PurchasePro founder Junior Johnson accused of hiding money in casino, not repaying millions

Charles Johnson, Jr., founder of PurchasePro, shown on the strip in Las Vegas on Aug. 21, 2000.
Charles Johnson, Jr., founder of PurchasePro, shown on the strip in Las Vegas on Aug. 21, 2000. LEXINGTON HERALD-LEADER STAFF FILE PHOTO

A Lexington native and former billionaire CEO who was convicted in 2008 on charges of fraud is accused of hiding money in a Las Vegas casino while not paying the millions he owes in restitution, according to federal court records.

Charles “Junior” Johnson is known for founding PurchasePro, a multimillion-dollar corporation that sold software that allowed companies to purchase products online from each other. The company formed in October of 1996 and filed for Chapter 11 bankruptcy in 2002. Johnson was found guilty of leading a 2001 plan to falsely inflate the revenue of PurchasePro.

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After his conviction in 2008, Johnson was sentenced to nine years in prison and three years of supervised release, according to court records. Additionally, he was ordered to pay back $9.7 million in restitution.

He began supervised release in April 2016 shortly after being released from prison, according to court records.

While almost none of the restitution has been paid, Johnson’s supervising probation officer has accused him of improperly transferring money into an account at Wynn Casino in Las Vegas and failing to disclose the money in the account. He’s also accused of failing to make his gambling losses known to his probation officer, according to court records.

Johnson’s probation officer made the accusation a little more than a week before his supervised release was set to end on April 7, according to court records. As a result, Johnson may have his supervised release revoked.

Wynn Casino, part of the Wynn Resorts corporation, was co-founded by Las Vegas’ Steve Wynn. It’s previously been reported that Wynn and Johnson became friends during Johnson’s time in Las Vegas. Steve Wynn has since been accused of sexual misconduct and eventually stepped down as CEO of Wynn Resorts and sold his stake in the resort company, according to CNBC.

Before the company crumbled, Johnson and PurchasePro were held in high esteem in his native Lexington. The former University of Cincinnati basketball player once donated $2 million for a new gym at Lexington Catholic High School. He led Lafayette High School to the state basketball championship in 1979.

People who invested in PurchasePro in the beginning and later sold their shares after the company went public made millions. But people who held on to their investments in the company until it filed for bankruptcy lost millions.

Johnson himself had shares worth up to $1.2 billion at one point. His life in Las Vegas included a mansion with an elevator and a swimming pool.

When Johnson was convicted of fraud, he also was found guilty of witness tampering and obstruction of justice, a charge stemming from an attempt to put fake emails into evidence for his first trial. The first trial ended in a mistrial when Johnson’s attorneys found out about the attempt and left the case.

A final hearing regarding Johnson’s revocation of supervised release is set for June 27.