While Johnson said he believed Swallow had done wrong, he still wanted to protect Swallow from possible prosecution. Johnson said a Federal Trade Commission lawsuit against himself and I Works plus a criminal charge had ruined his life and he did not wish the same fate on Swallow.
In an interview before the hearing, Johnson said he did not believe he was guilty of the bank fraud and money-laundering charges contained in the plea agreement. But he said Assistant U.S. Attorney Brent Ward, the lead prosecutor in his case, had threatened to indict family members, friends and others if he did not plead guilty.
On Friday, Johnson told the judge, "Mr. Ward said that they would arrest my mom or my wife, my father-in-law but this agreement will make sure that they don't."
U.S. Attorney for Utah David Barlow told reporters after the hearing there had been no threats.
Ward confirmed several times in court that the government would not investigate or arrest anyone else connected to the I Works investigation as part of the plea deal.
"We have committed there will not be other further indictments … period," Ward said.
But then Johnson produced the list of names, and U.S. District Judge David Nuffer asked whether it should be entered into the official record. That prompted a hurried huddle involving Ward, Barlow and other attorneys.
Nuffer called a recess and asked the two sides to reach an agreement. Prosecutors huddled in a hall outside the courtroom, conferring and apparently going over the list.
Then the parties met in a jury room behind closed doors. After a lengthy period, the two sides emerged and said they had not reached an agreement. Ward said as a result, prosecutors would seek an additional indictment, and another hearing was scheduled for February to set a trial date for Johnson.
Johnson, his company I Works and business associates were sued by the FTC in December 2010, then he was arrested on a single mail fraud charge in June 2011.