A Utah man linked to a $275 million scam has reportedly gambled away millions of dollars at Las Vegas casinos and by playing online at Full Tilt Poker and PokerStars. According to a report by the Las Vegas Sun, Jeremy Johnson of St. George, Utah gambled the money away even after he was ordered by the Federal Trade Commission (FTC) to preserve his assets because he had been targeted in an investigation.
The FTC claimed Johnson and his companies including I Works and Elite Debit scammed consumers out of at least $275 million by luring them into acquiring trial memberships for phony services and then repeatedly charging their credit and debit cards monthly fees. Johnson denied the allegations.
U.S. District Judge Kent Dawson issued a temporary restraining order freezing the assets of Johnson and his associated companies on January 13. The government hoped to seize and liquidate the assets in order to make restitution to the alleged victims.
When a court-appointed receiver company sorted through Johnson’s assets, it found that “$59 million was dissipated by supporting lavish lifestyles and investments in real properties, aircraft, vehicles, businesses, brokerage trading accounts, precious metals, and was distributed or loaned to family, friends, and related entities.”
Samuel Jacobson, an FTC investigator, said in a court declaration Wednesday that Johnson was a frequent gambler at Wynn Las Vegas, MGM Grand, other MGM Resorts International properties, and also gambled frequently at Full Tilt Poker.
Tiltware LLC, owner of Full Tilt Poker, last month provided information to the FTC showing Johnson played there using the name “ginette22.” According to the tournament tracking site SharkScope, “ginette22” was a regular at the high-stakes heads-up sit and gos on Full Tilt last year. The account played tournaments as high as $5,000 against some of the biggest winners on the site, but the buy-ins declined to as little as $20 by the time its user ceased playing in December 2010.
Between April and October 2010, Johnson lost $1.536 million on Full Tilt Poker, Jacobson said. Johnson said that he also played on PokerStars and, when asked how much he had lost overall, replied, “way too much.”
“I gambled with money that I earned from my companies and since I no longer have any of that, it’s been a really good cure for me, my addiction,” Johnson said. “Sometimes I’d win a lot of money and then I’d think in my mind – I’d try that same way and do it again, and it didn’t work and didn’t work… And you’d lose even more trying to win what you had before.”
Johnson added that at times he turned his account over to poker pros who agreed to split the winnings with him. But they made no money for Johnson in the end.
Johnson also said in the deposition that his companies had merchant account arrangements with online poker companies including Full Tilt. In addition, he used – with their permission – money belonging to the merchants to invest in oil drilling ventures.
Chief U.S. District Judge for Nevada Roger Hunt on Thursday sided with the FTC in extending the asset freeze against Johnson and his companies as well as orders limiting their business activities. Hunt signed an order that stated the following: “There is good cause to believe that defendants have engaged and are likely to engage in acts and practices that violate (part of) the FTC Act and other acts and regulations.” The order is likely to remain in place while the case is litigated.
