"They are absolutely not true," Johnson said of the allegations in an interview at his St. George office. "I never charged any consumer for anything without their consent."
After a massive earthquake struck Haiti in January, Johnson flew doctors, food and supplies into the impoverished Caribbean nation and then flew orphans to Florida where they met their adopting families. When state parks ranger Brody Young was shot last month near Moab, Johnson flew his own helicopter to help in the search for a suspect.
This week, Johnson ferried supplies to residents stranded by floods in the St. George area. He also has carried journalists in his helicopter during local news events. Salt Lake Tribune reporters and photographers have flown with Johnson in Moab and during this week's flooding.
The FTC called Johnson the "mastermind" of I Works Inc., the center of a host of companies that sells products under hundreds of different names. According to the 81-page lawsuit, the products contain "make-money schemes," "stay-healthy programs," and information about government and private grants that purportedly could be used to pay personal expenses.
After hundreds of thousands of customers sought refunds from credit card companies, claiming they were charged for unauthorized purchases, Visa and MasterCard fined I Works and the other companies and terminated many of their accounts, the complaint says. Johnson and others then created dozens of "shell" companies to accept credit card payments in order to avoid fines and detection, it says.
"They had no employees, they had no office locations, they were mail drops" said Collot Guerard, the lead FTC attorney on the lawsuit. "They were essentially fronts and they didn't have any substance to them other than lending their name to obtain a new merchant account when Jeremy Johnson and I Works were no longer able to get merchant accounts."
Guerard said Visa and MasterCard had alerted the FTC about the activities of I Works. She declined to provided a total dollar amount that investigators believe Johnson and I Works took in from consumers. A call to Visa was not returned.
Johnson said the order forms for his products prominently detail terms and disclosures that show customers will be charged $59.95 monthly if they do not call to cancel within a seven- to 14-day trial period. He pointed to prominent companies such as American Express that feature similar offers where consumers who are offered a "free" product must cancel or they will be charged for other goods or services.
"Why doesn't the FTC go after them," Johnson asked.
Johnson has retained Washington, D.C. attorney Mark Schamel to defend him from the FTC suit.
"I Works and its employees sold a legitimate product using legitimate marketing and there was no fraud," said Schamel, who declined to answer specific questions.
The FTC says false testimonials were used to lure people to order company products. Consumers were asked to provide credit card information to pay for small shipping and handling fees for what otherwise was to be free information. Then, "I Works proceeds to charge them hefty one-time fees of up to $129.95 and monthly recurring fees of up to $59.95 for the grant or money-making programs," the complaint said.
FTC Chairman Jon Leibowitz said in a statement: "No consumer should be sucker-punched into making payments for projects they didn't know about and don't want."
Johnson said when he heard of the investigation earlier this year, he hired a former FBI agent who runs a private firm to give him a polygraph test with questions about whether he took money without authorization and allegations of false testimonials.
"It [the polygraph] showed that I was truthful," he said.
Johnson and I Works have been major donors to Attorney General Mark Shurtleff's political campaigns, contributing more than $72,000 to Shurtleff since 2008.
In 2002, Johnson agreed to pay $372,000 without admitting guilt to settle a lawsuit filed in federal court by the Securities and Exchange Commission. The complaint charged that Johnson and his company, RumorSearch.com Inc., made false and misleading statements touting the shares of a company called FEVI without disclosing that Johnson owned 9,200 shares of the company and had sold other shares for a profit of $315,848.
In 2007, I Works was cited by the Utah Department of Commerce for numerous counts of suspected fraud, but the case was dismissed.
Tribune reporter Robert Gehrke contributed to this story.
Named in the suit
The FTC's complaint names Jeremy Johnson and nine other individuals: Duane Fielding, Andy Johnson, Loyd Johnston, Scott Leavitt, Scott Muir, Bryce Payne, Kevin Pilon, Ryan Riddle and Terrason Spinks. In addition, there are 10 corporate defendants: I Works Inc.; Anthon Holdings Corp.; Cloud Nine Marketing Inc.; CPA Upsell Inc.; Elite Debit Inc.; Employee Plus Inc.; Internet Economy Inc.; Market Funding Solutions Inc.; Network Agenda LLC; and Success Marketing Inc.
The 51 shell companies named are Big Bucks Pro Inc.; Blue Net Progress Inc.; Blue Streak Processing Inc.; Bolt Marketing Inc.; Bottom Dollar Inc., doing business as BadCustomer.com; Bumble Marketing Inc.; Business First Inc.; Business Loan Success Inc.; Cold Bay Media Inc.; Costnet Discounts Inc.; CS Processing Inc.; Cutting Edge Processing Inc.; Diamond J. Media Inc.; Ebusiness First Inc.; Ebusiness Success Inc.; Ecom Success Inc.; Excess Net Success Inc.; Fiscal Fidelity Inc.; Fitness Processing Inc.; Funding Search Success Inc.; Funding Success Inc.; GG Processing Inc.; GGL Rewards Inc.; Highlight Marketing Inc.; Hooper Processing Inc.; Internet Business Source Inc.; Internet Fitness Inc.; Jet Processing Inc.; JRB Media Inc.; Lifestyles For Fitness Inc.; Mist Marketing Inc.; Money Harvest Inc.; Monroe Processing Inc.; Net Business Success Inc.; Net Commerce Inc.; Net Discounts Inc.; Net Fit Trends Inc.; Optimum Assistance Inc.; Power Processing Inc.; Premier Performance Inc.; Pro Internet Services Inc.; Razor Processing Inc.; Rebate Deals Inc.; Revive Marketing Inc.; Simcor Marketing Inc.; Summit Processing Inc.; The Net Success Inc.; Tranfirst Inc.; Tran Voyage Inc.; Unlimited Processing Inc.; and Xcel Processing Inc.
Source: Federal Trade Commission
What the FTC's lawsuit is seeking
The Federal Trade Commission lawsuit against Jeremy Johnson, I Works and affiliated companies asks for an injunction to stop violations of federal laws, refunds for consumers, recovery of costs incurred by the FTC and the return of "ill-gotten monies."
To read the FTC complaint, online. http://bit.ly/eq3fiJ