Lexington native convicted of fraud involving a billion-dollar company is back in jail
A Lexington man who once headed a billion-dollar company before going to federal prison is back in custody again, records show.
Charles E. Johnson Jr. was arrested Wednesday in Minnesota and lodged in the Sherburne County Jail, according to a jail record.
The jail site does not list any charges but notes Johnson is being held for federal authorities.
Johnson had been released on bond in Lexington after he was charged with violating release conditions following his 2008 fraud conviction. But a federal prosecutor had moved to revoke his release for alleged violations, including gambling and traveling out of Kentucky without permission.
Johnson waived removal to Kentucky during a hearing Thursday, according to a court record, but the jail site in Minnesota still showed him as lodged there early Friday.
Johnson is a Lexington native who founded a company called PurchasePro that provided software for companies to make sales and purchases on the internet. The company reached a market worth of $1.2 billion during the dot-com boom of the late 1990s, making Johnson a wealthy man with a Las Vegas mansion and a private airplane.
However, the company went bankrupt in the early 2000s and federal authorities charged that Johnson had inflated the value of the company.
He was convicted in 2008 of conspiracy, securities fraud, witness tampering and obstruction, sentenced to nine years in prison and ordered to pay $9.7 million in restitution.
The sentence included a period of supervised release after his prison term, and that has gotten Johnson into new trouble.
In 2019 the federal probation office accused him of spending money at a casino even though he had paid little of the restitution he owed. He was sentenced to 10 more months in prison and placed on a renewed period of release supervised by the U.S. Probation Office.
Last August, a federal grand jury in Lexington indicted him on new charges of failing to provide required financial information to the probation office, a crime punishable by up to five years in prison.
Johnson was released under certain conditions, which included not leaving the federal Eastern District of Kentucky — roughly the eastern half of the state — without permission.
A federal probation officer said in a March 21 report he had received information that Johnson violated his release conditions, including going to a casino in Ohio.
Assistant U.S. Attorney Paul McCaffrey filed a motion March 30 to revoke Johnson’s release, saying that records from the Hard Rock Casino in Cincinnati showed Johnson gambled there in February.
Johnson didn’t have permission to leave the district, according to the motion.
Johnson failed to show up for an April 14 hearing on revoking his bond, according to court records.
McCaffrey said in an April 13 document that there were “serious questions about (Johnson’s) whereabouts.”
Growing up in Lexington, Johnson led Lafayette High School to the Kentucky boys’ basketball championship in 1979.
