Ex-millionaire's plea deal unravels in attempt to protect family, new A.G.
No reason for John Swallow to be on no-indictment list, spokesman says
Jeffrey D. Allred, Deseret News
SALT LAKE CITY — A court hearing at which erstwhile multimillionaire Jeremy Johnson intended to admit to federal fraud charges took a left turn Friday when he produced a list of people he wants protected from prosecution should he plead guilty.
The list included Johnson's wife, parents, friends, business associates — and newly sworn Utah Attorney General John Swallow, according to a copy Johnson provided to the Deseret News before the hearing.
Johnson, though, would not discuss why he included Swallow's name but said it involves money. Johnson's attorney, Nathan Crane, had no comment about Swallow's name being on the list.
Swallow declined to speak with the Deseret News on Friday. His spokesman, Paul Murphy, said Swallow did nothing wrong.
"This stuff has been bandied about since the political campaign," Murphy said.
Swallow, a Republican, has not asked to be on Johnson's list nor does he need to be on the list, he said. "He's not protecting John. He's damaging John."
Johnson approached Swallow for help when the Federal Trade Commission was investigating his St. George-based Internet marketing firm, iWorks, Murphy said, adding that Swallow put Johnson in touch with someone who does lobbying for the FTC and nothing more.
Murphy said no money exchanged hands between Swallow and Johnson.
Former GOP Attorney General Mark Shurtleff has relationships with both Johnson and Swallow, who served as his chief deputy until succeeding him as attorney general on Monday. Johnson contributed to Shurtleff's political campaigns and gave $50,000 to the attorney general's Internet Crimes Against Children task force.
Shurtleff said he and criminal prosecutor Kirk Torgensen met with Swallow regarding the allegations involving Johnson. Torgensen is now Swallow's chief deputy.
"I went to him and said, 'I need to know what you did do and what you didn't do,'" Shurtleff told the Deseret News last month. "There's things that Jeremy's saying and there's some documentation that may look bad and I think that's what people are basing it on. At the end of the day, I'm convinced John didn't do anything illegal."
The list Johnson tried to enter into the court record during Friday's hearing caused a stir among federal prosecutors. They balked at including any names of people Johnson wanted protected in a plea agreement in which Johnson was to admit to bank fraud and money laundering in connection with his once thriving company.
U.S. District Judge David Nuffer called a recess to allow the parties to negotiate. They came back about 90 minutes later and told him the deal was off.
Before the recess, prosecutor Brent Ward told the judge the U.S. Attorney's Office for Utah committed that there would be no further indictments against anyone else associated with iWorks.
"They wouldn't put it on the record. They said you gotta trust us," Johnson, 37, said after the hearing.
Ward, Utah's former U.S. attorney, said prosecutors would file an additional indictment in a month and asked the judge to schedule a trial in the fall. U.S. Attorney David Barlow would not say what those charges would be and whether anyone else would be indicted.
"We thought we had an agreement. We thought the agreement included protection for certain individuals by name," Crane said. "Jeremy didn't want anyone to go through what he's gone through. … Having the federal government over the top of you on a criminal case is not fun."
Johnson said in an interview before Friday's hearing that he is innocent and planned to plead guilty only to protect his friends and family, whom he says Ward threatened to arrest if he didn't cooperate.