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SALT LAKE CITY -- Federal authorities intend to freeze the assets of a wealthy St. George businessman who they say masterminded an Internet-based scam that took consumers for more than $275 million since 2006.
In documents filed in U.S. District Court in Nevada, the Federal Trade Commission revealed plans to also seek a preliminary injunction against Jeremy Johnson, nine others and 61 companies pending the outcome of complaint filed against what it calls the "iWorks Enterprise."
The FTC last month filed a 10-count complaint against Johnson and his associates alleging iWorks "tricked" consumers into providing credit or debit card information for various moneymaking plans and access to government grants and then repeatedly billing them for membership in websites they never agreed to join.
The scheme, according to court documents, caused hundreds of thousands of people to seek reversals of charges to their bank accounts. The high number of chargebacks landed the companies in VISA and MasterCard monitoring programs.
Court documents say the defendants incorporated "shell" companies using mail-drop addresses and "straw figures" as owners because it was unlikely they could obtain additional merchant accounts due to the negative chargeback history.
Johnson made headlines last year for his humanitarian efforts in earthquake-ravaged Haiti where he used his helicopter to rescue injured victims and drop food to homeless people. He has also flown in search-and rescue-operations, manhunts and natural disasters in southern Utah.
Johnson, who has denied any wrongdoing, said last month he had been working with the FTC for a year to resolve the agency's complaints. During that time, Johnson provided the commission with volumes of documents marked confidential.
The FTC blacked out much of that information in its initial complaint, but says in its latest court filing little, if any, of it warrants confidential treatment because it has been publicly disseminated or is contained in other litigation involving Johnson and iWorks. The FTC asked to court to allow it to file an unredacted complaint.
Federal court records show Johnson has been sued three times in the past decade.
In 2001, the Securities and Exchange Commission filed a fraud complaint against him in Salt Lake City involving an Internet company he owned called RumorSearch, which offered subscribers purportedly hot stock tips. The case was settled with Johnson paying more than $425,000 in penalties without admitting wrongdoing.
EBay sued Johnson in 2003 for using its name without authorization in marketing iWorks products and services such as eBay Exposed and eBay Solutions. The suit was settled out of court with Johnson agreeing to discontinue using the eBay name and paying the company $10,000.
A 2009 suit involving the purchase of a helicopter remains unresolved.
E-mail: romboy@desnews.com.
