Feds hit St. George businessman Jeremy Johnson with 86-count fraud indictment

SALT LAKE CITY — Federal prosecutors unloaded on one-time multimillionaire Jeremy Johnson and four associates Wednesday with an 86-count indictment for fraud involving his former Internet marketing company.

The U.S. Attorney's Office vowed to file new charges against the St. George businessman after a proposed plea agreement on an earlier fraud charge fell apart in January.

In addition to Johnson, the indictment names Scott Leavitt, Bryce Payne, Ryan Riddle and Loyd Johnston, all of whom worked as executives at Johnson's once-thriving online enterprise, iWorks. Charges include conspiracy, bank fraud, wire fraud and money laundering.

Riddle called the charges a "vendetta" against Johnson.

"We have known for many months that we were on (federal prosecutor) Brent Ward's hit list of people he would indict if Jeremy Johnson did not plead guilty," he said in a email. "It is very clear that we are only being prosecuted because the plea deal failed with Jeremy. We have done no wrong."

U.S. Attorney for Utah David Barlow said no threats were made. The U.S. Attorney's Office had no comment on the new indictment.

Johnson, 37, has declined to comment since a federal judge warned him againt talking to the media pending a decision on a gag order prosecutors are seeking in the case. He and his colleagues are is scheduled to appear in court April 10.

Johnson touched off a political scandal in January when he accused Utah Attorney General John Swallow of helping arrange a $600,000 payment to enlist Senate Majority Leader Harry Reid in an effort to derail a Federal Trade Commission investigation into iWorks. Swallow adamantly denies the allegation. Reid has disavowed any knowledge of Johnson's case.

The U.S. Attorney's Office acknowledged earlier that the FBI and the Department of Justice are investigating.

The new charges are centered on Johnson and iWorks. Swallow is not mentioned.

The indictment mirrors a civil complaint the Federal Trade Commission filed against Johnson in December 2010. The complaint, which also named Leavitt, Payne, Riddle and Johnston, claims iWorks bilked online consumers for nearly $300 million.

In the criminal indictment, prosecutors allege iWorks used numerous websites to tout bogus government grants that were available to stop foreclosures and to pay down debt and for personal expenses such as groceries, home repairs, utilities and Christmas presents. The sites claimed the grants could be accessed through a CD offered for a $2.29 shipping fee.

"Many customers who ordered iWorks grant CDs found the CD was not what it was represented to be," according to the indictment. "They also found that their credit cards had been charged, or debited, not only for the shipping fee, but also larger amounts for monthly memberships and other products they did not know about or intend to purchase."

The FTC shut down iWorks in 2011 and seized all of Johnson's assets, including helicopters and airplanes, luxury cars, cash and gold.

Johnson has maintained his innocence throughout the civil and criminal cases. He was originally charged with one count of mail fraud in connection with iWorks. He spent three months in jail after his arrest in June 2011. His family and friends put up a $2.8 million property bond to free him pending trial.

In January, Johnson intended to plead guilty in a deal with the U.S. Attorney's Office. He claims Ward had a "hit list" of people, including Riddle, Payne, Leavitt and Johnston, he would go after if Johnson didn't cooperate.

The agreement crumbled when federal prosecutors balked at listing by name Johnson's wife, parents, Swallow and others he wanted protected from prosecution should he admit to bank fraud and money laundering.