Utah man in mail fraud case to be released on bond

JENNIFER DOBNER - Associated Press
September 15, 2011
FILE -This undated file photo provided by the Davis County Jail, shows Jeremy Johnson, who has pleaded not guilty to a federal mail fraud. Attorneys for Johnson on Wednesday Sept. 14,2011 are expected to propose a release agreement to a federal magistrate at a hearing in Salt Lake City's U.S. District Court. If convicted, Johnson faces 20 years in prison. (AP Photo/ Davis County Jail, File)

SALT LAKE CITY (AP) — A southern Utah businessman accused of defrauding online consumers will be released from jail after friends and family put up $2.8 million in assets to ensure he'll show up for a federal trial.

Jeremy Johnson, of St. George, is set to be released Thursday from the Davis County Jail.

Sixteen people put up their homes, property or other financial holdings to secure Johnson's release. A lien is being placed on each of the properties, which are in Utah and California. Should Johnson flee prosecution, the properties would be forfeited to the federal government.

U.S. Magistrate Judge David Nuffer approved the agreement at a hearing in Salt Lake City's federal court Wednesday, although Johnson can't be released until the liens on the Utah properties are filed with county recorders.

Johnson's attorney, Nathan Crane, said the paperwork should be complete by Wednesday afternoon.

Other conditions of Johnson's release include wearing an ankle monitor and surrendering both his passport and his pilot's license.

Johnson, 35, has been incarcerated since he was arrested at a Phoenix airport June 11. He was carrying more than $26,000 in cash and a one-way plane ticket to Costa Rica.

Nuffer had previously refused to release Johnson citing concerns over his pilot's license, extensive international contacts and access to large sums of cash.

Johnson has pleaded not guilty to one count of mail fraud. Prosecutors allege that 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 faces a 20-year prison term if convicted.

The single criminal charge parallels a Federal Trade Commission civil action filed in Las Vegas last December. In that case, a federal judge issued an injunction freezing Johnson's reported millions of dollars in assets and restricting his ability to make money from Internet ventures.

Johnson's Utah defense attorney, Nathan Crane, has said Johnson was operating a legitimate business.

Johnson's private attorney, Travis Marker, who is involved in the FTC case, said Wednesday that a settlement proposal is being discussed. It's unclear how a settlement in that proceeding, which includes nine other defendants, would affect Johnson's criminal case in Utah.

Based on evidence gathered in the FTC investigation, federal prosecutors in Utah have said they are considering filing a superseding indictment that would likely include additional charges.

Johnson is a well-known Utah businessman and philanthropist who has donated generously to charities and to the political campaigns of Utah Attorney General Mark Shurtleff. Johnson also has used his personal helicopters to aid southern Utah police agencies with search and rescue efforts.

Johnson made international headlines in January 2010 when he purchased a plane to fly doctors and other critical supplies to Haiti following a devastating earthquake.