LAS VEGAS -- A high-rolling gambler whose companies made hundreds of millions of dollars on the Internet saw his plea deal collapse in federal court Friday, which means additional criminal charges could be coming soon.
Businessman Jeremy Johnson of St. George, Utah, was a fixture at Las Vegas casinos for years, but his online empire collapsed after federal agencies started investigating allegations that his companies ripped off vast numbers of consumers.
Jeremy Johnson was well known at the Wynn and other high-end casinos where he gambled and lost huge sums.
He bought houses, boats, planes, hoarded gold and silver, but the Internal Revenue Service and Federal Trade Commission allege that those riches were obtained through deceptive pitches aimed at hundreds of thousands of desperate people, those who could least afford to be victimized.
Johnson was reportedly ready to plead guilty to fraud but the deal fell apart and soon he could face more charges in a superseding indictment.
The Federal Trade Commission first went after Johnson in 2010 with a massive civil complaint filed in Las Vegas, alleging that he had created more than 100 companies online that bilked hundreds of thousands of people out of close to $300 million. Johnson's companies used pop-up ads and spam to distribute CD's containing information on how to obtain government grants, grants which -- the ads said -- could be used to pay rent, mortgages, bills, for travel and for college, and never had to be paid back. But instead of charging just a nominal fee, victims said their credit cards were hit with charges for services they never agreed to.
In addition to the FTC's civil complaint, IRS agents in Nevada and Utah pursued criminal charges and Johnson was arrested in 2011.
One focus of the fraud indictment is what the government believes to be phony testimonials from supposedly satisfied customers. In order to stay in business and one step ahead of waves of consumer complaints, Johnson allegedly created a complex web of shell companies -- fronts with no assets or employees. Nineteen of his shell companies listed a small building in Henderson, Nev., as their headquarters.
Affidavits collected by the feds show that many of his victims were low-income families in Nevada and elsewhere, desperate for money or in danger of losing their homes.
Johnson has said all along he is innocent and even set up websites to attack the government's case. He was reportedly ready to plead guilty to fraud Friday in exchange for assurances that friends and family members would be spared prosecution.
A Las Vegas company was appointed as the receiver for his money and property. It told the government months ago that someone was trying to hide more than $50 million worth of Johnson's assets.
The U.S. Attorney's office in Utah said a new indictment could be issued within a few weeks.