, named Jeremy Johnson decided to cancel all his business meetings and arrange his own ad hoc aid mission.

    Mr. Johnson, 34 at the time, had never traveled to Haiti before. But his decision to stage a private airlift, using his own aircraft, did not surprise his friends and family. They were used to his impulsive acts of magnanimity.
    Six feet tall, with unruly red hair and a toothy grin, Mr. Johnson was well-known around St. George for deploying his own helicopter to rescue hikers stranded in nearby canyons and for housing families fleeing from polygamous communities. One local resident who befriended Mr. Johnson when they were both Boy Scouts described him as “one of the most Christ-like people I have ever come to know.”
    In Haiti, Mr. Johnson piloted his own helicopter, flying infant formula to remote orphanages, evacuating injured children and delivering 110-pound bags of beans and rice to outskirts of Port-au-Prince, said another friend, Daniel Gardner, who joined him on the mission. On the last day of the 12-day trip, Mr. Johnson gave away personal possessions — a baseball cap, his iPod — down to the hiking boots he had been wearing, Mr. Gardner recalled. Mr. Johnson flew home with his feet clad only in striped Paul Smith socks.
    “When I think of Jeremy Johnson, I think of the most generous person I ever met,” said Mr. Gardner, an assistant loan officer in Provo, Utah. “Whatever he had, he would give and give and give.”
    But what Mr. Johnson had to give — and it was quite a bit — may have come from consumers who got taken. The Federal Trade Commission says Mr. Johnson was “the mastermind” behind one of the largest and most intricate online marketing frauds ever perpetrated in the United States.
    Mr. Johnson founded and ran a company called I Works, which, the agency says, marketed programs to help people get government grants for personal needs and earn easy money. According to a civil complaint filed by the F.T.C., the company lured consumers with online pitches for free or “risk-free” CD-ROMs that required only a nominal shipping fee and then charged their credit cards for recurring online memberships they were unaware of and had not consented to.
    Over five years, Mr. Johnson, along with I Works, company executives and related corporations, supposedly swindled “unwitting consumers” out of more than $275 million, the complaint said. The company also discouraged dissatisfied customers from seeking refunds from their credit card companies, the complaint said, by threatening to report those customers to a company-operated consumer blacklist called
    All the while, proceeds from the enterprise were used to finance Mr. Johnson’s “lavish lifestyles” of helicopters and houseboats, classic cars and poker at a Las Vegas casino, according to a receiver’s report to the court on Mr. Johnson’s assets. Some details in the case file read as if they came from an Old West novel: according to testimony from a witness, Mr. Johnson supposedly amassed bundles of cash and buried caches of gold.
    “This is the anatomy of a really interesting fraud done by a clever guy at the expense of the most vulnerable people,” asserted David C. Vladeck, a professor at the Georgetown University Law Center who worked on the case in his previous job as director of the F.T.C.’s Bureau of Consumer Protection.
    Mr. Johnson has repeatedly and vehemently denied any wrongdoing; a court filing by his defense team describes the F.T.C.’s argument as “filled with half-truths, distortions and inflammatory rhetoric that is not supported by the evidence.” The purpose of, for instance, was simply to steer people to his customer service centers, he said in a court filing.
    In addition to the F.T.C.’s civil case, taking place in the United States District Court of Nevada, he is now facing related criminal charges — including conspiracy, money laundering and bank fraud — brought by the United States attorney in Utah. Mr. Johnson has denied those charges, too.
    “We did not commit any fraud whatsoever,” he wrote in an e-mail to an F.T.C. lawyer in 2011.
    Over the last 19 months, in an attempt to clear his name, Mr. Johnson has mounted a campaign that accuses federal agents of misdeeds, including interfering with his right to a fair and speedy trial. Because of his jeremiads, federal prosecutors asked a judge in federal court in Salt Lake to prohibit him from further public commentary. In May, the judge imposed the order on Mr. Johnson, along with others in the criminal case including defendants, defense lawyers and prosecutors, prohibiting them from making public statements about the case.
    Melodie Rydalch, a spokeswoman for the United States attorney in Utah, said federal prosecutors could not comment on the criminal case because of the order. Peter Kaplan, a spokesman for the F.T.C., declined to comment on its case “given the posture of the litigation.” But in hundreds of court filings, federal regulators paint a portrait of I Works as an enterprise that went to great lengths to lure online users even as consumer dissatisfaction mounted. Rather than modify their business practices, an F.T.C. court filing says, “defendants adopted strategies that allowed their fraud machine to continue reaping millions of dollars from unsuspecting customers.”
    Ronald J. Yengich, Mr. Johnson’s criminal defense lawyer, declined to comment, citing the judge’s order. That leaves Mr. Johnson’s friends and family members to plead his case with the public. Mr. Gardner, for one, says he doesn’t recognize the portrayal of his friend that he reads about in the papers.
    “I want you to know him the way I know him,” Mr. Gardner said when I called him recently to ask about the Haiti trip. “He doesn’t have an ounce of selfishness in his body.”
    Where friends see a hero, however, consumer advocates like Professor Vladeck, the former F.T.C. official, see a swindler.
    “I can’t decide if he was completely venal or completely clueless,” said Professor Vladeck, a lawyer who has argued First Amendment and civil rights cases before the Supreme Court. “Either he is a great actor or he thought all of this was just fine.”
    A Gifted Proselytizer
    In the early 1850s, Jeremy Johnson’s great-great-grandfather, a sawmill operator named Joel Hills Johnson, helped settle the desolate territory of southern Utah, a landscape of dramatic red sandstone canyons and mesas. Johnson descendants have lived in the area ever since.
    When Mr. Johnson was growing up in St. George, about a two-hour drive from Las Vegas, the town had fewer than 30,000 residents. While the population has since more than doubled, the place retains a small-town intimacy. During my visit there in April, everyone I met seemed to have some connection to — or at least an opinion about — Mr. Johnson. Even a barista at a local espresso joint told me that his mother was a friend of Mr. Johnson and that they had attended parties at the Johnsons’ home.
    Andy Johnson, one of Mr. Johnson’s three younger siblings, still lives in the area, and invited me over.
    He didn’t talk about the lawsuits — he worked for his brother at I Works and is one of the defendants in the civil case — but he was happy to tell stories about their childhood. He recalled the time the brothers were horsing around at home, sliding down the stairs in a cardboard refrigerator box. When a baby sitter came over, Andy Johnson says, his older brother tossed his shoes into the farthest end of the box and then sniffled that he couldn’t reach them.
    “He whipped up some tears and told her ‘my shoes are in the box,’ ” Andy Johnson recalled. When the baby sitter crawled in to retrieve the shoes, the brothers gave the box a gentle push downstairs. “I think that was the end of the baby sitter.”
    Jeremy was also the kind of child who would set up a lemonade stand only to give away the proceeds, family members say. The Johnsons are members of the Church of Jesus Christ of Latter-day Saints, and their faith emphasizes service. Yet Jeremy’s drive to give to others always seemed singular, his brother said.“He doesn’t care what it looks like to other people,” Andy Johnson said. “He just tries to do the right thing.”
    Mr. Johnson credits the two years he spent as a Mormon missionary in Independence, Mo., with giving him a hands-on education in marketing; being a missionary allowed him to meet and talk to all kinds of people, says his cousin Nathan Ruben.
    By all accounts, Mr. Johnson was a gifted proselytizer. He started his first online venture in 1999, when he was just 23. The company was a penny-stock recommendation site called Subscribers who paid to join would post rumors about companies on the site. Then the site’s researchers, one of whom was Andy Johnson, would check the validity of those rumors and follow up with their findings.
    RumorSearch attracted several thousand members. It also led to a complaint by the Securities and Exchange Commission. The agency contended that the site had misleadingly promoted a stock and failed to disclose that Mr. Johnson had received thousands of that company’s shares in compensation — and had sold them at a profit of $315,848. In 2002, Mr. Johnson settled the charges without admitting or denying them.
    By then, Mr. Johnson had closed RumorSearch and started I Works, another enterprise with an online membership model. Apparently, he developed the idea of marketing a digital clearinghouse for grants while watching a TV pitch for grant books.
    “He saw one of those infomercials where this guy was selling catalogs of government grants for $99,” recalled Paul Ruben, an uncle of Mr. Johnson and a software engineer in Murray, Utah. “He said: ‘That’s the crummiest delivery system I can think of. I can do a lot better with a subscription base and people could sign up and cancel when they didn’t need it anymore.’ ”
    I Works made Mr. Johnson a wealthy man. According to a report prepared by the receiver in the civil case, I Works generated more than $50 million in profits that benefited Mr. Johnson or was transferred to his affiliates. The report said he spent the money on, among other things, a 22,000-square-foot home in a gated community in a St. George suburb; an office building downtown called Tabernacle Towers; a car lot; houses and land in various parts in Utah; a house in Santa Monica, Calif.; land near Idaho Falls, Idaho; two houseboats; a 1957 Chevrolet Bel Air and other cars; gold bars and coins; and silver coins and palladium bars. He also lost about $1.3 million at a Las Vegas casino and donated $1.5 million to a local church ward, according to the report.
    Now the F.T.C.’s allegations of fraud have some Utahans wondering whether Mr. Johnson financed his endeavors with ill-gotten gains.
    “He did a lot of good out of the country. So you don’t know,” John Miller, a retiree in St. George, told me one Sunday morning as he was filling up his car at a local gas station. “If he’s guilty of what he is accused of, he’s a crook.”
    ‘I Felt I Had Been Scammed’
    In late 2008, Nicky Miller went looking for a way to open a center for children with disabilities. She had recently lost her job as a pharmacy technician but, before that, she worked for years as a special-education teacher and administrator. She wanted to put that training to use. She just needed financing.
    Ms. Miller said she landed on a Web site that featured a photograph of President Obama and offered a free CD-ROM with information on how to find and apply for federal grants. She also said she saw testimonials on the site from consumers enthusing over the grant money they had received. It seemed legitimate to her. After all, Congress had passed a stimulus package that year to buttress the economy.
    All she would have to pay, she thought, was $2.29 for shipping and handling.
    A few days after signing up, Ms. Miller received a disk in the mail titled “Your Federal and Private Grant CD,” a program marketed by I Works. She looked at the information on the disk but, she says, it was too general to be of use to her.
    “It was a waste of time,” Ms. Miller, who lives in Minden, Nev., told me recently. She didn’t think about it again until a few months later, when she checked her bank account statements and noticed debits of $221.52 from entities with names like Grant Search, Center 4 Grants and Business Fund.
    She was unemployed at the time and had been watching her spending carefully. Those unexpected charges wiped out her funds, she said, and piled on $245 in bank overdraft fees.
    “I was shocked,” Ms. Miller said in a declaration submitted as evidence in the civil case by the F.T.C.
    She called Center 4 Grants and learned from a customer service representative that when she ordered the CD, she had been enrolled in different online membership programs — one for $39.95 a month, another for $12.95 a month. The memberships came with free trial periods, which typically allowed people to cancel within a week or two without incurring charges. But Ms. Miller said she did not recall seeing disclosures about memberships when she ordered the disk. Eventually, a call center representative canceled the memberships for her and issued a partial refund.
    “I felt I had been scammed,” Ms. Miller, 60, told me.
    Other consumers who gave declarations to the F.T.C. received order confirmations for I Works grant CDs that mentioned memberships.
    Many companies — like wireless carriers or streaming video services — use similar continuity plans, in which charges recur until a consumer cancels. It’s a standard practice called “negative option” or “advanced consent” marketing. Bundling additional products with an order, a practice called “forced upsells,” is also a standard marketing practice. Both practices are perfectly legal if the marketing is truthful, the disclosures are adequate and the consumer consents.
    In Mr. Johnson’s case, federal regulators contend that I Works-affiliated sites often displayed the disclosures in small print — and sometimes failed to disclose them at all.
    “The scam, operated by 10 individuals through 61 companies,” an F.T.C. memorandum to the Nevada court says, “has tricked consumers into providing their credit and debit card information and has repeatedly billed these consumers for Internet-based memberships they never agreed to join.” At its height, “the scheme was ensnaring 15,000 consumers per day,” the document says.
    The complaint also contends that promotional testimonials from satisfied customers were false. Mr. Johnson, court filings say, had created his own grant program. Called Grant-A-Day, it gave money to individuals for things like utility bills or college textbooks. The testimonials on the sites, court filings say, came from people who received money through this program, not from government grants. (Court filings for the defense don’t deny that assertion, but contend that the testimonials were nonetheless authentic and came with disclaimers like “results may vary.”)
    Mr. Johnson, who has denied any wrongdoing, wrote in an e-mail to the agency in 2011 that he had attended an F.T.C. workshop in Washington in 2007 on how to comply with marketing regulations for programs with recurring fees and that his Web sites had displayed clear disclosures.
    “I attended your conference on negative options. We hired attorneys to review our Web sites to insure they were compliant,” Mr. Johnson wrote in the e-mail. “We never, at any time, used a false testimonial, and we did not ever develop a Web site without all the terms and conditions of the offer clearly disclosed.”
    Karra J. Porter, a lawyer in Salt Lake City who represents I Works, Mr. Johnson’s wife and parents, and 24 other companies named as defendants in the case (though not Mr. Johnson), said the disclosures were prominent enough that, out of some 10 million membership enrollments, I Works’ customers canceled about three million during the free trial period.
    Mr. Johnson’s family members and friends say his private philanthropy, like the Grant-A-Day program, is powerful testimony to his good intentions. When business was flush, they say, he even liked to give out $100 bills to needy strangers shopping at the local Walmart during the Christmas season.
    But Mr. Johnson’s accusers do not see a contradiction between his charitable acts and their allegations that he defrauded consumers. They see a connection.
    “There is a Robin Hood aspect to Jeremy’s behavior,” said Professor Vladeck, the former F.T.C. official — the difference being that Mr. Johnson, he asserted, defrauded needy consumers to give to the needy.
    ‘Roads Led Back to St. George’
    In late December 2010, Mr. Johnson flew emergency supplies to people stranded by floods in southern Utah. A few days later, the F.T.C. filed its suit against him.
    Flooding Hero Sued by F.T.C. in Alleged Internet Scam,” a headline in The Salt Lake Tribune read. That same week, the Deseret News newspaper, despite acknowledging the lawsuit, placed Mr. Johnson atop its list of people who “made a difference” that year and symbolized “the greatness Utah has to offer.”
    It was as if there was no reconciling the local hero with the man charged with running what the F.T.C. described in a court filing as a “well-oiled fraud machine.”
    Mr. Johnson founded I Works in 2000. But it wasn’t until 2009 that federal regulators began looking into the company in earnest. That year, Visa noticed a growing number of cardholders seeking to reverse charges — a procedure called a chargeback — for certain online membership programs.
    If customers reverse 1 percent or more of a merchant’s charges, the banks that process its credit and debit card transactions may terminate the company’s accounts and place it in a terminated-merchant file — a blacklist that reduces the company’s ability to obtain new merchant accounts. That is what befell a number of I Works entities.
    But federal regulators did not immediately connect the various high chargeback rates to I Works itself because the company was operating under so many different names and programs: Easy Grant Finder, Bottom Dollar, Business Funding Success, Fast Gov Grants and many more, according to court filings.
    “At the time we started, we did not know that all roads led back to St. George,” said Professor Vladeck, the former F.T.C. official.
    The F.T.C.’s pursuit of Mr. Johnson is part of a larger law-enforcement crusade to rid online marketing of malefactors. Over the last few years, the agency has shut down a number of online operators who marketed free trials and then charged sizable recurring fees.
    Last year, Central Coast Nutraceuticals, a company that used free trials and negative options to market acai berry supplements and “colon cleansers,” settled F.T.C. charges that it had defrauded consumers out of $80 million. Federal regulators also won a $359 million judgment against an online marketer in Canada who, the agency said, lured consumers in the United States and four other countries with offers of “free trials” for weight-loss pills, teeth whiteners, information about government grants and a work-at-home program.
    But Professor Vladeck says Mr. Johnson led a vastly more complex enterprise; a receiver’s report to the court describes it as a “spider web of entities.” In the civil suit, the F.T.C. contended that Mr. Johnson and associates incorporated more than 50 shell companies — using mail-drop addresses and straw owners — to trick merchant banks into setting up new merchant accounts.
    Mr. Johnson has denied this. He has told family members that I Works opened new companies and merchant accounts to root out fraud among several hundred marketing Web sites that I Works regularly used to steer customers to its own product sites.
    “By creating different entities, they would be able to identify more easily who was committing fraud against them,” said Ms. Porter, the lawyer for I Works. “This is a recognized method of combating fraud.”
    Industry experts say it would make more sense for online marketers to scrupulously vet affiliated Web sites before letting them promote their products, so they wouldn’t need to set up new merchant accounts after the fact to look for affiliate fraud.
    “You shouldn’t have to do that,” said John Engler, the vice president for sales at LiveIntent, a company that delivers ads in e-mail. “You should run a better business.” Mr. Engler, a 15-year veteran of online marketing, said he was speaking generally about industry practices, and not about any particular company. (I Works had a compliance department that vetted affiliated Web sites.)
    Soon after the F.T.C. filed its suit, Mr. Johnson closed I Works. A couple of months later, agency lawyers persuaded a judge in the case to grant a preliminary injunction, effectively shuttering I Works, and to appoint a court-supervised receiver to take charge of the assets so that money would be available for refunds to consumers should the F.T.C. prove its charges. The court also prohibited Mr. Johnson from marketing grant programs, among other things, pending the case’s outcome.
    That was the moment when Mr. Johnson’s supporters say they became convinced that federal officials were out to railroad him. By depriving him of his money, the F.T.C. had stripped him of his ability to pay for a lawyer to defend himself against the government’s allegations, Mr. Johnson wrote in a court filing in May. Although he has a court-appointed lawyer in the criminal case, he is now representing himself in the civil case.
    F.T.C. lawyers, however, have contended in court filings that Mr. Johnson still has access to substantial finances because he transferred assets, like ownership of his home as well as $1 million in silver bars and coins, to family members and associates. For that reason, the F.T.C. in January named Mr. Johnson’s parents and his wife, Sharla, as relief defendants in the civil case. They are “not charged with participating in the I Works scheme,” the agency said, “but allegedly received ill-gotten gains from it that the F.T.C. seeks to recover.”
    The receiver, a company called Robb Evans & Associates, based in Los Angeles, says I Works has proved to be one of the most complicated asset-tracing cases it has ever tackled. In addition to benefiting from the more than $50 million in profits from I Works, the receiver contended in a report, Mr. Johnson routed about $51 million in additional funds to other companies or individuals.
    “A significant amount of money was filtered through a number of entities in an apparent attempt to conceal assets,” Brick Kane, the president of Robb Evans, told me. The receiver’s pursuit of the assets is an expensive endeavor: it has charged $3.9 million in fees and expenses through the end of last year that comes out of the I Works receivership. “We are still tracing,” Mr. Kane says. “There are still unanswered questions in this case.”
    Ms. Porter, the lawyer for I Works, said that there was nothing untoward — or even unusual — about the company moving assets through holding companies and other entities.
    “The funds that were used to pay for services or gifts that were given to his parents years before the F.T.C. alleges any wrongdoing,” she says. “What is the basis for seizing that?”
    Recently, however, a judge in the civil case denied a motion from a former business associate who had asked to separate money in which his businesses claim an interest from the receivership; the judge said the money properly belonged to the receivership.
    Fighting Back, Undaunted
    Mr. Johnson still lives with his wife and their two daughters in their Tuscan-style manor with an outdoor pool and pond in a suburb of St. George. Well-fed orange tabby cats strut about the grounds like royal peacocks, as if they owned the place.
    Mr. Johnson has not been making his mortgage payments, and there is a lien on the house. Friends and family members, including Mr. Ruben, his uncle, put up about $2.8 million of their own property as a bond to secure his release from jail after he was arrested in the summer of 2011 on one count of mail fraud.
    While his living situation seems precarious and his legal troubles unlikely to go away soon, Mr. Johnson has been anything but resigned. He has been tweaking his accusers with a high-profile campaign to clear his name.
    It began with an e-mail sent at the end of 2011 to various federal officials, more than a dozen United States senators and a handful of journalists. The e-mail came from an official-sounding account: But Mr. Johnson had registered the address. And he had an announcement.
    Rather than sign a settlement agreement being proposed by the F.T.C., he wrote, he and other defendants were preparing to publicly accuse federal agents of serious misconduct. They had even set up a Web site for this purpose. They called it
    “We will no longer remain silent and let you mislead the media with your lies and deceit,” Mr. Johnson wrote in the e-mail included in court filings. “We are compiling documentation to prove that we are innocent of your allegations.”
    By then the site, along with an accompanying Twitter feed of the same name, had gone live. Mr. Johnson used the power of free speech and the ease of the Internet to try to reposition himself as a victim of a government conspiracy rather than a businessman accused of deceptive marketing.
    The site came with a tagline: “Dirty Deeds by Big Government.” In addition to rebutting the F.T.C.’s allegations, it leveled accusations of its own. The site contended, for instance, that the leading F.T.C. lawyer in the case had improperly called Mr. Johnson while he was in jail, interfering with his right to due process. (Professor Vladeck said the “F.T.C. had no choice but to contact Jeremy directly” because the agency believed Mr. Johnson was acting at that time as his own lawyer in the civil case.)
    When F.T.C. lawyers investigated, they discovered that Mr. Johnson, along with his brother Andy Johnson and others, had registered at least 30 domain names — including and Calling Jeremy Johnson’s activities “shenanigans” and “harassment” (and his opinions “meritless and scandalous”), government lawyers filed an emergency motion, asking a judge to shut down the sites.
    Judge Roger L. Hunt of the Federal District Court denied the F.T.C.’s motion in the main, ruling that Mr. Johnson could continue to express his opinion as long as the sites did not misrepresent themselves as government entities. Mr. Johnson has since toned down
    Mr. Johnson had won the first skirmish in his campaign against the government, but the judge did admonish him not to go too far. Referring to a site that Mr. Johnson had set up to criticize the receiver, which he called “,” Judge Hunt said, “You need to understand, sir, you are accused in this case of using the Internet to deceive people.”
    The judge added: “When you use this procedure, process of multiple Web sites, which, in the court’s view, deceive or intended to misrepresent or deceive or mischaracterize the court, its appointed receiver or a governmental agency, it’s going to be difficult for you to convince me that you do not use the Internet to deceive at the time of trial.”
    But the judge’s warning did not seem to daunt Mr. Johnson’s campaign. In January, a video appeared on YouTube accusing federal prosecutors in the criminal case of threatening Mr. Johnson and his family with the aim of pressuring him to accept a plea deal. (Prosecutors have publicly denied the accusations.)

    “Jeremy felt it was better to get the truth out than to sit and be quiet, which is not his nature,” said Mr. Ruben, his uncle.
    Lumberjacking, for Now
    The government seems determined, too. Federal prosecutors have asked Judge Miranda Du of district court in Las Vegas to stop almost all discovery in the civil case. If she decides in the government’s favor, the civil suit would effectively be put on hold while federal prosecutors pursued the criminal charges. Banned from marketing grant programs while the cases proceed, Mr. Johnson recently bought a portable sawmill on eBay and is lumberjacking in forests near where his great-great-grandfather had a sawmill. But he has not disappeared into the woods.
    Where many other online marketers who sold similar products using similar techniques eventually agreed to settle F.T.C. charges of deceptive practices, Mr. Johnson continues to proclaim his innocence.
    “Imagine for a moment the possibility that I have done no wrong,” he recently wrote in a report prepared for a police detective in Salt Lake City. In that event, he said, government officials would be to blame for ruining his business, seizing and selling his worldly goods, putting him in jail and, perhaps most significant to a marketer for whom believability is everything, diminishing his reputation “from one that was known for good to that of a mastermind of a $300 million fraud.”
    The canyon lands of Utah seem to breed legendary characters who write their own rules. One of them, born in 1866 and called Robert LeRoy Parker, later took the name Butch Cassidy.
    “The leader of the Wild Bunch was a friendly, gay, reckless and coolly daring young man whom everyone liked, even the sheriffs who chased him,” Wallace Stegner wrote of the outlaw in his book “Mormon Country” in 1942. “He thumbed his nose at pursuing posses.”
    “I would hate to think there is someone bigger than Jeremy out there that we missed,” said Professor Vladeck, the former F.T.C. official. “In this field, Jeremy is a whale.”

    Robert Paisola, (born December 3, 1967), is an American business Motivational Speaker, philanthropist, and the Chief Executive Officer of Western Capital. Robert Paisola is the founder of the Robert Paisola Foundation and serves as its Chairman. Paisola is a noted media analyst on the topics of the 2012-2013 Recession, Foreclosure In America, and the business of Timeshare. Robert Paisola is an International Personality speaking around the world on the Principles of The Hit Movie "THE SECRET" 

    Robert Paisola is driven by a passion for people--motivating them to reach for the highest standards of success. As founder and president of many International Corporations including Western Capital and The Success Training Network, and now, Western Capital Multimedia, the parent company of Rene Magazine located at , Robert trains sales and marketing professionals who want to strive to get to the top...and stay there.

    He is a Nationally Recognized Criminal Rights Activist and is very involved with assisting inmates and their families who have been abused by the justice system.

    His innovative, no-nonsense approach is based on applying what he has observed in his fifteen-plus years in sales, motivational speaking and debt collection training, thus revealing the common business habits of the top 20% of sales performers in all organizations.

    While in Mexico, he uncovered a large time share "fractional sales" scam at the Playa Del Sol Grand Hotel. His report is located at:

    He is also a noted authority on ethics in the Time Share Industry, as evidenced by The Timeshare Chronicles at 

    Robert's unique approach to solving complex corporate problems works...that's why New York-based Success Magazine has rated Robert Paisola as one of the top-five most effective sales-training professional in the market today.

    Robert Paisola's newest book was just released and is available on CONVERSATIONS ON SUCCESS was co-authored with famed author Dr. John Gray and Mr. Tom Hopkins. His newest book, BLUEPRINTS ON SUCCESS is scheduled for release in 2014

    Robert Paisola speaks on an International Basis to support his foundation, The Western Capital Foundation. He is also a noted speaker on the topic of Group Dynamics, Change Management, Investing, Real Estate, Asset Protection and Stock Investments.

    Routinely Distinguished by The National Speakers Forum, Robert is also a regular contributor to Business Week Magazine, XM Satellite Radio, The Wall Street Journal, Telemundo International, National Public Radio and many other organizations. Robert Paisola is also an International Travel Writer and Certified Expert for magazines such as Conde Nast Publications and The National Geographic Society. His award winning investigative reporting articles have gained him worldwide recognition.

    He remains at Western Capital as a part-time, non-executive chairman.
    If you are in a financial crisis and you or your company require immediate assistance because you are being investigated by the government watch this video and email Mr. Paisola at or call 702-741-1230  immediately:

    1. In Utah, a Local Hero Accused

      New York Times (blog)-Jun 15, 2013
      “When I think of Jeremy Johnson, I think of the most generous person I ever met,” said Mr. Gardner, an assistant loan officer in Provo, Utah.
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      The Federal Trade Commission says that Jeremy Johnson, a Utah businessman, committed fraud by luring consumers with online pitches for ...
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      (KUTV) Southern Utah businessman Jeremy Johnson appeared in federal court in Salt Lake City Thursday and got a stern warning from the ...

    5. E-Mail Suggests Swallow Courted Jeremy Johnson For Business ...

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      (KUTV) Utah Attorney General John Swallow has tried to distance himself from indicted UtahBusinessman Jeremy Johnson ever since ...

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      Deseret News-Jun 14, 2013
      Federally-indicted businessman Jeremy Johnson walks from the ... United States Attorney for the District of Utah" on Facebook — were not ...

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    9. Union bosses threaten Hurricane Sandy cleanup contractors, their ...

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      1. Wife's website critical of feds could land Jeremy Johnson in jail 13, 2013
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        Daily Caller-15 hours ago
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        Former Vice President Dick Cheney declared National Security Agency whistle-blower Edward Snowden ”a traitor” and questioned whether ...

      8. Kim Kardashian had a baby

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      10. Republicans seek to end federal ethanol mandate

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