Suspect ties attorney general to scheme

Utah businessman accused of software fraud

SALT LAKE CITY Ė A Utah businessman accused of running a fraudulent $350 million software scheme says the state attorney general arranged a deal to pay Senate Majority Leader Harry Reid to make a federal investigation into the software business disappear.

St. George businessman Jeremy Johnson, whoís accused of billing hundreds of thousands of consumers for products they never ordered, told The Salt Lake Tribune that newly elected Attorney General John Swallow set up a deal in 2010 for Johnson to pay $600,000 to people connected to Reid.

Johnson says be believed that Reid, a Nevada senator, might intervene in the Federal Trade Commissionís investigation.

Swallow strongly denies the allegations and maintains he offered only to connect Johnson with a lobbying firm. At the time, he was serving as Utahís chief deputy attorney general.

The FBI and Reidís office would not comment about the allegations.

Federal prosecutors initially charged Johnson, 37, with one count of mail fraud. He had been set to enter a guilty plea Friday.

But that deal fell apart after Johnson and prosecutors disagreed about the terms. Johnson instead decided to maintain his not guilty plea, and the case is set to go to trial.

If convicted, Johnson could face decades in prison. He is currently free on a $2.8 million bond.

On Saturday, the Tribune reported that Johnson provided emails, financial statements, photos, and a transcript of a recorded meeting with Swallow to the newspaper. Only one email from Johnson was available on the newspaperís website.

After the Federal Trade Commission filed a lawsuit against Johnson and nine business associates in December 2010, Johnson said he asked Swallow to return part of the $250,000 he had paid. Johnson said he doesnít know if anyone connected to Reid received it.