Jeremy Johnson, the owner of iWorks, a Utah-based marketing company, went on trial this past week in Federal Court – with Johnson strangely representing himself, and unable to give any reason for this weird behavior because of a gag-order by the judge.
Why the secrecy? Because while Johnson is charged with extensive bank fraud via a system of shell companies to hide chargebacks, he is also part of a corruption case against for attempting to bribe public officials.
Prosecutors claim that Johnson and partners created new fake companies when they were added to blacklists because of extensive chargeback issues. Records show that they formed over 37 shell companies in the name of employees and friends, in order to get new processor accounts to charge customers – even though they were banned from the processing industry from getting new accounts.
Johnson’s defense is presenting a simple defense, along with other attorneys for his co-conspirators: that the banks knew about his fraudulent activities, and even helped him to create the new accounts. He had to put down $5.5 million ahead of time for potential fines when making these accounts, and everyone involved from the banks, brokers and the credit card companies were well aware he was behind the accounts.
Of course, the Banks and Credit Card Issuers deny that they knew about Johnson’s schemes, as they lost millions from fraudulent transactions.