Jeremy Johnson, Black Friday Defendant, Faces Up To 30 Years In Jail5 years ago
In a day which must have felt bittersweet, Jeremy Johnson one of the characters involved in the 2011 Black Friday scandal, faced judgement on a huge count of 86 fraud charges brought against him by the US justice system.
78 of the charges saw a not guilty verdict, with the remaining eight judged guilty as charged, including making a false statement to a bank.
In what must have been one of the biggest ever trials of its kind, Johnson found himself accused of crimes such as money laundering, wire fraud, bank fraud, and conspiracy.
While he is inextricably linked to what happened on Black Friday, he was not actually named in those indictments at the time, possibly because he was already under investigation by the US Federal Trade Commission for fraudulent business practices.
So Who Is Jeremy Johnson
Jeremy Johnson was the owner of the iWorks telemarketing empire, and co-owner of an online payment processing company called Elite Debt which was used by Pokerstars and Full Tilt Poker prior to April 2011. Key to both the fraud case and Black Friday was that he also had a stake in a Utah bank, SunFirst. This struggling bank was reliant on the funds from Johnson's widespread business activities to stay afloat.
Before the government investigators even discovered his link to online poker, iWorks was under the spotlight following complaints about extra charges onto customer's credit cards. When the accounts had all been examined it was shown that $275million had been taken without permission.
Last month during the trial, we heard how Johnson had set up a network of shell companies to gain approval for credit card charging accounts set up with Wells Fargo Bank by the Californian company CardFlex inc. In effect, falsifying the creditworthiness of iWorks.
CardFlex operations director Will Swaim, when being cross examined by Johnson who had fired his lawyer and was now defending himself, launched a tirade across the courtroom. He explained how he felt “stupid” because he had been “conned.” Things became heated until the Assistant US Attorney objected, and the judge told Johnson to end the line of questioning to avoid the jury being prejudiced.
It was an incredibly complicated case which overlapped with the Black Friday indictments. An unnamed source said the US Department of Justice and the Federal Trade Commission clashed when it was clear that Johnson was supposed to be the twelfth man indicted on Black Friday. The problem was that many of the iWorks bank accounts under investigation by the FTC were the same as those being used by Elite Debt. In the end the DoJ decided to let the FTC have their man.
Elite Debt co-founder Chad Elie was indicted however, and was sentenced to five months of jail time. Elie was reported to have been forced to give up in excess of $25million from the online payment accounts.
Elie and Johnson first met up in 2009 and put together a deal to run credit card payments via the SunFirst bank who were, on the face of it, happy to do Johnson's bidding while he was keeping them in business. Elite Debt was soon up and running.
Into the Murky World of Politics
Johnson's reach extended further than the business world. Last year, former Attorneys General Mark Shurtlef and John Swallow were arrested on corruption charges. Jeremy Johnson found his name on the charge documents an incredible eighty times.
The pair of officials had been accused of taking advantage of luxuries such as private planes and houseboats belonging to Johnson in return for help furthering his business interests, and helping him with his ambition to legalise online poker in the state. There was also mention of bribes paid through the twenty one counts of corruption, with details revealing that the two were actively trying to hamper the FDC investigation into iWorks.
Johnson also claimed that had paid a million dollar bribe on behalf of Full Tilt Poker to the standing US Senate Majority Leader Harry Reid in return for his backing on what was called the Reid-Kyle bill, an attempt to make online poker legal in the USA.
Jeremy Johnson is certainly a colorful character. Researching what is known about him publicly, I have read stories about him burying chests of gold coins around the hills of Utah like some seventeenth century pirate hiding his loot.
He is also seen as a bit of a hero in Utah by many, somebody to look up to. It's not clear if things have changed much following his legal troubles.
With a split decision on the verdicts, Johnson has declared himself pleased with the outcome, but on June 20th he will still face a possible 30 year jail senence. Mainstream media has reported that this is unlikely to happen, but a massive financial penalty with at least some time behind bars is almost certain.
We will report back to you as soon as the sentencing hearing is completed.
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