A court-appointed receiver is suing the parents of St. George businessman Jeremy Johnson, alleging they are holding on to several million dollars that their son improperly transferred to them from his now-shuttered Internet sales business.
The suit sets up a two-court battle over money, gold and silver that Johnson gave to his parents in what prosecutors and regulators contend was an attempt to hide assets of his I Works company. The company generated $332.5 million in sales from 2006 through 2011, including about $50 million profit that went to Johnson, court documents say.
Johnson contends the money and precious metals in dispute in the receiver's lawsuit and one by his parents seeking the return of assets seized in a raid by Internal Revenue Service agents were legitimate gifts. He contends they were made before an investigation began by the Federal Trade Commission that led to an ongoing lawsuit against him and I Works in 2010 and before a subsequent indictment on a mail fraud charge.
"That is legitimately my dad's property, no matter if it came from me," Johnson said in an interview. "The taxes were filed. It's his."
Johnson is being sued in federal court in Las Vegas by the Federal Trade Commission for allegedly defrauding consumers through I Works by charging them fees they had not agreed to or that were not properly disclosed when they made an online purchase.
Now, the court-appointed receiver who is charged with marshaling any assets of I Works and Johnson, the law firm of Robb Evans & Associates, says that around September 2008 Johnson transferred gold, silver, precious metals or coins worth $1 million to Kerry and Barbara Johnson. It also contends the parents received nearly $800,000 in other payments, while another $102,526 went to help pay off a mortgage on a Santa Clara home and $1.7 million went for acquisition of shares in the SunFirst Corp., owner of the defunct SunFirst Bank.
Robb Evans claims the transfers were fraudulent because they were made with the "actual intent to hinder, delay and defraud existing and future creditors." The receiver wants the Johnsons to turn over the money and precious metals.
Jeremy Johnson claims, however, the lawsuit arises out of the frustration of the receiver, who has not been able to find any hidden assets since the Las Vegas court ordered them frozen and turned over to the receiver.
"He spent $2.5 million," Johnson said. "He can't find one single fraudulent transfer from the time the court ordered my assets frozen. They can't find one I've tried to access, hidden, anything because it doesn't exist."
Kerry Johnson sued the federal government in March, seeking the return of $1 million in silver seized from his home as part of the criminal investigation into his son. Johnson argues the silver seized in July 2011 is his and not Jeremy's as alleged by federal prosecutors.