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The Journal Gazette

  • FILE -This undated file photo provided by the Davis County Jail, shows Jeremy Johnson, a Utah businessman accused of running a $350 million fraud scheme through his company is planning changing his plea Friday Jan. 11, 2013. Federal prosecutors have charged Johnson with one count of mail fraud in U.S. District Court in Salt Lake City, and if convicted he faces up to 20 years in prison. (AP Photo/ Davis County Jail, File)

Friday, January 11, 2013 6:34 pm

Utah businessman's mail fraud case going to trial

By MICHELLE L. PRICEAssociated Press

A federal plea agreement fell apart Friday for a well-known Utah philanthropist accused of running a $350 million scheme that billed hundreds of thousands of consumers for products they never ordered.

Prosecutors allege that Jeremy Johnson's company, iWorks, sent software to consumers for a supposedly risk-free trial but billed them anyway. The company mailed consumers CDs that contained information about government grants for personal, business and education expenses, prosecutors have said.

Johnson, 37, was arrested at a Phoenix airport in 2011, carrying more than $26,000 in cash and a one-way plane ticket to Costa Rica.

Federal prosecutors initially charged him with one count of mail fraud related to his Internet-based business operations. 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 Johnson and prosecutors disagreed over the terms and a list of people that Johnson wanted to ensure would not be prosecuted. Johnson instead decided to maintain his not guilty plea and the case is set to go to trial.

After a court hearing in U.S. District Court Friday, Johnson said he wanted a chance to prove his innocence.

Before his arrest, Johnson donated generously to charities and to the political campaigns of former Utah Attorney General Mark Shurtleff. He 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.

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.

If convicted, Johnson could face decades in prison. He is currently free on a $2.8 million bond.

The Federal Trade Commission has also filed a civil suit against Johnson and nine business associates in Las Vegas.