Las Vegas High-roller, Fraud Lawsuit Target Faces Hearing on Mail Fraud Charges

Interesting case worth following!

St. George Businessman Jeremy Johnson; Las Vegas High-roller, Fraud Lawsuit Target Faces Hearing on Mail Fraud Charges


(Las Vegas, NV) - A detention hearing is set for Wednesday for a Utah man tied to Las Vegas casinos, Internet poker companies and a big Las Vegas fraud case arrested Saturday on a mail fraud charge. (For Complaint, click on link)

The U.S. Attorney’s Office in Salt Lake City announced the arrest of Jeremy David Johnson of St. George, Utah, by IRS agents. A spokeswoman said Johnson was arrested at a Phoenix airport while en route to Costa Rica, where the government believes Johnson has business interests.

Johnson for years was known in Utah as a philanthropist who used his fleet of aircraft for rescue and humanitarian missions.

But last year he and his companies were sued by the Federal Trade Commission in Las Vegas in what the FTC called a nationwide $289 million Internet scam (up from $275 million alleged earlier) in which consumers were deceptively enrolled in programs to obtain government grants and for other services.

As the FTC case in Las Vegas developed, it was revealed Johnson was a high-roller at Wynn Las Vegas. He lost $1.35 million there between 2006 and early 2011 and also gambled at MGM Resorts International properties including the MGM Grand, Luxor and Bellagio.

It was also revealed Johnson lost another $1.536 million playing on the Full Tilt Poker website between April and October 2010 and that he did business with Internet poker companies.

Johnson had business ties with Las Vegas businessman Chad Elie, who was indicted in April’s federal Internet poker crackdown; and Johnson did business with SunFirst Bank in St. George, Utah, whose vice chairman, John Campos, was indicted in the same poker crackdown.

Johnson’s arrest Saturday came after a U.S. magistrate judge in Utah signed a criminal mail fraud complaint presented by Jamie Hipwell, an IRS criminal investigator assigned to the IRS's Salt Lake City post for the Las Vegas Field Office.

Similar to the FTC civil lawsuit, Hipwell alleged in the criminal complaint that Johnson, through his companies including I Works Inc. and Elite Debit – used the U.S. mail and false advertising techniques to victimize "hundreds of thousands of consumers."

Hipwell added that besides his activities in Costa Rica, Johnson "has substantial resources in other countries including real estate holdings in Belize and the Philippines."

In the Las Vegas civil lawsuit, a federal judge has frozen Johnson’s assets and appointed a receiver to preserve them.

Attorneys for Johnson last month asked the federal court to release funds held by the receiver to cover Johnson’s living expenses and legal costs.

The receiver opposed that motion, noting serious concerns about Johnson’s compliance with the asset freeze and concerns Johnson wasn’t making his assets available for sale to cover losses covered by consumers in the alleged Internet scam. The receiver also moved to sell several Johnson assets.

Attorneys for the FTC also opposed Johnson’s request, noting, among other things, "Johnson’s continuous business relationship with the Vowell brothers, the brothers with whom the Johnson defendants worked to process electronic checks for the on-line poker entities PokerStars and Full Tilt Poker."

Records in two lawsuits say Johnson and Elie have done business with well-known St. George businessmen Jason and Todd Vowell. One or both of the Vowells have been in the auto dealership industry and had an interest in the St. George Roadrunners minor league baseball team and the Liahona Academy for troubled youth in Southern Utah.

The FTC noted the founders of PokerStars and Full Tilt Poker had been charged in the April nationwide online poker crackdown with bank fraud, money laundering and illegal gambling.

In a June 1 court declaration, Johnson said: "I have had numerous business dealings with the Vowells over the last 10-plus years, one of which was that the Vowells provided money transfer services for some of Elite Debit Inc.’s clients. Neither the Vowells nor myself have been indicted for bank fraud, money laundering or any other illegal activity. Apparently, the FTC believes it ought to create undue prejudice through guilt by association."

Johnson said in an earlier court declaration that because of the FTC lawsuit and the activities of the civil lawsuit receiver, Todd Vowell has ended a business relationship with Johnson involving commercial aircraft operations.

"He explained to me that the receiver has subpoenaed information from him and he has incurred nearly $200,000 in fees and costs to deal with the subpoenas. He said that many of his business partners will no longer do business with him because of the receiver’s inquiries into his finances," Johnson wrote in that declaration. "He told me that Wells Fargo has terminated many of his business accounts because of the receivership."