ASPEN — They packed the courtroom. Employees of Aspen Skiing Co. City leaders. Friends of Derek Johnson. His wife and their oldest son.
They heard details of Johnson’s crime spanning 12 years, during which he stole more than 13,000 pairs of skis worth more than $6 million from his employer, Aspen Skiing Co., and sold them online for more than $3 million.
They heard Johnson described as a man with two faces.
One side was the father, the Aspen city councilman, the football coach and the entrepreneur who helped Skico grow a store he co-founded to 20 locations from five. The other, a highly compensated boss who bullied his employees, owned a plane and took gambling trips to Las Vegas, but lived in publicly subsidized housing at the base of Aspen ski area.
Then they heard Johnson admit his guilt, apologize for the thefts and ask for forgiveness.
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Johnson spent a dozen years methodically stealing from his company, even ordering extra rental and retail skis so he could sell them as new on eBay, making $458,819 in 2017 alone.
“Over time, I am hopeful I will not be remembered for my falling down, but rather how I got back up and (was) looked upon as someone who has atoned for his sins,” Johnson said.
But Pitkin County District Judge Christopher Seldin was not buying his penance, saying Johnson’s crimes “dwarfed” recent Roaring Fork Valley cases involving fraud and embezzlement. He sentenced Johnson to six years in state prison. No probation.
Johnson’s wife, Kerri, dabbed her eyes and clutched her son’s hand as the sentence settled on the courtroom.
“That is not what I expected,” she said to a friend seated behind her. Kerri, who did the books for the eBay account, in December pleaded guilty to felony theft and will be sentenced next month. “What happens now?”
Seldin imposed the lower end of the four- to 12-year prison term recommended in a pre-sentencing report after Johnson pleaded guilty in November to felony theft between $100,000 and $1 million. He also will pay $250,000 in restitution.
The 9th Judicial District Probation Office recommended probation, but the judge dismissed that. Noting the “deliberate nature” of Johnson’s crime, which in 2017 alone resulted in $1,250 a day in sales on eBay, Seldin said probation would “unduly depreciate the nature of the crime.”
Lawyers say Derek Johnson bullied his employees, which allowed him to conceal his theft
The case of the Johnsons — perhaps the world’s most prolific ski thieves — has captivated Aspen since the details of their crimes emerged in December 2018. Everyone knows Derek Johnson.
He served four years on the city council and ran for mayor in 2013. He spent years coaching local football teams. He opened the D&E Snowboard shop in Aspen years before snowboarders were welcome on Aspen Mountain. He sold the store to Skico in a deal that set him up as head of the company’s retail and rental operations, a job that paid him close to $120,000 a year.
Last week, The Aspen Times published excerpts of letters sent to the court by dozens of Johnson’s friends begging for leniency and from many Skico employees and executives asking that their former colleague be punished with jail time.
David Clark, the company’s vice president and general counsel, read a lengthy statement to open Tuesday’s sentencing hearing, saying probation for one of the largest and longest cons in the history of Aspen would be “not just inappropriate, but an outrage.”
Clark warned the court to be wary of any expressions of remorse, noting that members of Johnson’s team in the rental and retail division “have repeatedly called him a master manipulator, a bully and worse.”
“He lies to get what he wants,” said Clark, who described Johnson’s suggestion that his wife, who did the books for the eBay account, was unaware the skis were stolen as “implausible, at best.”
Aspen Ski Co. CEO Mike Kaplan, in a letter to the court published last week by The Aspen Times, said the impacts of Johnson’s thefts were plentiful and sustained. The retail and rental department missed budget goals every year from 2006 to 2018, meaning Johnson’s employees received smaller bonuses, smaller raises and fewer promotions.
Kaplan said Johnson purposely ordered extra skis he could sell later in the season and “cultivated a culture of fear and intimidation,” so employees were afraid to question his purchasing and personal control of company skis.
(The court has since sealed the letters, making them unavailable for public examination.)
Seldin homed in on the allegation that Johnson purposely increased orders so he could have a larger supply of unused skis to sell online after the season, asking Clark for details.
Clark gave specifics about Johnson ordering more skis than the company needed. In 2017, the company said it needed 175 pairs of premium skis it gives to tour operators, VIPs and high-profile guests during their visits. Johnson told the ski company’s buyer to order 600 pairs of skis.
“What is the company’s degree of confidence in the alleged disparity between the actual demand within the business for the inventory and the amount of inventory that was actually ordered?” Seldin asked.
“I would say we are very confident,” said Clark, asking for a moment to share the personal impact of Johnson’s crime with a long sigh. “When I took this job almost 14 years ago I never dreamed I would be standing before this court and asking the court or deliver a prison sentence for a person I once considered a friend.”
Kaplan, in his letter, said Johnson also thwarted efforts to install inventory controls and technology that could hinder his racket. “This deception was methodical, intentional and remains unfathomable to me.”
Deputy District Attorney Don Nottingham said a review of eBay sales records revealed that between 2005 and 2017 Johnson sold 3,800 pairs of skis he listed as new, further supporting the accusation that Johnson boosted order numbers to offer more and higher quality skis for sale. Nottingham said the Johnsons cleared $1.3 million selling new pairs of skis alone over his 12-year racket.
The couple even rented a small warehouse space in Aspen to store the pilfered skis.
Seldin asked Johnson about ordering more skis so he could sell them later.
Johnson said every ski he ordered and sold “had gone through its useful life.” But in low-snow years, when skier visits dipped, some skis were never used. He admitted selling them online. Those skis, he said, were ordered as a “back-up and a buffer.”
“There was never an intent to over order,” he told Seldin, describing “inconsistencies” in Nottingham’s account of the sales.
Johnson and his friend Eric Bergstrom founded the D&E Snowboard Shop in Aspen in the early 1990s, several years before the local mountain even allowed snowboarding. They sold the retail and rental business to Skico in 2001 and Johnson stayed on as managing director to handle the operations. In 2002, Johnson and the ski company agreed to sell used rental equipment online, but that deal ended in 2005 when Johnson told the company it was no longer worth his time.
The average transaction on the eBay account in 2005 was $52 to $75 and Johnson sold less than $30,000 worth of skis, Nottingham said. In 2007, sales reached $100,000. In 2011, $240,000. In 2017, $458,819.
All told between 2006 and 2018, Nottingham said, Johnson and his wife sold more than 13,000 pairs of skis the company valued at $6 million and made an average of $230,000 a year. They made the median income in Pitkin County — $68,000 a year — every eight weeks without paying taxes, said Nottingham, who asked the court for a 10-year sentence.
“And their cost of goods was zero,” said Nottingham, noting Johnson’s salary from Skico placed him in the top 1% of the company and top 10% in the country. “This is not a moment-of-weakness case. This is a person who made a good living and chose to steal millions of dollars on top of that. He chose crime. He chose theft.”
Seldin began his deliberation by thanking the people in the packed courtroom who came to witness the sentencing. But he dismissed the idea floated by Clark and Nottingham that Johnson’s character flaws would inform his sentence.
“Adjudicating your character is not my primary focus,” he said.
Seldin said he would impose a sentence based on standards and cases that had preceded Johnson’s:
Like Shannon Nagle. In 2018, Seldin in 2018 sentenced her to jail and six years’ probation after she admitted to stealing $663,000 from an Aspen women’s clinic where she worked as office manager. Nagle was suffering from a medical condition and had sold her home before sentencing to begin paying restitution, Seldin said.
Or Angela Callen, the former director of Aspen’s Red Brick Center for the Arts who was sentenced last year to probation and jail time after pleading guilty to embezzling $125,000 from the city-owned community arts center. Callen, like Nagle, had begun paying restitution before her sentencing, Seldin said.
Or Robin McMillan, who admitted to stealing more than $440,000 in public money while she worked at the Garfield County Clerk and Recorder’s Office. She was sentenced to nine years in prison in 2016 after investigators found she had hidden $56,000 from the court.
“This is an incredibly serious offense. It dwarfs the scale and intensity of any cases I have mentioned before,” Seldin said.
What really stands out though, Seldin said, is that Johnson ordered more gear than the company needed so he could sell it.
“We don’t have cases like this come along very often where we have this much money at issue. If you engage in this behavior over such a period of time and such monumental amounts, you should expect to go to prison,” Seldin said before handing down the six-year sentence.
“The community is watching what the court is going to do in this case. We promote respect for the law in a case like this by showing that this type of conduct is not acceptable and the effective deterrent is a sentence to the Department of Corrections.”
Outside the courtroom, few wanted to speak on the record. The Skico employees and executives hugged each other. They looked somber. They were not celebrating. One man who worked for years in Skico’s retail warehouse said he often marveled at the sheer number of rental skis that Johnson ordered and stored.
“He had it good and it wasn’t enough. He was arrogant and greedy,” he said. “First, he was arrogant and then he got greedy.”
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