Jeremy Johnson faces new Internet fraud charges

SALT LAKE CITY (AP) -- A federal grand jury on Wednesday stacked dozens of new Internet fraud charges on a Utah businessman who just months ago rejected a plea bargain and complained he had paid a bribe to make the case go away.

Jeremy Johnson was hit with 85 fraud and money laundering counts in a new indictment that adds four business associates who weren't previously defendants in the case.

Prosecutors say Johnson's businesses used the Internet to fraudulently enroll millions of people in get-rich schemes by charging their credit cards without authorization. He was originally indicted nearly a year ago on three counts of fraud and money laundering.

Johnson has maintained his innocence. He rejected a plea deal in January with explosive allegations of misconduct against federal and state prosecutors.

He accused newly elected Utah Attorney General John Swallow of being part of a high-level bribery scheme that Johnson complains failed to derail a federal investigation into his business practices.

Swallow was barely a week in office when Johnson made his complaints widely known. The U.S. attorney's office said it's investigating and asked a federal magistrate to put Johnson under a gag order.

U.S. Attorney David Barlow says Johnson is using a blog, website, Facebook page and Salt Lake City media outlets to wrongly accuse the government and its prosecutors of misconduct.

U.S. Magistrate Judge Paul Warner has set a March 12 hearing on the gag order.

Prosecutors got their payback Wednesday when the grand jury added the new charges of bank and wire fraud, conspiracy, and money laundering.

The St. George businessman was ordered to appear in federal court in Salt Lake City on April 10.

"We intend to defend it vigorously in the court and not in the media," Johnson's lawyer, Ronald Yengich, said in a statement Wednesday.

Yengich is new to the case. Johnson lost four other lawyers who quit the case last month for reasons they explained only to a magistrate in private chambers.

The new indictment expands on the Internet fraud prosecutors say Johnson orchestrated for years.

His company, iWorks, set up websites offering what it called free money from the government. They claimed that people could win government grants and use the money to stop foreclosures, pay down debt, purchase real estate, launch businesses, cover medical expenses, and even pay grocery bills and Christmas presents.

"Claim you money today," the websites advertised, according to the indictment. "Billions are given away every year — now you can get your share!"

IWorks sold "risk-free software" on a CD for a $2.29 shipping charge that claimed to show people how to claim money from the government.

Prosecutors say all the claims were without merit and the CD was useless, but buyers found their credit cards being charged monthly for "membership fees."

IWorks got in trouble with a number of banks over a high percentage of reverse charges ordered by angry customers. Johnson continued doing business by creating new business names and websites to re-establish credit-card processing accounts, prosecutors said.

When the Federal Trade Commission opened an investigation, Johnson sought advice from Swallow, who at the time was deputy chief of the Utah attorney general's office.

Swallow has said he referred Johnson to another businessman who could put Johnson in touch with lobbyists who could influence the FTC to drop its investigation.

Johnson said he paid $250,000 through an intermediary that was meant to bribe Senate Majority Leader Harry Reid to quash the federal investigation.

He later tried to enlist Swallow to recover his money, saying it bought him no protection.

Swallow and Reid have denied the complex allegations.

Johnson has also publicly accused Brent Ward, the federal prosecutor handling the case, of incompetence and misconduct. Ward signed the new indictment Wednesday against Johnson.