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(Tribune file photo) The FTC has asked a judge presiding over its lawsuit against Jeremy Johnson to amend it to include among others Johnson’s wife, Sharla, seen with him after a court hearing last fall.
FTC ramps up pressure against St. George businessman Jeremy Johnson
Courts » He says agency’s effort to add family members to fraud lawsuit is purely punitive.
First Published Jan 23 2013 12:05 pm • Last Updated May 20 2013 10:23 pm

After a round of failed settlement negotiations, the Federal Trade Commission is trying to ratchet up the pressure on St. George businessman Jeremy Johnson by seeking to add his wife and parents to a lawsuit claiming Johnson’s Internet sales companies defrauded consumers out of millions of dollars.

But Johnson fired back on Wednesday, contending that because the agency already had seized and sold most of his assets and those of the companies, the new effort was aimed at ensuring he doesn’t have money to hire an attorney to pursue his defense.

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"The government’s strategy is to make sure I don’t get access to any money so I can’t hire an attorney and, therefore, none of the facts in our case will ever be presented to a jury," Johnson said in a statement. "This is the strategy the government must use in this case, as they know very well the evidence does not support their claims."

The FTC has asked the Nevada federal judge presiding over its lawsuit against Johnson, I Works and related companies and other employees to amend it to include Johnson’s wife, Sharla, and parents, Barbara and Kerry Johnson, and five family-related companies.

The proposed new complaint says those named received $22 million, including $1 million worth of silver coins or bars that went to Kerry Johnson. The FTC contends those transfers, from the $275 million taken in by I Works, were improper because the company engaged in illegal marketing practices.

FTC spokesman Frank Dorman said in an email that the new complaint is aimed at recovering monies that went to Johnson’s wife and parents "to which the relief defendants have no rightful claim. The FTC seeks to disgorge these funds from them in order to increase the amount available for consumer refunds, should the FTC win its case."

Johnson also is facing a criminal charge in federal court in Salt Lake City over operation of I Works and is embroiled in a dispute over allegations involving an alleged scheme in which Johnson says Utah Attorney General John Swallow helped to put together a deal to pay Senate Majority Leader Harry Reid to scuttle the FTC investigation.

Swallow, Reid and others have denied knowing about or engaging in any alleged bribe. Swallow has said the plan was aimed at hiring lobbyists to help Johnson deal with the agency.

The allegations of the transfer of funds in the FTC case already are contained in numerous court documents, but if the agency receives approval to file the new complaint, it will have ramped up the stakes in the battle with Johnson by adding his wife and parents to the suit that originally was filed in Las Vegas in December 2010.

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