His court-appointed receiver says he did it to dodge the FTC.

By Tom Harvey

| The Salt Lake Tribune

In an effort to conceal $51.4 million earned mostly by processing online poker payments, St. George businessman and philanthropist Jeremy Johnson moved funds and gold coins and bars back and forth through dozens of shell companies, according to a court-appointed receiver.

Johnson tried to hide the funds and gold after the Federal Trade Commission sued other companies like his and then sent him a letter telling him to preserve all his assets as part of its investigation into his I Works operations, according to a report filed as part of a lawsuit in Las Vegas.

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Johnson on Friday denied the allegations, portraying the receiver as out of control and greedy, grabbing for funds it is not entitled to through the lawsuit in which the FTC has sued Johnson and nine former officers and employees.

That $51.4 million is in addition to the nearly $50.4 million in profits Johnson paid himself through I Works companies that sold products online to hundreds of thousands of U.S. consumers, according to court records.

The FTC sued Johnson and nine others in 2010 in federal court in Las Vegas alleging that he sold products online for a minimal handling fee and then charged large unauthorized amounts on consumers’ credit or debit cards, taking in some $350 million.

A U.S. District Court judge appointed Robb Evans & Associates as receiver to take over all the companies and Johnson’s assets in order to preserve them while awaiting the case’s outcome.

In a recent report to the court, the receiver said that in examining records from 35 financial institutions and 25 other businesses, as well as those of 115 known affiliated companies, investigators uncovered 65 previously unknown entities that were "involved in moving funds and concealing" assets.

"A majority of these entities do not appear to have generated any business income and were used as conduits to reroute funds and to commingle and hide funds," the report said.

Those companies were not in the court order freezing assets and appointing the receiver but are clearly Johnson’s and the receiver should be allowed to go after them, the report claimed.

Johnson, known in Utah for his philanthropic efforts that include flying helicopters to Haiti after the 2010 earthquake, said the monies the receiver was after were not his and he denied making an effort to hide assets. Instead, he said the funds were in merchant accounts at SunFirst Bank that were used to deposit electronic checks processed through Johnson’s company called Elite Debit.

He also denied he had control over entities to which money was transferred.

"No, it’s not true," Johnson said by telephone. "They don’t have a shred of evidence or anything. That’s just their theory."

Johnson, who is representing himself in the lawsuit because he says he has no money for an attorney, said there was a "ton of money in the customer accounts." But the FTC is concocting an "elaborate scheme" claiming the money is really his.

Johnson said he has no interest in the money the receiver is seeking.

The receiver’s report does not mention merchant accounts but refers to the missing monies as earned largely from processing transactions for online poker companies.

Todd Vowell, an accountant, and his brother Jason, were named as being primarily responsible for helping Johnson move assets around. Johnson’s wife and his parents also were named as were three others associated with the Vowells.

Matthew R. Lewis, a Salt Lake City attorney who represents Todd Vowell and some of the companies jointly owned by the brothers, said he could not comment on specifics in the receiver’s report. But he did say "we believe the report is fundamentally flawed because it is premised on the incorrect assumption that all of the $51.4 million referenced in the report belonged to Jeremy Johnson. … Moreover, despite the extraordinary expenditure of time and receivership funds required to prepare the report, our preliminary review has already uncovered a number of significant errors."