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Home / Articles / News / News Articles /  News | The $50,000 Question: Utah's Attorney General explains campaign donations received from company his office brought fraud charges against
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News | The $50,000 Question: Utah's Attorney General explains campaign donations received from company his office brought fraud charges against

By Eric S. Peterson
Posted // June 18,2008 - Jean Welch Hill, Democratic challenger to Republican heavyweight Mark Shurtleff, believes it’s time she took over as the state’s attorney general. Hill counts many reasons why she should get the seat, including Shurtleff’s courtship of the payday-loan industry and his conflict of interest in investigating the alleged bribery charges of political ally Mark Walker in the treasurer’s race—and now she can count at least 50,000 more reasons.

That’s one for each dollar Shurtleff accepted in campaign donations from Jeremy Johnson, president of the St. George company IWorks. While Shurtleff maintains that he only knew Johnson from meeting him once at a fund-raiser last March, several attorneys at the attorney general’s office have known of Johnson for much longer. That's because they'd been involved in taking legal actions against his company for more than a year for allegations of fraud.

“If you’ve been involved in litigation with some company,” says Hill. “Then you ought to have the discipline to say this isn’t the best donation for me to accept.”

Shurtleff maintains he had no knowledge that Johnson was under investigation by the Department of Commerce and had faced charges filed by assistant attorneys general (ed. note: this sentence has been corrected to indicate the roles the agencies played in the enforcement action). He says the only connection he shares with Johnson was support for the Utah “lost boys” group, a charity that helps displaced former members of polygamist communities. Shurtleff was impressed that Johnson had donated a home to the cause, known as the “house off of Bluff” in St. George.

“We just talked about the lost boys, really,” Shurtleff says. “Clearly, there was no conflict.” A few days after this casual meeting at a John McCain fund-raiser—on March 21 and 27, 2008—Shurtleff received two $25,000 donations from Johnson making up nearly a third of Shurtleff’s $161,625 campaign war chest.

Johnson failed to mention that last July—about the same time he generously financed the building of the “house off of Bluff”—he had also been served with citations from the Utah Division of Consumer Protection for 49 counts of charging a consumer for non-consensual transactions and for six counts in violation of the Telephone Fraud Prevention act. These charges were brought on behalf of the state by Jeffrey Buckner of the Utah Attorney General’s Commercial Enforcement Division.

All charges revolved around Johnson’s company IWorks which court documents alleged offered a service selling a kind of “how-to” program for people seeking government grants. Individuals signed up for free information only to find that they were being charged for what they considered to be hidden monthly fees.

The fraud counts alleged IWorks telemarketers promised approval for sizeable Small Business Administration (SBA) loans to customers from across the nation. The complaint filed by the attorney general's office alleges that salesmen misrepresented the facts and made false guarantees to customers bout their eligibility for government grants.One woman from Alabama was told that because she was black, she would receive $200,000 out of which she could pay off the $10,000 IWorks program fee. Later, she could get it taken off her taxes. The charges allege that the woman felt she was dealing with someone associated with the government program because the person described himself or herself as “SBA Express Funding.”

Complaints alleged a frustrating runaround as different grant “coaches” would redirect customers’ questions and promise to compose business plans for them. Many individuals’ phone calls weren’t returned and several were denied refunds, according to documents.

The case saw motions flying back and forth between IWorks’ attorneys and the attorney general’s office throughout the summer and up till December of 2007.

The case was dismissed after IWorks argued that some sales tactics were perhaps aggressive but not criminal and that the transaction charges were not deceptive but rather cases of some customers failing to read the fine print.

Shurtleff was unaware of any of this when he met IWorks owner Jeremy Johnson three months later and received $50,000 in campaign donations. “There was never anything nefarious going on—I never knew he was under investigation until now,” Shurtleff says.

Jeremy Johnson did not respond to numerous phone calls made by City Weekly seeking his comments.

Shurtleff pointed out that with hundreds of cases being worked on by his staff, not every investigation comes to his attention. “I have 200 attorneys,” Shurtleff says. “Not every single investigation percolates up to my attention. This one didn’t come to my attention, and I didn’t call to see if they were under investigation.”

Shurtleff says with contributions from unfamiliar sources, he usually does an Internet search and maybe checks with his office but says nothing came up on his radar with IWorks.

But that’s not to say Johnson has always been off the radar. In 2001, he was busted by the Securities and Exchange Commission for allegedly running a Website called RumourSearch.com that gave subscribers tips on stock trading. According to SEC allegations, Johnson had received 95,000 shares from a company that he touted as a hot tip on his Website, and then sold his stock for a $315,848 profit. In a settlement, Johnson returned profits and paid a fine without admitting to or denying the allegations.

Shurtleff denies any wrongdoing and disagrees that this incident or others lobbed at him by challenger Hill constitute a conflict of interest. “If there is an actual case where somebody gave me money and I did something favorable for them, that would be a conflict,” Shurtleff says. “On several occasions, I’ve received donations from somebody, and then sued them afterwards.”

For Hill, the issue is about running the attorney general’s office by an ethical standard. “The key is that, if you are getting a large contribution from somebody, you should know who they are,” Hill says.

Hill says that since the attorney general’s office is essentially a law firm, it ought to use the common legal practice of circulating conflict-of-interest forms to avoid situations like this. “It’s not like reinventing the wheel here,” Hill says. “They just need to run the office like a law firm.”

 
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REPLY TO THIS COMMENT
Posted // May 30,2012 at 17:16

Remember the denials uttered and seek the details under. 

 

REPLY TO THIS COMMENT
Posted // June 23,2008 at 11:09 So we are doing a story about contributions to the AG.nAlas, we don’t manage to get in touch with the contributer.nnNot to worry,nwe have a couple of juicy paragraphsnof outrage, advice and commentarynat the beginningnand a couple more juicy paragraphsnof outrage, advice and commentarynat the end of the story;nfrom the AG’s upcoming opponent!nnDarn! That is good and complete journalism!nn(We can enter this one in the competitionnfor newswriting and editorial writing.nA two-fer!)

 

REPLY TO THIS COMMENT
Posted // June 23,2008 at 10:58 After all: nyou can’t always wait around for every dirtbag to call back before you run a story, especially when you are competing with daily papersnnn“Ma’am, this hash seems a little undercooked”, I ventured, eyeing the rancid pile of crap laced with congealed fat she had just plopped on my plate.nn“You want it fast or you want it good?!” she barked.nn“Besides-” she smacked over her gum- “you get what you pay for”.nn“What is this, anyway?” I wondered out loud to no one in particular.nn“Something we dug up when we ran the traps” came the reply.n“It may go down easier if you chase it with some Hillberry pie- it’ a house speciality!”

 

REPLY TO THIS COMMENT
Posted // June 23,2008 at 10:30 So what did he get for his $50K?nThere is no smoke and no fire here;njust a half researched non-storynsome folks want to try to make out to beninvestigative journalism.nInnuendo is a poor substitute for journalism.nYou give yourselves away fawning all over Hill.nA strait piece of journalism would have no reason tonand would never have mentioned her.nnThe first poster may not have intended itnbut he nailed it dead.nnDon’t forget to file your paperwork with thenUtah Election Commission.

 

REPLY TO THIS COMMENT
Posted // June 23,2008 at 03:26 Shoe Drop, CheckmutnnAssuming you two aren’t the same person, I think you both need a reality check. Are either of you journalists? How many articles do you read in the Desnews or SLTrib that contain the line _____ did not return calls before our print deadline? You can’t always wait around for every dirtbag to call back before you run a story, especially when you are competing with daily papers who use their print deadlines as an excuse for hyper-crappy journalism. So Johnson, or Johnsons employees, or cronies, whoever you people are, get back to work scamming people - something you actually know something about.

 

 
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