Kristi Johnson wheeling and dealing in Achieve criminal case
Revealed in a recently filed motion in the SEC’s case against Achieve Community reveals that Kristi Johnson is the subject of a DOJ criminal investigation in North Carolina.
But it’s not the confirmation of an investigation that’s interesting about the motion, so much as what it’s asking for.
As part of the SEC’s civil case against Achieve Community, a preliminary injunction was granted last month.
Carrying over from a previously granted temporary injunction, both saw Kristi Johnson prohibited from transferring any Achieve Community investor funds she might have access to.
Enter DOJ investigators into the picture, who on February 27th approached Johnson about doing just that.
So says a Joint Motion filed by Johnson’s lawyers and the SEC on the 27th of February itself:
On the afternoon of Friday, February 27, 2015, the criminal authorities approached Ms. Johnson’s attorneys about the possibility of Ms. Johnson voluntarily transferring funds associated with both the on-going criminal and civil investigations from an “ipayDNA.info” processing account used by the Achieve Community that is still within her control.
The account is believed to be located in Hong Kong and, as such, creates obstacles for reach by authorities with search and seizure powers.
As of February 26, 2015, this account was believed to have funds in amounts in excess of $800,000 in United States currency.
For those unfamiliar with the processor, iPayDNA were brought in to accept deposits from Achieve investors after Payoneer terminated the company’s ewallet services.
Shortly after iPayDNA were hooked up the Achieve backoffice, reports of credit card fraud from Achieve investors began to surface.
Whether that comes up later in the ongoing criminal investigation remains to be seen, but for now attention is focused on the $800,000 iPayDNA accepted from Achieve investors.
Due to the injunction against her, Johnson is unable to transfer the funds in question – even if it’s the DOJ asking her to do so.
Leave from the court to transfer the funds is required, hence the filing of a Joint Motion asking for permission to do so being filed on the 27th.
In order to assist the authorities’ efforts to freeze and possibly seize a substantial amount of United States currency, Ms. Johnson, jointly with the United States Securities and Exchange Commission, requests that the Court relax the preliminary injunction issued in this case, on a one time basis, to permit the funds transfer from the “ipayDNA.info” account, to which she has access, to a pre-arranged bank account located in the United States, such that authorities will be able to freeze and potentially seize the funds as part of their on-going criminal investigation.
Left unsaid, and this is the interesting part, is what Johnson is getting in return for her cooperation.
Far be it from me to point out the stupidity in not assisting the DOJ with a criminal investigation, but I’d be willing to be the house on Johnson’s lawyers pushing for some sort of deal.
Even if it’s just acknowledgement by a Judge that she willingly cooperated when the time comes.
Unfortunately due to the confidential nature of the DOJ’s investigation, and any deal between Johnson and DOJ falling outside of the scope of the SEC’s case, for now we have no idea what deal, if any, might have been cut.
At the time of publication whether the motion has been granted is unclear, but I don’t see why it wouldn’t be.
Meanwhile the reason we don’t know if the Motion was granted for sure, is due to a Motion to Seal filed alongside the Joint Motion requesting a one-time relax on the preliminary injunction.
Because of the nature of the proceedings referenced in the parties Joint Motion for Authority, the parties’ interests, as well as that of other entities not party to the motion, at this time substantially outweighs the public’s interest in open proceedings.
If not sealed, it is possible that the relief sought by the parties’ Joint Motion could be stymied by adverse interests.
Adverse interests? From who?
Achieve’s investors don’t have access to the iPayDNA account. And the general public? What are we gunna do…
The next paragraph in the Motion to Seal reveals who the DOJ are worried will potentially interfere with their Johnson deal.
Defendant Kristine Johnson and the SEC respectfully request that the Joint Motion and any subsequent order be restricted only to the filing parties – Defendant Johnson and the SEC – and the Court.
Specifically, the parties request that Defendants Troy Barnes and Work With Troy Barnes, Inc., not have access.
Wow, so Barnes is blackballed in the criminal case. I wonder why that is?
One reason is that DOJ might just be being overly cautious, given that Barnes vowed to Achieve affiliates that he would do everything possible to get them their money back.
Another that springs to mind is that, unlike Kristi Johnson, Barnes might not be looking to cooperate with the DOJ in their investigation. If that’s the case, then he might very well go out of his way to disrupt the securing of this $800,000.
Whether Johnson alone has access to these funds isn’t clear. Barnes himself can’t move them (even if he has access to them), due to the same injunction prohibiting Johnson from doing so. But maybe that’s where the mention of “other entities not party to the motion” might come into play.
Who those parties are I have no idea, but reading between the lines suggests that the DOJ, the $800,000 in Hong Kong, Kristi Johnson and Troy Barnes aren’t the only factors in play.
What with the motion likely being sealed, we’ll have to wait and see how this all plays out.
One thing is for sure though, when the DOJ get around to filing their criminal case it’s bound to be one hell of a read.