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A federal magistrate on Monday refused to allow St. George businessman Jeremy Johnson out of jail while he faces a criminal indictment for running an online sales enterprise that the federal government claims defrauded consumers out of tens of millions of dollars.
But Judge David Nuffer said he would consider releasing Johnson on a $1 million property bond as Johnson fights a federal charge of mail fraud in connection with the operation of I Works and related companies that the Federal Trade Commission contends fraudulently brought in $350 million from consumers.
At the end of a hearing that lasted several hours, Nuffer said he was not convinced Johnson posed a danger to the community either financially or physically. But the judge said Johnson appeared to have the financial means and the ability as a pilot to easily flee the country.
"I do not believe the defendant can be released," the judge said.
Johnson has been jailed for 31 days since his arrest last month in the Phoenix airport with $26,400 in cash in his luggage and a one-way ticket to Costa Rica. But his attorneys say the money was to start a helicopter-tourism business and that he frequently flies on one-way tickets to avoid change fees.
The Federal Trade Commission also has sued Johnson, his business associates and related companies alleging that the products they sold online were practically worthless and that consumers found that after a minimal payment their credit cards or debit cards were charged unauthorized monthly fees.
The U.S. Attorney's Office for Utah contends that Johnson is a risk of fleeing to other countries and should be detained pending resolution of the fraud charge, based in part on a series of recent trips to Costa Rica.
IRS Special Agent Jamie Hipwell testified he was told by St. George residents that the family had purchased a home in Costa Rica, taken their daughter out of school and intended to live for some time in the Central American country.
"I believe he was traveling there to reside with his family for a number of years," Hipwell said.
Johnson's attorney, Nathan A. Crane, poked holes in several of Hipwell's statements, saying Johnson had a short lease on a Costa Rican home but did not own one there.
Hipwell then acknowledged he did not believe Johnson was trying to flee at the time of his arrest.
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