| Johnson pleads not guilty | |
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David DeMille ddemille@thespectrum.com The Spectrum | |
St. George businessman Jeremy Johnson pleaded not guilty Thursday on felony mail fraud charges connected to an alleged Internet scheme that reportedly cost consumers millions of dollars. Johnson, facing charges from the Federal Trade Commission that he and his business partners bilked customers out of nearly $300 million over the past decade, was indicted in June on a single count of mail fraud. IRS agents arrested him at an airport in Phoenix last month, with $26,400 cash on hand and a one-way ticket to Costa Rica, leading prosecutors to argue that he is a risk to leave the country. Medlodie Rydalch, public information officer for the U.S. District Attorney's Office in Salt Lake City, said prosecutors consider Johnson a "flight risk and economic danger to the community." A hearing is scheduled for Monday before U.S. Magistrate David Nuffer in Salt Lake City to determine whether the 35-year-old man will remain behind bars while awaiting trial. The court assigned Salt Lake City attorney Nathan Crane to serve as Johnson's public defender. Johnson's attorneys argue that he was carrying the cash because of the difficulty in transferring money to Costa Rica, that there is nothing illegal about carrying money and that he frequently uses one-way tickets on business because it saves money if he has to change return dates. Johnson grew up in Utah, has his family in Utah and has never shown any evidence that he intends to run, said Travis Marker, Johnson's St. George attorney. "He always intended to remain in Utah, his home base," Marker said. Johnson faces a maximum penalty of 20 years in prison and a $250,000 fine if convicted of the mail fraud charges, based on the accusation that he sent computer software through the mail that made false claims to customers about them being able to pay for personal expenses with government grants. Johnson was well known in Southern Utah for using his helicopters to aid search-and-rescue missions and helping with incidents such as last winter's floods in Washington County. He flew supplies to Haiti after an earthquake last year and has frequently aided members of the media with access via the air to news events. In December, FTC officials alleged Johnson and nine other defendants had run "a far-reaching Internet enterprise that deceptively enrolls unwitting consumers into memberships for products or services and then repeatedly charges their credit cards or debit funds from their checking account," with Johnson called the "mastermind" of the operation. Major credit card companies reported that they had received hundreds of thousands of customer complaints tied to websites Johnson operated, and while the credit card companies reimbursed about $75 million to customers, the FTC complaint indicates $275 million remains unpaid. Since the FTC first levied the charges, Johnson has declared his innocence, contending that he took every effort to meet the agency's demands when developing websites, especially because he knew his companies were under scrutiny. Johnson reached a settlement with the Securities and Exchange Commission in 2000 that included heavy fines for his company, and Johnson said in December that he had been trying to comply with FTC demands since the agency started its investigation last February. | |
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TheSpectrum.com Originally published July 8, 2011 | |
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