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Indicted St. George businessman Jeremy Johnson was following the advice of then-Utah Attorney General Mark Shurtleff when he aborted a plea bargain agreement in 2013, federal prosecutors said Monday.
Shurtleff advised Johnson to go into a hearing in which he was expected to plead guilty to two felony charges "and in the middle of the proceeding, blow it up by stating that the only reason he was pleading guilty was that the federal prosecutors had threatened to indict members of his family," prosecutors said in a court filing.
Prosecutors used the Shurtleff advice heard in a recorded conversation as part of their attempt to rebut a motion to dismiss 86 criminal charges against Bryce Payne, a co-defendant with Johnson and three others who operated Johnson's online marketing company called I Works.
Payne's attorney, Ed Wall, has called for dismissal of the case against Payne because, Wall argued, federal prosecutors had agreed to Johnson's demands that no one else would be charged in the case as part of negotiations over a plea agreement.
In their rebuttal, federal prosecutors argue that Johnson saw in Shurtleff's suggestion "a tactic that could derail the entire federal prosecution."
Johnson had a close relationship with Shurtleff as a friend, political campaign donor and ally in charitable causes before Johnson was first charged in federal court in June 2011. Johnson recorded the Oct. 8, 2012, meeting when he met with Shurtleff and complained that he had only agreed to plead guilty because federal prosecutors had threatened to indict family, friends and co-workers if he did not. Federal prosecutors have denied threats were made.
Wall's motion was joined by attorney Steven Killpack, who represents former I Works employee Ryan Riddle.
Both Payne and Riddle's names were among those of a number of people Johnson had sought to shield from prosecution at the Jan. 11, 2013, hearing where he had been expected to plead guilty.
At the hearing, federal prosecutors had agreed to include as part of the public record two lists of names of people Johnson had wanted protected from prosecution, Wall's motion says. Prosecutors had agreed no one would be charged from those lists, even if the plea agreement didn't go through, the motion argues.
But in the Monday filing, the U.S. Attorney's Office said there had been no agreement of nonprosecution of specific people, only a general statement that no one else would be charged related to I Works if Johnson pleaded guilty, which he ended up not doing.
Wall's motion to dismiss is pending, and he declined comment on the government's response. The U.S. Attorney's Office for Utah also declined comment. Both sides are under a gag order in the case.
In a decision also issued Monday, U.S. Magistrate Judge Paul Warner refused to let another attorney intervene in the case in a dispute over a batch of emails the government seized that were between Johnson, at least one other defendant and their attorneys. Normally such communication is to remain strictly private and is not seen by prosecutors.
Karra Porter, an attorney for I Works and Johnson's family in a Federal Trade Commission lawsuit pending in Nevada, has said that emails with her law firm were among those seized in a search warrant.
She asked to intervene in the criminal case to protect the firm's private attorney- client communications, but Warner denied the motion without comment. He also earlier turned back a request by attorney Marcus Mumford, who represents defendant Scott Leavitt, to participate in a hearing called to hear evidence about the seizure of the emails. That hearing is now set for Oct. 29.
A four-week trial in the criminal case is set for Feb. 1. The FTC lawsuit is scheduled to go to trial the previous month.
Shurtleff and his successor at attorney general, John Swallow, face a number of criminal charges in state court that result in part from their involvement with Johnson.