AG John Swallow made mistakes in dealings with businessman, Utah GOP says

Published: Wednesday, Jan. 23 2013 12:45 p.m. MST

Wright said he hopes elected officials will learn from Swallow's experience and make changes to avoid his situation in the future.

"As a citizen and a Republican, I would like to see lawmakers get serious about ethics reform in Utah," he said, adding those changes should be aimed at the state's four top executive offices.

Wright suggested full disclosure on all meetings for elected officials and their staffs; no private meetings; limits on campaign contributions; no gifts; a one-year cooling-off period for organizations that make a campaign donation before signing any state contract; and creation of an independent ethics commission.

The FTC alleges Johnson bilked consumers out of more than $275 million with deceptive "trial" memberships to bogus government grants and money-making schemes. Federal authorities shut down iWorks and seized all of Johnson's assets in 2011.

Johnson has refused to sign a settlement agreement with the FTC.

On Wednesday, the FTC proposed to amend its complaint to include Johnson's wife, Sharla, and his parents, Kerry and Barbara Johnson, and five companies authorities say they control. Authorities say the individuals and the companies received at least $22 million from iWorks, including a 20,000-square-foot St. George mansion, cash, and silver bars and coins.

In addition to the FTC civil complaint, Johnson was charged with fraud in criminal court in connection with iWorks. A plea agreement crumbled earlier this month when prosecutors balked at listing by name people, including Johnson's wife, parents and Swallow, he wanted protected from prosecution should he plead guilty to bank fraud and money laundering.

"This is their punishment to me and my family for not telling the judge I'm guilty of something that we all know I'm not guilty of," Johnson said Wednesday. "My parents have nothing to do with any of this."

Johnson said he assumes his wife and parents will now be arrested and charged with crimes. The FTC has already seized all of the assets listed in the new complaint, he said.

"The government's strategy is to make sure I don't get access to any money so I can't hire an attorney and, therefore, none of the facts in our case will ever be presented to a jury," he said.

After the plea agreement fell apart in court, federal prosecutors said they intend to file additional charges against Johnson. Prosecutors would not say whether anyone else would be indicted. The judge set a Feb. 8 deadline for any new charges.

E-mail: romboy@desnews.com

Twitter: dennisromboy

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