SALT LAKE CITY — A defense attorney in the iWorks criminal case accused federal prosecutors Thursday of mistreating witnesses who don't tell them what they want to hear.
Marcus Mumford raised the issue during a hearing in U.S. District Court where the parties updated the judge on their progress in gathering and sorting voluminous amounts of evidence in the complex case.
Mumford told Judge Paul M. Warner that witnesses have described to him "abusive treatment" when they don't say what prosecutors want them to say in interviews. He didn't elaborate.
Warner replied that the way to handle allegations of prosecutorial misconduct is to file a motion. Lead prosecutor Brent Ward did not respond to the accusation.
The judge earlier issued a gag order to prevent the parties from talking about the case outside of court.
More fireworks are likely in the slow-moving and expensive case against iWorks founder Jeremy Johnson and four former associates — Scott Leavitt, Bryce Payne, Loyd Johnston and Ryan Riddle. All face 86 counts of bank fraud, wire fraud, money laundering and conspiracy in connection with the once-thriving Internet marketing company.
Prosecutors allege that iWorks used numerous websites to tout bogus government grants that were available to stop foreclosures, pay down debt and for personal expenses such as groceries, home repairs and utilities. 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."
None of the defendants appeared in court Thursday. Mumford represents Leavitt.
Ward again asked Warner to set a trial date, but the judge declined. He said he wants to give the five defense attorneys time to review iWorks documents and emails in four 6-inch binders and two DVDs prosecutors gave them this week. He scheduled the next hearing for Jan. 8.
The judge earlier asked Ward to sort the evidence to make it easy for each defense attorney to find the material pertinent to his or her client.
"We can do a lot of work for them, but I don't think we need to do all the work for them," Ward said, adding all the electronic files are searchable. "It's not that big of a job for them to find the documents that are most relevant to their clients."
Turning over evidence to the defense has been a sticking point from the outset, and again led to testy exchange between Mumford and Ward on Thursday.
Mumford claimed Ward earlier said prosecutors had not come across any information favorable to the defendants, which they must give to the defense should they find it.
"False," Ward said. "I didn't make such a statement."
"He says a lie," Mumford told the judge.
Warner said he believes both sides have dealt in good faith and will continue to believe that until he sees otherwise. He gave prosecutors until Oct. 6 to give the defense summaries of dozens of witness interviews.
A computer database also is being set up at the court's cost to give attorneys access to perhaps millions of pages of electronic documents.
"What you've got is a haystack. You're looking for needles in a haystack. You have to have a way to get into the haystack," Warner said.
Johnson and several former iWorks executives also are the subject of a Federal Trade Commission fraud complaint. The case is ongoing in Nevada.
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 the FTC investigation into iWorks. Swallow adamantly denies the allegation. Reid has disavowed any knowledge of Johnson's case.
At least five investigations into Johnson's accusations against Swallow and other alleged misconduct are underway at the federal, state and county levels.