|St. George Businessman Jeremy Johnson Seeks to Tell iWorks Story Under Heavy FTC Opposition|
by Morgan Skinner|
KCSG News Exclusive
KCSG Television - St. George, Utah
(St. George, UT) Ė Local business entrepreneur Jeremy Johnson who was the CEO of iWorks company located in St. George and employing over 1000 individuals, hopes his emergency motions will be heard which asked the Court to stay the sale and return the property and assets. Court records show the sale of estate assets (Johnsonís assets) seized by the Court in February grossed $166,250.90 of which Statewide Auction received $24,937.66. The Federal Trade Commission (FTC) filed seven motions in opposition Wednesday in the case presided over by senior Nevada District Judge Roger L. Hunt. The judge did not afford opposing replies to the defendants, Johnson and Fielding in a hearing scheduled for 3:00PM Friday, October 14, 2011 in Las Vegas.
The Plaintiff's Motion in Opposition is adamant the Court Ordered sale shouldnít be stayed nor should the sale be vacated and property returned as requested in the motions filed Pro Se by Johnson and Michael Studebaker. Ogden attorney Michael Studebaker is on behalf of Duane Fielding. The Motions were filed September 23 and September 28, 2011, the day the judge issued a Stay Order pending a hearing.
Wednesday the (FTC) filed seven motions in opposition to the Johnson-Fielding motions asking the Court to stay and vacate the sale and return the property and personal assets to the estate (Johnsonís assets).
The Motions in Opposition claim Johnson was "Noticed" or at least should have known of the sale because his wife knew. The filing doesnít say how the notice can be confirmed although Johnsonís then attorney Travis Marker is supposed to have known because, according to court records; he was serving as Johnsonís attorney in depositions at the same time in St. George. The FTC claims the Court canít unwind the sale and cites legal case support of their contention that itís too late to unwind what is already a final sale in which the property is gone, monies received and distributed.
Collot Guerard, senior trial attorney of the FTC in this case drew the ire of Utah Magistrate Judge David Nuffer at Johnsonís bail hearing September 14, 2011 when he learned that Guerard had forced Johnson to be brought to a telephone where a proposed settle of $289-million dollars with conditions was offered the defendant without his counsel present. (Guerard Cover Letter). Nuffer has asked for an investigation of the incident.
Johnson who is free on a 2.8-million dollar property and surety bond and restricted from travel outside Utah except to Las Vegas for court appearances, continues to fight for the opportunity to tell the iWorks story in an effort to vindicate his name and those of his co-defendants during a federal court hearing before Judge Hunt.
Johnson has been unwilling to talk with the news media since the lawsuit was filed in December 2010 because he said his statements and comments have been taken out of context and twisted into half-truths feeding the media frenzy promoted by FTC news releases filled with unsubstantiated allegations and the federal agencyís unabated legal maneuvers to destroy his company, reputation, seizing all of his company and personal assets including personal bank accounts.
The seizure on February 10, 2011 has left Johnson and his co-defendants without the financial ability to defend themselves in Court and by statute no attorney is appoint by the Court as in criminal cases in which the regulatory powers cannot seize lawyer retainer fees.
The threat by the FTC of seizing a proposed retainer from iWorks for veteran white collar crime Attorney Mark Schamel left the company and defendants to fend for themselves as best they could with lawyers who have little or no experience in Federal Trade Commission regulatory matters.
What has been lost in the news coverage of the alleged Johnson (iWorks) improprieties is the basis on which the allegations are made. For example, Negative Option Marketing and the enormous expense and effort Johnson (iWorks) made to be compliant with state and federal regulatory requirements, has been essentially ignored. For example, iWorks retained Online Legal Consultants to review iWorks websites and monitor customer relations including but not limited to advertising and testimonials.
The concept of negative option marketing is a basic advertising program used by household brand name companiesí everyday in America. In simple terms, negative option marketing turns a sales transaction around. Instead of the merchant having to "sell" you a product or service, it starts with the assumption that you have already bought it. Itís up to the consumer, to contact the merchant and cancel the order if you donít want to complete the transaction. The Columbia Record Club and various "book-of-the-month" clubs were early pioneers of negative option marketing. The enticement was an offer of three or four books or records for free, or at a heavily discounted price. Proactive.com and freeCreditReport.com are among the many products using Negative Option Marketing exactly as iWorks was doing before being shutdown by the FTC.
The irony is that iWorks had spent literally millions of dollars and thousands of man-hours to ensure compliance with FTC regulations. The company had been actively seeking guidance on FTC guidelines. However, the agency has established only vague guidelines leaving iWorks to essentially guess what the regulatory agency deemed compliant. (iWorks Legal Review)
In an effort to stay abreast of FTC regulations, Johnson with his iWorks management team attended an FTC Negative Option Workshop on January 25, 2007 in Washington, DC. Those in attendance were trying to understand the agencyís Negative Option marketing regulations in protecting the consumer. The FTC issued a general statement that disclosures had to be "clear and conspicuous" and "within the vicinity of the order submit button".
Those attending the workshop were left to make their own interpretation of the meaning of "disclosure". The forum was not published until January 2009. Johnson, upon returning from the conference with the concurrence of his management team elected to pull iWorks advertising for a full review and correct any compliance issues.
Suddenly, and without any warning, iWorks found itself the target of an FTC investigation in a 47-page Civil Investigative Demand on February 26, 2011, requiring the company to produce all documents from January 1, 2006 to the present alleging (a) iWorks had been purposely defrauding consumers, (b) the company was not compliant with regulations and (c) products were not what they claimed to be. "None of the allegations are true," said Johnson. "None of the accusations have been proven to be accurate in any Court or in any forum where all of the salient facts are considered."
The record actually shows that iWorks worked continually to insure compliance even to the extent of having a full review by State of Utah, Division of Consumer Affairs investigators in May of 2009 and the Attorney General in which a full disclosure of iWorks operations, products and procedures were evaluated and each visit was met with a good performance review.
Johnson said the FTC goes to companies with a predetermined outcome and ignores evidence that clearly vindicates the company and all defendants from any wrong doing. "My hope is we can have a third-party review," he said, "The FTC has destroyed the company, taken my personal assets including bank accounts and all in the name of righteous indignation on behalf of consumers who were allegedly defrauded. The Fraud is in the manner in which this federal agency is allowed to claim fraud without due process. "Guilty until proven innocent is how I have been treated," Johnson said. "I have been taught all of my life that the American judicial system was about fairness. I hope other small businessmen will be able to learn from my devastating personal experience," he said. "I have been disappointed in the half-truths and lies produced by the federal agency in their abuse of power and with taxpayer resources."
Johnson told KCSG News:
"Sometimes I imagine how wonderful it would be if I was able to sue the government and somehow get the ability to freeze all their assets and make sure they did not have the resources to have attorneys to defend them and then on top of that sell their assets and use their money to generate nasty media stories about them and convince anyone who will listen that they are evil wrongdoers not worthy of the use of their own money to assist them in their defense (sometimes I dream of having them all in jail while this is happening too). Of course in the real world that would never happen yet somehow that is the very situation I find myself in only itís the government that gets to use my own money against me and generate thousands of news stories about what an evil criminal I am. Sometimes I hardly feel I am in America."
KCSG News will begin a series on the each FTC allegation against iWorks, Jeremy Johnson and the co-defendants and let you make the decision "Truth vs Fiction; The iWorks Story". FTC Complaint
Originally published October 13, 2011
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