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Prosecution ends its case by dropping 3 charges against John Swallow

Laura Seitz, Deseret News

Prosecution ends its case by dropping 3 charges against John Swallow

By Dennis Romboy | Posted - Feb. 23, 2017 at 6:06 p.m.


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SALT LAKE CITY — State prosecutors ended their case against former Utah Attorney General John Swallow on Thursday with more of a whimper than a bang.

The Salt Lake County District Attorney's Office dismissed three criminal charges against Swallow as it turned the case over to the defense.

Third District Judge Elizabeth Hruby-Mills agreed to drop the following charges: receiving or soliciting a bribe, a second degree felony; money laundering, a second-degree felony; and tampering with evidence, a third-degree felony.

Swallow still faces nine other felony charges and one misdemeanor.

The dismissed charges were related to payments Swallow received from the late Richard M. Rawle through an entity called P Solutions.

Jurors heard extensive and detailed testimony about those allegations, including an elaborate FBI forensic accounts chart showing how the money flowed from Rawle to Swallow.

But they did not hear from imprisoned businessman Jeremy Johnson, who claimed that Swallow was part of plan to bribe then-U.S. Senate Majority Leader Harry Reid, D-Nev., in an attempt to end a Federal Trade Commission investigation into Johnson’s online marketing company, iWorks.

Johnson invoked his Fifth Amendment right and has refused to testify. His lawyers say he fears the federal government would use his words against him in other possible cases.

Prosecutors, however, did not drop the gift charge connected to Swallow's alleged use of Johnson's million-dollar Lake Powell houseboat.

"Every trial is fluid, and sometimes as the evidence or situation changes, so does what we can prosecute, and it's our obligation to do the right thing and make that correction to reflect the evidence," Salt Lake County District Attorney Sim Gill said.

Scott Williams, Swallow's attorney,said the dismissals did not surprise him, adding he thought state would drop more of the charges.

The counts were tied to the "wild allegations" that there was some sort of attempt to bribe Reid, he said.

"Having no evidence of that been presented at trial, apparently the state has acknowledged it and is not pursuing it," Williams said. "Certainly, (Johnson) not testifying hurt their ability to put on evidence."

Williams asked Hruby-Mills for a "directed verdict," basically a request for the judge to consider throwing out some or all of the charges. Lawyers for both sides made their cases for and against each of the remaining charges outside the presence of the jury.

Hruby-Mills took the arguments under advisement and said she might issue a ruling Friday.

Motions for directed verdicts are typical in criminal trials but judges don't often grant them, even though the reasonable doubt standard that juries must apply is lower.

Rawle set up a company called RMR Consulting after Swallow introduced him to Johnson as someone who could help lobby the FTC on Johnson's behalf in 2010. Rawle, the founder of the payday lending chain Check City, had a connection to Reid. Swallow worked as a lawyer and lobbyist for Check City.

Johnson claims Swallow helped arrange a deal to pay off Reid. Johnson paid Rawle $50,000 and a Johnson associate paid him $200,000.

Prosecutors alleged Rawle paid $23,500 to a Swallow entity called P Solutions out of that money. Swallow later returned the payments and asked Rawle to pay him out of a different account.

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In a statement Rawle signed on his deathbed in December 2012, Rawle said he paid lobbyists, including a law firm with close ties to Reid, with a portion of the $250,000 from Johnson and his associate and took $50,000 for his fee. He said the money he paid Swallow was not a fee for the Johnson deal, but rather for consulting work on a Nevada cement plant project.

Swallow still faces 10 other charges: pattern of unlawful activity, accepting a gift, two counts of receiving or soliciting a bribe, and making false statements, all second-degree felonies with potential penalties of one to 15 years in prison. He also is charged with two counts of evidence tampering, misuse of public money and obstruction of justice, all third-degree felonies with potential penalties of zero to five years in prison. Swallow is also charged with falsifying a government record, a class B misdemeanor.

Defense attorneys told the judge they intend to wrap their case next Tuesday, so closing arguments could be Wednesday. The judge plans to give the jurors Friday off so lawyers can argue over jury instructions.

Also Thursday, the lead investigator in the Swallow case admitted that he violated a court order when he testified about a federal agency declining to prosecute the former Utah attorney general and his predecessor Mark Shurtleff.

FBI special agent Jon Isakson also acknowledged that he spoke outside the scope of his authority when he talked about the Department of Justice Public Integrity Section's decision to not file federal criminal charges against Swallow and Shurtleff.

The justice department issued a letter in September 2013 saying charges against the two men were not warranted.

The seven-man, five-woman jury wouldn’t have heard that information had Isakson not brought it up in response to a prosecutor’s question Wednesday.

Before the trial started, Hruby-Mills barred attorneys from talking about the letter at prosecutors' request. The state argued the information would prejudice the jury.

Williams pounced on the opportunity Thursday after Isakson opened the door the day before. He got the letter admitted as evidence, read it to the jury and asked Isakson questions about it.

Isakson testified Wednesday that he and other agents asked the Department of Justice to back off because they wanted to work with state prosecutors. He said agents believed some of the alleged crimes were better suited to state court.

Williams complained that he can’t corroborate Isakson’s testimony because the justice department bars the agents from testifying without special permission.

FBI lawyer Doug Davis acknowledged to the judge before the jury came in that Isakson said things he wasn’t supposed to, but the Department of Justice wasn’t willing to grant a waiver for him or other agents to testify about the declination letter.

After Isakson finished testifying, Hruby-Mills informed jurors that the agent had violated a court order and that they should give no weight to his testimony about why the department declined to prosecute Shurtleff and Swallow.

Isakson also mentioned Wednesday that Shurtleff had been arrested and charged along with Swallow in July 2014.

Williams argued that the jury would assume that Shurtleff was guilty. He wanted the judge to allow him to tell jurors that the former attorney general was not convicted of any crimes. Hruby-Mills earlier banned testimony about the Shurtleff case.

Deputy Salt Lake County district attorney Fred Burmester countered that an arrest is different than a conviction, and said his team did not delve into the Shurtleff case.

Hruby-Mills agreed the testimony did violate her pretrial order but that she didn't want any more discussion about the Shurtleff case.

Shurtleff and Swallow were initially charged as co-defendants but their criminal cases were later separated. Davis County Attorney Troy Rawlings took the Shurtleff case but dropped the charges against him last summer.

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Dennis Romboy

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