SALT LAKE CITY — A court-appointed receiver says a St. George businessman used a string of shell companies to conceal more than $51 million in assets from federal regulators investigating his Internet-based business operations. In a January report filed in federal court in Las Vegas, receiver Rob Evans & Associates said a records search found Jeremy Johnson formed 39 new business entities after the Federal Trade Commission launched its investigation in February 2010. The companies were formed under other people’s names but held Johnson’s assets, according to the report. The report contended the funds are from Elite Debit, Johnson’s company that generated revenue by processing electronic checks from online poker companies. The FTC filed a civil lawsuit against Johnson and nine business associates in December 2010. The courts appointed the receiver to take over all of Johnson’s businesses and assets in order to preserve them while the case makes its way through the court process. FTC attorneys contend Johnson’s online company, iWorks, bilked consumers out of some $350 million by charging unauthorized amounts on their credit or debit cards. The receiver found that in an examination of records from 35 financial institutions, 25 businesses, and 115 known affiliated companies, there were 65 previously unknown entities that "involved in moving funds and concealing" assets. "A majority of these entities do not appear to have generated any business income and were used as conduits to reroute funds and to commingle and hide funds," The Salt Lake Tribune reported on Monday. The report claimed those companies were not included in a court order that froze Johnson’s assets or appointed the receiver. Evans and Associates said it should be able to secure the assets held by those companies. A St. George entrepreneur and philanthropist, Johnson denied the allegations in a telephone call with The Associated Press on Tuesday. Johnson said the so-called shell companies identified are merchants who contracted for Elite Debit’s services and that he had no personal involvement with the businesses. Johnson said Elite Debit passed through money to its merchants and extracted a fee for the service. "Most of them wouldn’t even know me," Johnson said of the merchants. "The government, what they want to do, is say that because one of Jeremy Johnson’s companies took funds out of all those different accounts that means it’s all his money. That’s their theory." Separately, Johnson has pleaded not guilty to a single federal criminal charge of mail fraud in Salt Lake City’s U.S. District Court. If convicted, he faces up to 20 years in prison. The charge parallels the allegations of the FTC’s criminal complaint.
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