Jeremy Johnson back in custody
Samantha Clemens / The Spectrum
Jeremy Johnson

ST. GEORGE - A St. George businessman accused of scamming thousands of people selling products online will remain in jail while prosecutors develop their cases against him, a grand jury ruled Wednesday.

U.S. Internal Revenue Service agents arrested Jeremy Johnson, 35, over the weekend for a mail fraud charge related to the online businesses he allegedly used to dupe customers out of $289 million.

Federal prosecutors filed an indictment against Johnson on Wednesday in Phoenix, where he was arrested, and Johnson will be transported back to Salt Lake City.

Once Johnson is back in Utah, prosecutors will schedule his next court appearance, said Melodie Rydalch, public information officer for the U.S. Attorney's Office in Utah.

Calls to Johnson's St. George attorney were not returned before deadline on Wednesday.

The new charges accuse Johnson of sending "hundreds of thousands of consumers" computer software through the mail that made false claims about helping them obtain government grants to pay for personal expenses. He faces a maximum penalty of 20 years in federal prison and a $250,000 fine.

Johnson already faced a lawsuit from the Federal Trade Commission, which contends that Johnson and other defendants profited through St. George-based iWorks and other Internet companies "by luring customers into trial memberships for bogus government-grant and money-making schemes, and then repeatedly charging them monthly fees for these and other memberships that they never signed up for."

The FTC froze Johnson's assets in January, and courts have rejected subsequent efforts by the defendant to free up some of the funds. He recently filed an emergency motion to release funds so he could pay personal bills that include a $16,600 monthly payment for his St. George home.

Johnson was arrested while preparing to board a plane to Costa Rica, where he has a home and where his wife and two children moved earlier this year.

In the complaint document, the U.S. Attorney's Office states that Johnson has been traveling internationally, and has access to extensive resources in other countries, including helicopters and other vehicles. He also has property in Belize and the Philippines, according to the complaint.

Johnson is well known in Southern Utah for assisting in local search and rescue operations and for using his helicopter and money to lead an aid mission in earthquake-ravaged Haiti last year.

The FTC case has revealed other details about Johnson's life, and court documents describe him as a chronic gambler who has lost millions in Las Vegas casinos, and a big spender who used the nearly $50 million he took home personally from iWorks to fund a lavish lifestyle.
Originally published June 16, 2011