Federal Bureau of Investigation - Columbia Field Division - Department of Justice Press Release - Department of Justice Press Release

Columbia, South Carolina---- United States Attorney REGINALD I. LLOYD stated today that KARL “K.J.” JOHNSON, age 66, of Flemington, New Jersey, was convicted by a jury on June 19, 2007, of wire fraud. The case was presided over by District Judge G. Ross Anderson, Jr., who will sentence JOHNSON after the preparation of a Presentence Report. JOHNSON faces a possible sentence of up to 20 years in prison and/or a fine of up to $250,000.00. Judge Anderson took JOHNSON, who had been on bond, into custody upon the return of the verdict.

Mr. Lloyd stated that JOHNSON was charged as a result of Operation Magnolia Madness, an FBI undercover operation that targeted con men around the world who present bogus investments schemes to American investors. In this investigation, undercover operatives posing as wealthy investors contacted persons believed to be involved in these schemes and taped them pitching the bogus investments. Evidence at trial revealed that JOHNSON claimed to have access to a secret investment program through Wells Fargo Bank, overseen by the United States Treasury and the Federal Reserve. He further claimed that the investment would yield 280% returns annually with no risk. Witnesses from Wells Fargo, the Treasury and the Federal Reserve testified that this was all false.

The investigation of JOHNSON was led by Special Agent Paul Jacobs of the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney David C. Stephens of Greenville.

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NEW JERSEY MAN CONVICTED IN S.C. FBI UNDERCOVER OPERATION