Part Two: Third Accuser Comes Forward With Allegations Against AG John Swallow

Swallow Presser

Editor’s Note: This article is part of a series of reports by award-winning investigative reporter Lynn Packer who covered, among other stories, the Mark Hofmann Bombings, the Bonneville Pacific Fraud, the Olympic Bribery Scandal, the Utah Highway Construction Bribery Scandal, and the Paul H. Dunn/Afco Fraud.

Part two. Read part one here.

Brian Kitts
Brian Kitts

A new allegation against Utah’s top law enforcement officer erupted yesterday when Utah Political Capitol reported that a Canadian fugitive is accusing Swallow of influence-peddling on behalf of George Bybee. Brian Arthur Kitts, now ensconced across the border in Calgary, was engaged in a fierce legal fight with Bybee in bankruptcy court when, Kitts claims, Swallow entered the picture.

The facts, at least from Kitts’ perspective, are pretty straightforward: In late 2004 Kitts sought a short-term “hard money” loan from Bybee via Winterfox, LLC to save his Park City home from foreclosure. But Kitts, who was given no loan disclosure documents, soon discovered he owed a whopping 70 percent annual interest rate, defaulted on the loan, and filed for bankruptcy protection in an attempt to keep his house. That touched off a court battle that continued into 2013. At the heart of the fight was a lawsuit brought by Kitts within the bankruptcy process, accusing Bybee and Winterfox of failing to provide legally required loan disclosure documents and thereafter providing fake documents and lying about them in court.

Meanwhile, in the summer of 2007, the Utah Attorney General’s Office brought felony securities fraud charges against Kitts. While he believes those charges were politically motivated, he says at that point he didn’t even know who Swallow was.

After months of plea negotiations, Assistant Attorney General Neal Gunnerson offered Kitts a plea deal. If Kitts was willing to plead guilty on reduced charges with no fine or jail time, he would be required to make full restitution to his investors. Sentencing, however, was postponed for several months, and as the bankruptcy court fight between Kitts and Bybee continued to escalate—hundreds of thousands of dollars in legal fees were racking up—Gunnerson retired.

Kitts and his attorney claim that Assistant Attorney General Charlene Barlow—since appointed a third District Court judge—took over the case, and immediately threw out the wrist-slap plea bargain and substituted one that involved pleading guilty to felonies. Judge Barlow declined an interview and through her court clerk denied having anything to do with any Kitts plea bargain.

Embattled Utah Republican Attorney General John Swallow
Embattled Utah Republican Attorney General John Swallow

At this point, Kitts says he figured he needed to go over Barlow’s head and use some sort of political clout to restore his softer plea deal. “It was strange,” said a source familiar with Kitt’s actions. “He had heard through through the grapevine that [Tim] Lawson had access and influence with Attorney General Mark Shurtleff. The guy that came out of the woodwork as, for lack of a better term, kind of a facilitator for Shurtleff and Swallow.”

“Tim Lawson said, ‘Yes I will take on the case,’” Kitts told Utah Political Capitol via a phone interview from Canada. But he said Lawson told him “[Y]ou have some guys up there that really don’t like you. One of them is a pretty powerful guy. He is a lawyer and has something to do with your mortgage case.”

“Who?” Kitts asked.

“John Swallow,” Lawson purportedly replied. “I spoke to him on the phone about you and he says ‘What the hell are you doing business with that guy Kitts?  He’s a bad person. He hurt my friend and he is going to pay.’”

“Who is the friend? “ Kitts asked.

“George Bybee,” Lawson allegedly replied.

Although Swallow himself has declined any comment on these new allegations, the story is remarkably similar to the stories coming from both Jeremy Johnson and Marc Sessions Jenson—the other two convicted or accused fraudsters who have claimed Swallow used his influence both before and after working in the Attorney General’s office to persecute them. Swallow’s press spokesman, Paul Murphy, said during a short phone interview with Utah Political Capitol today that “John [Swallow] categorically denies knowing anything about the Kitts case, and for that matter was not even in the criminal division during that time. This is just another criminal spouting crazy stories.”

However, a source close to Kitts says he was told about the Lawson conversation, when Swallow’s and Bybee’s names were mentioned, either the day it happened or the day after, in September 2009. “Lawson told Kitts that he had spoken with Swallow who had said he has really caused a good friend a lot of trouble and ‘we’re going to get him’,” the source recalls hearing from Kitts near the time of the conversation, which seems to negate any possibility that Kitts is just piggy-backing on Jeremy Johnson and Marc Jenson.

“It seemed strange to me so much zeal and so much venom was coming from the AG’s office on a seemingly minor case,” the source said. But, he says, it did make some sense “if Shurtleff and Swallow were pulling the strings, and they were after Kitts because he had a legitimate claim in federal court against Bybee. So they were going to punish him.”

He said any involvement on Shurtleff’s and Swallow’s part to retaliate against Kitts on Bybee’s behalf would be “absolute fraud and an abuse of the government’s power.”

But Kitts did not stick around to see if he could make that case to the federal bankruptcy court. On October 22, 2010, the day he was supposed to appear in Utah state court for sentencing on the tougher felony charges, he sent an email from Canada to Judge Deno Himonas.

Kitt’s email to the judge laid out a story of how Kitts, at Tim Lawson’s urging, hired Utah attorney Dana Facemyer to renegotiate his plea deal, that Lawson insisted all communications with Facemeyr be through him, and how Lawson kept some of the legal fees Kitts paid Facemyer through Lawson. After six more pages of explanation he wrote, “I will not be in court today. I had no choice but to go to Vancouver myself to resolve the issues…” He asked the judge that “rather than issue a warrant for my arrest, that you allow me the time to…return to Utah and retain the services of new counsel…”

Judge Himonas was not accommodating. He slapped Kitts with a bench warrant for his arrest—a warrant that remains outstanding today.

But that did not keep Kitt’s bankruptcy from proceeding. It went on with Kitts in abstentia.  By now it was 2010, and the bitterness between Kitts and Bybee had reached a crescendo. Counsel for the bankruptcy trustee proved that Bybee’s Winterfox, LLC had failed to provide required truth-in lending documents in connection with the $1.35 million loan to Kitts, and that Bybee and Winterfox, LLC had then tried to deceive the court by providing fake documents and false testimony about the documents. A federal appeals judge found that the forms used to create the fake disclosures were not even on the market at the time the disclosures were dated.

The bankruptcy court approved a settlement of the Kitts/Bybee mortgage loan dispute earlier this year. Under the agreement, Winterfox, LLC is required to pay the trustee $500,000 for legal fees. That’s on top of the estimated $1 million+ Bybee paid his own counsel to fight Kitts. In addition, Winterfox, LLC had to forfeit any interest it would have made on the Kitts loan. But the court allowed Bybee to keep Kitts’ Park City residence that had served as collateral. It’s now up for sale.

The bankruptcy trustee would have referred the Bybee/Winterfox false documents and perjury to the US Attorney’s Office to review for prosecution, as rules require. But it’s rare that the US Attorney in Utah brings perjury charges.

Apart from his spokesperson’s comments today, Swallow remains silent as to any role he played or any knowledge he had of his two lobbyist clients–Winterfox and Bybee– faking documents and lying to the court. Bybee and Lawson also declined comment for this report.

Winterfox Document 1

Court Findings Cover Sheet with caption

8 Replies to “Part Two: Third Accuser Comes Forward With Allegations Against AG John Swallow

  1. Marc Jenson was never convicted of fraud. Why does the media continue to misrepresent the facts surrounding Marc’s case?

    1. That is one of the biggest problems with media. Although they do state facts as they are….sometimes, its all about what gets ratings. If they put a little twist on a story they may just get bigger ratings. Kitts has never been convicted of any crime either. In his case, he was talked into signing a plea agreement that violated his constitutional rights from the first page to the last.

  2. One thing I’d like too point out, Marc Jenson was not convicted of fraud, he plead guilty under advice of bad attourneys. His plea of abeyance was for Unregistered securities, and as of right now he is the only person in the United States serving jail time for that.

    Another interesting thing is Marc made very similar claims about Shurtleff’s case against him regarding both his initial plea (which Shurtleff offered such an easy plea deal to make up for his crooked dealings, that’s the only way that plea deal makes sense) and with the following Mount Holly case, which even resulted in news coming out about how Shurtleff and Swallow attempted to extort Marc.

    At this point we should consider the possibility that Swallow and Shurtleff are even more crooked than we know, and perhaps their detractors are less so.

    1. The outright fraud and corruption inside The Division of Securities in Utah is completely out of control. Between 2006 and 2008 an outside commission did an audit on them and what they came away with is disgusting and shameful. I have a copy of that report along with the names of the top officials who committed the fraud and corruption. And to make maters worse, nothing has changed. Although I don’t know all of the details of the Jensen case, I can tell you that he was a victim of what was going on at the DOS.

      Then once the AG’s office got the case, it became a feeding frenzy for the two bandits, Shurtleff and Swallow lining their pockets with “gifts” from people like Jensen. How many other Victims like Jensen and Kitts are out there that are frightened to death to come forward.

      Although Jensens case seems to involve millions of $$$ from investors, the Kitts case is less than $90,000 and even that amount is questionable. Apparently 2 of the 7 investors that the DOS solicited trying to get them to file a complaint made bogus claims in the first place so that amount is probably more like $40,000. To top it off only 1 of the 7 that were solicited actually signed an affidavit. The rest refused to sign anything.

      1. Jenson’s original case began when he split from a business partner. The partner was upset, and as a large donor to Shurtleff suddenly Jenson found himself in trouble for things that’d never happened. This partner was fully paid off before hand, he just had hurt feelings. After several years of work they where able to find a way to get Jenson in trouble, Jenson’s lawyers suggested the plea of abeyance, and then when the judge changed the terms of the plea deal Jenson’s lawyers just through him under the bus. Later it was found that one of them had political aspirations and a close relationship with Shurtlef, potentially a trade had been made.

        The Mount Holly Case gets even worse with Scott Reed supposedly stalking Jenson’s family, and the fact that the 2 “star” victim witnesses have both been factually proven to be lying about their complaints. (one received a home on the mount holly property as well as his cash back and this was proven in court. The other claimed he never gave Jenson the permission to take his investment, even though the guy signed documents in triplicate ordering a wire transfer and then authorizing it) The entire case has been a witch hunt and a personal vendetta.

        I hope the FBI and the state probes come up with something. From what I can see the guy got screwed pretty hard. I’m not saying he didn’t make mistakes but his punishment goes so far above what anyone else has received for the same crime…. I’ve got a friend close to the situation who has told me some really interesting things about it, and the crazy part is so far everything he’s said has come out in the papers. He was telling me about the Shurtleff/Swallow visits to Cali a long time ago. We really need our state purged of some of its top officials.

      2. Actually, there is one major misunderstanding about Jenson and his case. Although the transaction was in the amount of a few million, all the parties involved were made whole BEFORE Marc Jenson was unjustly charged and incarcerated. This is exactly what makes Jenson’s case so suspicious, especially the involvement from both Shurtleff and Swallow.

        Rick White is the businessman with hurt feelings in this complicated situation. After investing $5M with Jenson and getting back $6.125M (in other words, Rick White made more than a 20% return), White paid thousands to Shurtleff’s campaign fund on the very day that he filed a criminal complaint against Marc Jenson with the Division of Securities. Rick White then made an additional campaign contribution in the thousands to Shurtleff on the day Marc Jenson was charged.

        It is time to shine very bright lights into the office of the current and former AG, and see what else comes crawling from the shadows.

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