Johnson may be granted bail
 
Kevin Jenkins
The Spectrum
 
ST. GEORGE - St. George businessman Jeremy Johnson may be able to bail out of jail next week while he awaits a trial date on a federal mail fraud charge.

Johnson, 35, is accused of being the mastermind behind a massive online financial scheme in which he allegedly used the U.S. mail system to ship a variety of products tied to his company iWorks.

Johnson has been held in the Davis County Jail without possibility of bail since his arrest in June while preparing to board an international flight in Phoenix.

The government alleges iWorks used false information to market its products to customers, including shell corporations designed to mislead bankers who were growing increasingly reluctant to allow the company to use credit and debit card transactions over the Internet after a growing number of customers sought refunds for fees that were charged to their cards without their authorization.

Johnson's public defender, Salt Lake City attorney Nathan Crane, said he and the U.S. Attorney's Office are discussing options for allowing Johnson to make bail, and a new hearing in Salt Lake City's federal District Court has been scheduled before Judge David Nuffer for Wednesday morning.

"We think we're close to agreement on a bond proposal," Crane said Friday afternoon.

"All of Jeremy's assets have been frozen by the federal District Court. ... The bond will be a combination of properties from friends and family members that they're posting on Jeremy's behalf," Crane said.

Crane said no information has been released yet on how much Johnson would have to post to be able to make bail, but it would be "substantial." Nuffer has previously refused to allow a $1.2 million bail bond.

"(Prosecutors) are double checking to see if the value of the (bondable) property is what we say it is," Crane said. "Jeremy looks forward to getting out and having his day in court."

Crane also complained at the hearing about a phone call made by a Federal Trade Commission investigator to Johnson at the jail.

The FTC is pursuing civil litigation against Johnson in Las Vegas related to his company's activities, claiming he engineered at least $275 million in online fraud by billing customers for products they didn't order.

"It's against ethical rules for an attorney to contact a person who's represented (by counsel)," Crane said. "That issue was addressed at the court this morning and the (US) Marshals are looking into it."

The hearing also addressed the sharing of evidence collected by prosecutors as part of the case, U.S. Attorney's Office Public Affairs Officer Melodie Rydalch said.

"The government has produced more than 8 million pages of discovery, with more to come," Crane said.

A summary report about the evidence provided by Rydalch outlines numerous CD-ROMs, computers, cell phones and thumb drives received by the U.S. Attorney's Office and many more expected back from computer forensic investigators by the end of the month.
 
TheSpectrum.com
Originally published September 9, 2011
 
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