SALT LAKE CITY — The St. George businessman who lit the fuse on investigations that prompted former Utah Attorney General John Swallow to resign and led to some of the criminal charges against him refused to testify Wednesday at his trial.
Lawyers for Jeremy Johnson told 3rd District Judge Elizabeth Hruby-Mills that he intended to invoke his Fifth Amendment right against self-incrimination, even though the state extended him immunity.
Johnson's lawyer, Mary Corporon, told the judge that the promise would mean "absolutely nothing" in the federal government's pursuit of him "with a vengeance" in other cases. Johnson, she said, is also appealing his criminal conviction that landed him in federal prison last year.
After some argument over immunity and prosecutors providing a Department of Justice letter agreeing not to use Johnson's testimony against him, the judge found no grounds for him to invoke a Fifth Amendment privilege and ordered him to take the witness stand.
But when deputy Salt Lake County attorney Fred Burmester asked Johnson questions, he replied: "I've been advised I shouldn't answer any questions in here today."
Hruby-Mills found Johnson in contempt of court and sentenced him to 30 days in the Salt Lake County Jail. She ordered him back in court Thursday morning to see if he would change his mind.
Whether in jail or federal prison in Taft, California, where he is incarcerated now, Johnson remains behind bars, though he apparently spent Tuesday night in a Salt Lake hotel under FBI supervision.
"I respect the court's decision. We'll see where we go from here," Corporon said on her way out of the courthouse.
Losing Johnson would be a significant blow to the prosecution's case against Swallow. Many of the state's charges are built around claims he has made.
Salt Lake County District Attorney Sim Gill said late Wednesday there's still a possibility Johnson could testify and that it would be inappropriate to comment on that issue and the progress in the case generally.
A previous grant of immunity worked against Johnson, Corporon said. Davis County Attorney Troy Rawlings gave him immunity in his investigation of former Utah Attorney General Mark Shurtleff and others. But she said federal agents then used the information against him.
"With all due respect, Mr. Johnson has been here before," Corporon said. "We can't leave him open to that."
Corporon said two FBI agents approached Johnson in the past few weeks about what his testimony would be in the Swallow case. She said her issue isn't with the state but with federal authorities.
"I think any citizen should have a healthy lack of trust for the federal government," she said outside the courtroom. "The FBI continues to have sort of tentacles into this man’s life one way or another, and that’s suspicious."
The Federal Election Commission has accused Johnson in a civil lawsuit of making illegal campaign contributions to Sen. Mike Lee, R-Utah, former U.S. Senate Majority Leader Harry Reid, D-Nev., and Shurtleff. The FEC named Swallow as a co-defendant, alleging he helped arrange the donations.
The Federal Trade Commission shut down Johnson's internet marketing company, iWorks, in a civil action.
Johnson accused Swallow — in his first week as attorney general in 2013 — of helping to set up a $250,000 payment to enlist Reid in an effort to get the FTC off his back. Swallow maintains he only introduced Johnson to a friend who could lobby the senator.
Johnson, who prosecutors say invested millions in troubled SunFirst Bank in St. George and started illegally processing online poker transactions, sought the attorney general's legal opinion on the practice. Swallow, who was chief deputy attorney general at the time, responded in a July 2010 email: "Jeremy, I am not aware of any such law in Utah that would prohibit what you are doing."
In 2011, Johnson approached Travis Marker, an attorney who specializes in mediation and dispute resolution, looking to help him resolve his case with the FTC. That summer, Marker met with Swallow about the parallel federal criminal case against Johnson on several occasions.
In a meeting at the state Capitol, Swallow told Marker that if Johnson gave him $120,000, there might be more options available to Johnson for resolving the criminal case, court documents allege.
Johnson ultimately went to trial last year on an 86-count fraud indictment. A federal jury acquitted him of all but eight counts of making false statements to a bank. He is serving an 11-year sentence in a federal prison in California.
Prosecutors also charged Swallow with illegally using Johnson's Lake Powell houseboat and a home in St. George.
Meantime, the list of potential witnesses in Swallow's public corruption trial includes a who’s who of Utah politicians.
But most of them are not likely to appear in the courtroom.
Sen. Orrin Hatch, R-Utah, Gov. Gary Herbert, Utah House Speaker Greg Hughes, R-Draper, Lt. Gov. Spencer Cox and Lee are among the names listed on a jury questionnaire as people who could be called as witnesses. Reid is also on the list of 120 names.
Most of those Utah politicians — all Republicans — have come up in the case at some point or have a connection to some of the players. None of them are on the witness list prosecutors filed with the court, so they presumably would be called by Swallow's defense team, if they're called at all.
Swallow's attorney, Scott Williams, said Wednesday that at this point he intends to call Hughes to testify, and possibly a couple of others if necessary.
Lee has not received a subpoena to testify, said his spokesman, Conn Carroll. Herbert and Cox also have not received subpoenas, according to the governor's office.
Hruby-Mills initially kept the 119-question jury questionnaire out of the public record at defense attorneys’ request but recently released it.
The document asked prospective jurors it they have a relationship with any of the potential witnesses. The court filing, however, does not include completed questionnaires, including those of the seven men and five women impaneled as the jury.
Swallow is charged with a dozen felonies, including racketeering, bribery, accepting gifts and money laundering. Rawlings dropped criminal charges against Swallow's predecessor, Shurtleff, last year.
Testimony in the case Wednesday started with prosecution witness Scott Reed, an assistant Utah attorney general. Much of the testimony in the trial so far has centered on Shurtleff and his “fixer,” Tim Lawson, who died last summer.
Reed testified that he was “perturbed” with Shurtleff’s "unusual" intervention in the 2005 criminal case against Marc Sessions Jenson. Jenson is a key witness for the prosecution who alleges Shurtleff, Swallow and Lawson extorted him for money and favors.
At Shurtleff's behest, Jenson received a sweet plea deal for selling unregistered securities that didn't include jail time or restitution. A judge rejected that as too lenient and imposed $4.1 million in restitution.
Williams spent Wednesday discrediting Jenson, one of the state’s key witnesses. He noted and Reed agreed that neither Jenson nor his lawyers ever brought up in court hearings the issue of him not paying $4.1 million in restitution or his claim that Shurtleff told him he didn’t need to pay.
Reed, who prosecuted Jenson, testified that “with all due respect,” that wasn’t the attorney general’s call.
Though Reed only talked to Jenson through his lawyers, he said he learned Jenson has a “reputation for untruthfulness” through conversations with others.
Reed said he learned that Jenson ran $8.9 million through his personal bank account during the time he owed restitution. Reed also said Jenson had 46 accounts in his name or the name of his business.
Jenson eventually spent four years in prison for failing to repay the money.
Williams asked Reed several times if Swallow had involvement in Jenson's plea deal. He answered no each time. Reed also testified that Swallow was "walled off" from the 2011 fraud case against Jenson over the failed multibillion dollar Mount Holly resort project. Jenson was acquitted on those charges.
Hughes, Herbert, Hatch
Hughes came up in Jenson’s testimony as someone he claims he saw in June 2009 at the exclusive Pelican Hill resort in Southern California and who attended a secret meeting with Reid, Shurtleff, Swallow, Utah Transit Authority officials and developers working on a train stop project.
Hughes has vehemently denied being there and offered proof that he was in Utah at the time. He has expressed a willingness to testify.
At a hearing last month, Swallow’s attorney asked FBI special agent Jon Isakson about a February 2009 letter that Herbert wrote for Lawson. Herbert, then the state’s lieutenant governor, vouches for Lawson’s character and considers him a friend in the letter to a capital investment firm. Witnesses have described Lawson as a bully who threatened them with physical harm.
Williams asked Isakson if he interviewed Herbert to compare his thoughts about Lawson to the narrative that he was a “crook.” Isakson said agents didn’t come across anything that would connect Herbert to the Shurtleff and Swallow investigations.
Hruby-Mills ruled last week against admitting the Herbert letter as evidence. But after Williams asked her to reconsider Wednesday, the judge allowed the letter without objection from prosecutors.
Hatch met with Johnson, Swallow and Shurtleff in 2010 to discuss the FTC probe into Johnson's business, but the senator’s office has said he did not intervene in the case. Cox, the lieutenant governor, oversaw a state investigation into Swallow’s campaign finances in his 2012 run for attorney general.