Utah Attorney General Linked to Johnson Bribery Scheme

The saga of Jeremy Johnson, a central figure in the SunFirst Bank of Utah online-poker payment processing business at the heart of the “Black Friday” crackdown, continued this week with new allegations of the attempted bribery of US Senator Harry Reid (D-NV) by John Swallow, who was subsequently elected Utah’s Attorney General.

The latest allegations, as published by the Salt Lake Tribune, have Johnson claiming that Swallow helped broker a deal to attempt to bribe Reid with $600k to make an ongoing Federal Trade Commission investigation into Johnson’s iWorks marketing empire go away.

An e-mail sent from Swallow to Johnson that was also published by the Salt Lake Tribune appears to support Johnson’s allegations, in which Swallow was paid to work with another well-connected businessman, Richard M. Rawle (now deceased), in approaching Reid.

The letter also indicates that US Senator Orrin Hatch (R-Utah) was already on board as part of the scheme to defuse the FTC investigation.

According to the e-mail, Swallow recommended Johnson use the following as part of the narrative to convince Reid to intervene on behalf of iWorks’ interests:

Iworks would like to sit down with Senator Reid and show him what they have done and see if the Senator would be willing to encourage the FTC investigators to take a close look at Iworks… and try to resolve this matter equitably and in good faith, before litigation is started.

Earlier in the same e-mail, Swallow wrote, “I don’t know the cost, but it probably won’t be cheap.”

A spokesperson for Reid denied the allegations stating, “Senator Reid has no knowledge or involvement regarding Mr. Johnson’s case.”

Johnson has alleged that a $250k down payment on the bribery was made to Swallow, $75k of which was purportedly paid back by Swallow just last month after attempts to stop the FTC charges proved unsuccessful. According to the SLT report, Johnson met Swallow at an Orem, UT Krispy Kreme doughnut shop in April 2012 to discuss the matter, in a meeting secretly recorded by Johnson’s associates.

Johnson also reportedly urged Swallow to withdraw from last November’s Utah elections, following through on threats to damage Swallow after his own civil and criminal indictments occurred. Swallow, formerly Utah’s Deputy Attorney General, succeeded Shurtleff to Utah’s top legal post after Shurtleff retired due to health reasons.

Both Swallow and Shurtleff were also instrumental in reaffirming to Johnson that his proposed SunFirst Bank poker-processing plans were not known to be against any Utah laws.

A timeline published as part of the SLT report includes the following entry:

“Oct. 31 » Johnson meets with Shurtleff, urges him to persuade Swallow to drop out before the election, saying information on their deal will be made public.”

Johnson had close ties to both Swallow and former Utah AG John Shurtleff in connection with Johnson’s prominent role in Utah’s established telemarketing and e-marketing industries. Johnson was charged in late 2010 after an extensive FTC investigation into Johnson’s business practices, which involved hundreds of millions of dollars of unauthorized credit card charges against unknowing consumers.

Photographs showing Shurtleff in Johnson’s private jet and yellow Lamborghini sports car had been widely circulated in reports exploring the connections between the two.

Johnson was also a central figure in the Black Friday case, though he has remained unindicted for unexplained reasons while figures such as banker John Campos and online marketer Chad Elie (who has been referred to as a one-time protege of Johnson’s) faced wire and bank fraud complaints.

Elie subsequently testified at a detention hearing in the Johnson FTC hearing about Johnson’s extensive hiding of assets in the forms of gold, silver, currency, real estate and other forms, following a fallout between the two.