Reid denies part in Utah scheme
January 15, 2013
SALT LAKE CITY – Senate Majority Leader Harry Reid’s office said Monday he was never involved in a deal to have a Utah businessman pay the senator to make a federal investigation disappear.
St. George businessman Jeremy Johnson, who’s accused of running a $350 million software scheme, said a top official in the Utah attorney general’s office orchestrated an agreement in 2010 to pay $600,000 to someone connected to Reid.
Johnson told The Salt Lake Tribune over the weekend that he believed Reid would intervene in the Federal Trade Commission’s investigation into his business.
A spokeswoman for Reid’s office, Kristen Orthman, said Monday that the Nevada Democrat “had no knowledge or involvement” in Johnson’s case and said the allegations “are nothing more than innuendo and simply not true.”
Federal prosecutors allege that Johnson’s company sent software to consumers for a supposedly risk-free trial but billed them anyway.
Johnson was arrested at a Phoenix airport in 2011, carrying more than $26,000 in cash and a one-way plane ticket to Costa Rica.
Prosecutors initially charged him with one count of mail fraud. He was set to enter a guilty plea Friday to two additional charges of bank fraud and money laundering as part of an agreement with the government.
But that deal fell apart after Johnson and prosecutors disagreed over the terms. Johnson instead decided to maintain his not guilty plea and the case is set to go to trial.
On Saturday, the Tribune reported that Johnson provided the newspaper with emails, financial statements, photos and a transcript of a recorded meeting with John Swallow, then the state’s chief deputy attorney general.
Only one email from Johnson was available on the newspaper’s website.
Swallow was elected as Utah Attorney General in November and was sworn into office last week. He has strongly denied the allegations and maintains he only offered to connect Johnson with a lobbying firm.
After the FTC filed a lawsuit against Johnson and nine business associates in December 2010, Johnson said he asked Swallow to return part of the $250,000 he had paid. Johnson said he doesn’t know if anyone connected to Reid received it.
Swallow, a Republican, said he told Johnson he would not interfere with the FTC investigation or advocate for Johnson to the U.S. attorney.
“Any suggestion by Mr. Johnson that I have been involved in illegal or inappropriate activity regarding his FTC case or any other matter is false and defamatory,” he said.
Swallow said he connected Johnson to someone who could hire lobbyists but did not participate in any agreement or receive any payment. He said Johnson is trying to divert attention from his own problems.
Utah Democrats have called for an independent investigation to look into the allegations against Swallow.
Swallow’s office declined to answer questions Monday and said they would be issuing a statement. Messages left with Reid’s office for further comment on Monday weren’t immediately returned.
Late Monday afternoon, Swallow’s office released a letter asking the U.S. Attorney’s Office in Salt Lake City to investigate Johnson’s claims.
Swallow said he’s confident an investigation will clear his name.
“These lies he’s told have been fabricated for some end I cannot imagine. That’s what I hope this investigation will show. I’m looking forward to clear my name and show people that this didn’t happen,” Swallow told The Associated Press Monday evening.
The U.S. Attorney’s Office in Salt Lake City has declined comment on whether there is an investigation into the alleged deal.
Before his arrest, Johnson donated generously to charities and to the political campaigns of former Utah Attorney General Mark Shurtleff. He gave $2,400 to Reid’s re-election campaign in July 2010, according to Federal Election Commission records.
Johnson also used his personal helicopters to aid search and rescue efforts in southern Utah and made international headlines in January 2010 when he purchased a plane to fly doctors and other critical supplies to Haiti following a devastating earthquake.
Johnson, 37, could face decades in prison if he’s convicted. He is currently free on a $2.8 million bond.
Prosecutors on Friday said they plan to file a new indictment in the case within a month, but wouldn’t comment on whether other people besides Johnson would be charged.
A spokeswoman for Johnson’s attorneys released a statement Monday afternoon saying Swallow’s claims that he was uninvolved and had no knowledge of the agreement are false.
“Johnson stands by his comments, as told to the Salt Lake Tribune, and continues to believe that his understanding of the agreement to be accurate,” the statement said.