Convicted businessman Jeremy Johnson headed to jail, possible long prison term
April 4, 2016
SALT LAKE CITY — U.S. marshals escorted convicted felon Jeremy Johnson to jail Friday pending a June sentencing hearing, which appears likely to end in a long prison sentence for the one-time wealthy Internet entrepreneur.
Johnson pleaded with U.S. District Judge David Nuffer to let him remain free, sobbing at one point while talking about family and friends who have stood behind him the past five years. Some of them helped put up a $2.8 million property bond to secure his release from jail after he was first arrested in 2011, and offered another $1.8 million piece of property in court Friday.
"I would never risk these people's livelihoods and their homes so I could go live a life on the run without my family and the people I care about," he said.
But Nuffer found that Johnson engaged in a pattern of deception and has shown a "complete lack of integrity." He has access to large amounts of cash, hidden precious metals in secret places, conducted back-door deals to make money and vast international travel experience, the judge said.
"He always has a reason and he always has an excuse, and he can't be trusted," Nuffer said.
The judge said Johnson firmly believes his own views but they are "borderline delusional."
A jury last week found Johnson guilty of eight counts of making false statements to a bank, but acquitted him of 78 fraud charges.
The eight-man, three-woman jury also convicted former iWorks manager Ryan Riddle of six counts of making false statements to a bank. Former iWorks accountant Scott Leavitt was acquitted of all 86 charges against him.
Nuffer allowed Riddle to remain free pending sentencing, now scheduled for June 20. Johnson is being held in the Weber County Jail.
Johnson and Riddle face up to 30 years in prison, though federal sentencing guidelines rarely result in defendants getting the maximum sentence. On the low end, the judge could sentence them from zero to six months in prison.
But prosecutors told Nuffer they intend to seek a variety of aggravating circumstances that could result in a recommendation of 15 to 20 years behind bars for Johnson.
Nuffer already found that some of the aggravating circumstanced exist as part of his detention ruling, and he implied Friday that Johnson's prison term won't be short.
Johnson, 40, defended himself during the seven-week trial but requested an attorney for the sentencing phase. Magistrate Judge Paul Warner appointed Greg Skordas, who served as standby council to advise but not argue for Johnson during the trial.
"I thought we had a shot today, I really did," Skordas said. "We're only talking about 80 days 'til sentencing versus five years of basically showing up for everything."
Johnson spent three months in jail after authorities first arrested him on a single mail fraud charge in June 2011. Nuffer put him behind bars then for many of the same reasons he cited Friday.
Assistant U.S. attorney Rob Lunnen said afterward that the judge made the appropriate decision because Johnson consistently moved and hid money in other people's names.
Johnson isn't typical of white-collar criminals who aren't sent to jail before being sentenced, assistant U.S. attorney Karen Fojtik argued in court. He played blackjack in Las Vegas during the litigation, rents office space in a downtown building, tried to get into the federal prosecutors' offices after hours and has access to an airplane, all while claiming he has no money and getting court-appointed lawyers, she said.
A recreational helicopter pilot, Johnson surrendered his license to the court after he was arrested.
Skordas wrote off some of Johnson's "goofy" behavior as "Jeremy being Jeremy." Johnson, he said, doesn't always follow the rules. "But when he's charged with 86 felonies, he follows the rules."
Fojtik countered that "Jeremy lies. That's Jeremy being Jeremy."
Johnson explained to the judge that he went to Las Vegas because he received a voucher in the mail from a casino for a hotel room and $2,250 in chips. He said he took $1,000, "turned it into more and left."
Johnson admitted in earlier court documents to losing millions of dollars gambling.
As for hanging around the U.S. Attorney's Office, he said he likes to take walks and noticed someone coming out of the building one night about 7 p.m. He said he thought it was odd that the door would be unlocked and grabbed it to see.
Johnson conceded that he thought a lot about the people in the office and tried to "understand why they do what they do, say what they say."
Regarding the business deals, Johnson said court documents show he didn't try to hide them from the court in his parallel civil case in Nevada.
Fojtik also said Johnson tried to influence public officials, a reference to the issue that landed Johnson in the eye of a scandal that led former Utah Attorney General John Swallow to resign in December 2012.
Johnson accused Swallow of helping arrange a $600,000 payment for a friend to enlist then-Senate Majority Leader Harry Reid, D-Nevada, to intervene in a Federal Trade Commission investigation into Johnson's company, iWorks.
"I have never bribed any public official nor have I have I ever admitted to that," Johnson said in court Friday. He said he understood the deal involving Reid to be a "lobbying" effort.
Johnson's claims against Swallow and others regarding former Utah Attorney General Mark Shurtleff led to public corruption charges against both men.
Skordas argued that Johnson shouldn't go to jail because he's an important witness in those criminal cases. In a letter Skordas read in court, assistant Salt Lake County district attorney Chou Chou Collins wrote that prosecutors need ready access to Johnson to prepare for trial and that would be difficult if he's in jail.
Nuffer found that argument irrelevant.
Posted from SLTRIB / UTAH
Our Statement on this matter
I have known Jeremy since this whole fiasco started. I have NEVER seen a defendant walk into a sentencing hearing and offer ANOTHER 1.8 Million Dollars to remain free until his sentencing (90 days) I get the whole justice is essential issue, but the Court already released 2.8 Million in a prior hearing. HE DID NOT LEAVE NOR RUN! This is why so many companies are starting to avoid UTAH with their multi million dollar operations. People need to read the history of this case and THEN PASS JUDGMENT. Yes, Jeremy is going to do his time, but people HAVE to look at his conduct during the duration of this case.
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