Jeremy Johnson's headline should have read "local man makes it big." Instead, it's "local man charged with a $275 million fraud."
Unlike other Utah-based entrepreneurs who have landed in the crosshairs of federal regulators, Jeremy Johnson is unique because of his humble beginnings. In the mid-2000s, Johnson launched his Internet-marketing business, I Works, in St. George, what was then a relatively small city in Utah. And as his company took off, Johnson, ever loyal to his roots, gave generously to numerous local causes and made himself a hometown hero.
Johnson ingratiated himself to many politicians, and, in particular, to local law enforcement in Washington County. It's a relationship that lately has felt a little awkward for individuals like Washington County Sheriff Cory Pulsipher.
That's because in 2010, Johnson was hit with a civil lawsuit from the Federal Trade Commission, and in 2011, he was criminally indicted by the Department of Justice. The FTC would allege I Works sold a service to customers looking for government grants to start businesses or buy cell phones, and would then use numerous shell companies to tack hidden charges onto consumers' credit cards.
Johnson then made headlines in 2013 when he told The Salt Lake Tribune that he'd enlisted John Swallow, who was then chief deputy at the Utah Attorney General's Office, in a scheme to bribe Sen. Harry Reid, D-Nev., hoping to call off the Federal Trade Commission investigation of his company. Johnson's alleged scheme didn't achieve the desired results. Swallow, who would go on to be elected Utah Attorney General and then resign a year later, now faces numerous felony corruption charges. He has long maintained that he had only offered to help Johnson lobby Reid, not bribe him.
Sheriff Pulsipher recalls Johnson as a friend, though not a close one. He says he hasn't socialized with Johnson since Johnson was sued civilly by the FTC in December 2010. Since Pulsipher took office in 2011 and even before, the sheriff recalls Johnson's generosity to the department. Johnson loaned his plane and helicopter to aid in search & rescue operations, for example. Pulsipher recalls before he was elected sheriff and was only a deputy, Johnson for a few years paid for special Christmas dinners to be served to county jail inmates and bought them telephone calling cards. And, for a number of years—before Johnson's charges came down—he recalls that Johnson paid for a corporate pass to Brian Head ski resort in nearby Beaver. The pass was left in the sheriff's office, and deputies were welcome to take turns using it to go skiing and boarding in their off time.
In February and March 2010, Johnson donated $60,000 toward the construction of an equipment barn to be used by the Washington County Sheriff's Office and to help fund a trades program for county inmates to receive vocational credit in return for helping build the facility.
"He was just all over the place, helping out wherever he could and with whatever he could," Pulsipher says.
Johnson was also on good terms with Kirk Smith, the former Washington County sheriff. In late 2006, the two even swapped some real estate. Smith paid Johnson some cash and traded him an undeveloped lot in Santa Clara in exchange for Johnson's resort cabin in what Smith describes as a beautiful location surrounded by Zion National Park.
Smith says it was a win-win deal since it saved him the "hassle" of having to build a home on the lot he owned in Santa Clara and that Johnson had been trying to sell the cabin for some time. "He didn't give me more for that property than the lot was selling for, so there was no conflict of interest," Smith says.
In a February 2015 interview with City Weekly, Johnson's recollection was unclear about whether he was trying to sell the cabin at the time, but he remembers it as an ordinary transaction, started by Smith commenting to him about cabins in the area. "He wanted a cabin, so I said, 'Hey, buy mine. I don't even use it that much,'" Johnson says.
Smith retired in 2010 and has had little contact with Johnson since then. Still, he is withholding judgment until Johnson gets his day in court—his trial is now scheduled for September 2015. "Just remember, in America, we're innocent until proven guilty, and Jeremy is entitled to all of those same privileges that you and I are entitled to," Smith says.
Pulsipher won Smith's seat in 2010, and he noted that, while Johnson did not donate cash to his campaign, Johnson paid for at least 300 trifold brochures for his election. Pulsipher recalls that Johnson never told him how much the brochures cost, despite Pulsipher asking Johnson repeatedly for a figure so he could file his campaign reports. Unable to get an estimate from Johnson, Pulsipher simply told a county clerk how many brochures there were. A City Weekly reporter pointed out to Pulsipher that this printing donation was never disclosed on his report. Pulsipher told City Weekly in February that, after consultation with county clerks and others, he intended to amend his 2010 report to show an estimated $300 donation from Johnson for the brochure expenses—but, as of press time, Pulsipher had not corrected his campaign record.
Pulsipher says he got a lot of flak during that election because of his past friendship with Johnson. "People said he bought the election for me," Pulsipher says. "Really? He just bought my trifolds."
Johnson drew a blank when asked about the brochure donation. "I have no idea," Johnson says.