SALT LAKE CITY — The Federal Trade Commission is asking a federal judge in Nevada to rule against Utah businessman Jeremy Johnson in a 3-year-old fraud case.
The FTC, in a motion filed Wednesday in U.S. District Court in Las Vegas, seeks summary judgment and a final order against Johnson and his iWorks enterprise, the Deseret News reported (http://bit.ly/189V0e9 ).
Johnson is accused of tricking online customers into spending $281 million on bogus Internet services.
The FTC claims iWorks lured customers into "trial" memberships for bogus moneymaking opportunities and government grants for personal expenses. Those who signed up for the "risk-free" offers were repeatedly charged monthly fees and enrolled in other programs without their knowledge.
"At the height of the iWorks scam, defendants were making 150,000 sales per week. Defendant Jeremy Johnson received no less than $52 million from this well-oiled fraud machine," the FTC complaint adds.
Johnson, who has maintained his innocence and refused to settle with the FTC, said in an email that he is not allowed to comment. A lawyer for iWorks did not return a phone call for comment.
Johnson and iWorks have 21 days to reply to the FTC motion.
The FTC asks U.S. District Judge Miranda Du to permanently bar the St. George businessman from running or helping any business involved in negative option marketing, selling information related to government grants or investments, or serving as the ceremonial head of a corporation.
The motion also seeks millions of dollars that went from iWorks to Johnson's wife and parents.
Two Johnson associates named in the complaint, Bryce Payne and Kevin Pilon, settled with the FTC on Tuesday, the Deseret News reported.
The government froze Johnson's assets in 2011, and a court-appointed receiver began selling them to return money to customers.
In addition to the FTC's civil complaint, federal prosecutors in Salt Lake City filed an 86-count criminal fraud indictment against Johnson and four former iWorks executives in March.
In January, Johnson claimed Utah Attorney General John Swallow was part of an effort to bribe Senate Majority Leader Harry Reid, D-Nev., in hopes of ending the FTC investigation into iWorks in 2010. Swallow and Reid have denied the allegation.
The claim helped spur investigations of Swallow on multiple fronts, including by the U.S. Department of Justice and a Utah House special committee.
Swallow, a first-term Republican, announced his resignation last week, saying he could not compete financially with the House panel's $3 million budget for its investigation.
Information from: Deseret News, http://www.deseretnews.com