Swallow scandal figure Jeremy Johnson is re-sentenced

SALT LAKE CITY -- Jeremy Johnson, a St. George businessman known for his philanthropy who became embroiled in fraud accusations and was at the center of a massive political scandal involving two former Utah Attorneys General, has been sentenced again.

Johnson was sentenced on Wednesday to 87 months, or seven-and-a-half years, in federal prison after the 10th U.S. Circuit Court of Appeals in Denver ordered a lower court to do it over. The Court sided with Johnson on issues surrounding loss in the fraud case that he was convicted in.

Johnson will serve another five years in prison. He's served about three years so far.

Johnson, 42, was originally sentenced to 11 years in federal prison in 2016 after being on eight counts of making a false statement to a bank, but acquitted of 78 other counts including conspiracy, wire fraud, bank fraud and money laundering. He was accused of running shell companies to handle "charge backs" for credit card payments from his company, iWorks. Federal prosecutors accused him of doing it because banks had flagged them on a list of merchants not to do business with.

"It was a terrible decision and one I wouldn't make again," Johnson told the judge of the charge backs.

He cried as he spoke before a packed courtroom of supporters about how he once had 1,000 people working for him.

"They counted on me to do my job so they could have theirs. I failed miserably," he said.

In arguments to the judge on Wednesday, Johnson's attorney, Paul Moxley, argued that the banks actually made money off of fees than they actually lost.

"The house always wins," he said.

Defense attorney Richard Casper asked the judge to release Johnson from prison immediately, giving him credit for time served.

Federal prosecutors argued that banks were victimized and there was no evidence at trial that showed the financial institutions made money off the charge backs.

"Nothing has really changed, except perhaps today we hear for the first time a modicum of acceptance of responsibility... some actual remorse," assistant U.S. Attorney for Utah Michael Kennedy argued.

Judge Dee Benson told Johnson he was "uncooperative and arrogant" when appearing before him in another case. However, he said he had seen signs of humility, which is why he went for the lower sentence than what prosecutors asked for (as much as 11 years).

Johnson was a key witness in the case against former Utah Attorneys General Mark Shurtleff and John Swallow. In 2013, he claimed then-Utah Attorney General John Swallow was going to bribe then-Senate Majority Leader Harry Reid, D-Nevada, on his behalf. The accusations eventually led to the criminal cases against Swallow and his predecessor, Mark Shurtleff, who were accused of soliciting gifts and donations from people facing investigation by the Utah Attorney General's Office.

During Swallow's trial, Johnson was subpoenaed to testify and refused to cooperate, fearing more prosecution by the feds. He was found in contempt and jailed.

The case against Shurtleff was dropped. Swallow was acquitted by a jury.

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