Aspen Skico: Former executive’s theft in selling skis was ‘methodical, unfathomable’
The Aspen Times
Former Aspen Skiing Co. executive Derek Johnson is a “calculating bully” who emotionally abused employees, reduced their wages and stunted their careers in a decade-and-a-half-long scheme to sell merchandise he stole from the company, which put the value at $6 million.
That’s according to several letters from Skico executives and employees, including CEO Mike Kaplan, filed Thursday in Pitkin County District Court ahead of Tuesday’s sentencing for the 52-year-old Johnson, who pleaded guilty in November to one count of felony theft between $100,000 and $1 million.
“This was no instance of isolated theft that might be explained away as a brief lapse in judgment,” Kaplan wrote on behalf of Skico and its employees in a two-page letter. “On the contrary, Derek engaged in an ongoing, intentional, coordinated effort to steal from Aspen Skiing Company.
“This deception was methodical, intentional and remains unfathomable to me.”
Johnson — who also served one term on Aspen City Council (2009 to ’13) and ran for mayor in 2013 — faces between four and 12 years in prison when he is sentenced Tuesday by District Judge Chris Seldin.
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His wife, Kerri Johnson, 48, pleaded guilty to felony theft in December as part of the scheme, and while prosecutors agreed not to ask for a prison sentence in her case, she will serve an unspecified probation sentence and possibly some time in the Pitkin County Jail. She is scheduled to be sentenced next month.
The couple, who have three children, also will have to pay back Skico $250,000 as part of the plea deal.
Police and prosecutors alleged that Johnson and his wife stole more than $2.4 million in skis, snowboards and other goods during his 17-year tenure as managing director of Skico’s rental/retail department. The sales were conducted through eBay, and included billing Skico for the boxes they used to send their customers the stolen skis.
However, according to the letters from Kaplan and other executives, that turns out to be the amount the couple made selling Skico property at cut-rate prices, not the value of the products or what Skico paid for them.
Kaplan wrote that the Johnsons stole nearly $6 million worth of goods and profited at least $2.4 million from the sale of these goods.
They did so with “an unlimited supply chain, zero acquisition costs and no proper taxes paid on a local, state or federal levels. … (The) sheer volume of skis alone is equivalent to stealing two pairs of skis per day, every day of every year for 12 consecutive years,” one Skico senior executive wrote to the judge.
By that accounting, the Johnsons stole at least 8,760 pairs of skis.
The Aspen Times is not naming all of the Skico employees who wrote letters because they said the District Attorney’s Office told them the letters would not be made public before the sentencing. The Times obtained the letters through a request with the court clerk’s office.
In a text message Friday, Johnson declined to comment on the Skico letters, though he pointed out that 25 people, including current and former Aspen-area elected officials, have filed letters with the District Court urging Seldin to be lenient on him at Tuesday’s sentencing.
“I have letters from the community on file with the court,” he texted. “Anxiously awaiting Tuesday.”
At his plea hearing in November, Seldin asked Johnson what he did that made him guilty of felony theft.
“I acquired some items without permission,” he said. “However, during sentencing I’m looking forward to explaining some of the circumstances surrounding that.”
After Seldin asked him if he knew his actions constituted theft, Johnson said, “Certainly not initially. But I made some poor choices and that is the case.”
Kaplan, in his letter, referenced those comments and said he felt it was necessary to clarify “the timeline of events, and dispel any notion that his ongoing actions were in any way condoned.”
HOW THE PLAN STARTED, WORKED
In the early 2000s — after Skico bought the D&E Snowboard Shop that Johnson co-founded and made him an executive — the company had an agreement with him to sell “salvage skis” on eBay and split the profits, according to Kaplan’s letter. The skis were “demo product … no longer considered rentable by our standards,” he said.
“In those years, the profits from this effort were very small,” Kaplan said. “After a couple years of the joint eBay experiment, Derek informed his then-supervisor that the effort was not worth his or the company’s time. Derek advised us that he was shutting the project down, and the company agreed to that.”
However, Johnson did not shut down the experiment; he super-charged it, and began stealing and selling the salvage skis and brand new demo equipment, Kaplan said.
“As managing director of the rental/retail department, he also began a practice of ordering far more demo skis than were needed, thereby creating the excess inventory for his illegal enterprise while simultaneously thwarting efforts to implement more robust inventory controls and technology,” Kaplan wrote.
In fact, Johnson instructed Skico’s buyer to purchase two to three times the number of demo skis that ASC required, according to a letter to Seldin from a Skico vice president who worked on the company’s brand and marketing efforts.
“Our buyer questioned this immediately because the numbers didn’t make sense,” the person wrote. “Derek lied to him and said it was approved by leadership at the company.”
Flooding the market with cut-rate skis affected local businesses, including ski shops and stores that sold used goods, as well as Skico’s rental and sales business, the Skico senior executive wrote to the judge. In addition, it has caused manufacturers to raise prices to Skico after the allegations against Johnson came to light.
“Reselling at drastically below-market rates also impacted our vendors — the hard goods manufacturers,” the executive wrote. “They were understandably angry and responded accordingly by escalating ASC costs to purchase as a direct result of Derek buying goods under false pretenses and breaking contracted purchase terms.”
‘STEALING’ FROM CO-WORKERS
But perhaps the largest impact of Johnson’s actions was on rank-and-file Skico employees, according to the letters.
The company has performance-based bonuses for all salaried and many hourly employees. But “due in part of Derek’s stealing, his department missed budget almost every year of his criminal activity,” Kaplan said.
“Given the incentive structures at Aspen Skiing Company, this meant his employees received smaller bonuses, smaller raises and fewer promotions,” he wrote. “Derek was therefore effectively stealing from his own employees and coworkers.”
Johnson’s actions also negatively affected employees’ 401k plans, Skico officials wrote.
“Derek’s self-serving actions altered people’s wages and reduced their ability to support their own families,” the senior executive said.
However, it was another discovery about Johnson’s treatment of Skico employees that rattled executives, according to their letters.
MENTAL ANGUISH SUFFERED BY EMPLOYEES
Several employees wrote letters to the judge detailing emotional abuse they allegedly suffered at Johnson’s hands. A company vice president wrote of numerous other employees who, sometimes tearfully, told of his allegedly abusive actions toward them.
Kaplan said Johnson “cultivated a culture of fear and intimidation within his department” that caused company officials to wonder “how we missed seeing that this sub-culture of intimidation existed within a company that I and over 90% of our employees are proud to work for.”
“I should add that whenever our ownership questioned the efficacy of Aspen Skiing Company’s rental/retail department, I personally defended Derek,” Kaplan said.
The Skico senior executive was “astounded” to hear of the “psychological power” Johnson wielded over employees that led to worries over reputations, professional livelihoods and mental stability.
“Realizing that someone you work with is a thief is very unsettling,” the executive wrote. “The discovery that surprised and distressed me the most, by far, during this process was comprehending what a calculating bully this man was in the eyes of those who relied on him most.”
The letter went on to say that “Simply put, you were either a follower and in his good graces or you were socially ostracized, administratively marginalized or professionally punished. His actions ruined some people’s careers, stunted the development of others and left an indelible mark on their character. …”
Finally, many wrote of the deep feelings of betrayal they have experienced since Johnson’s actions have come to light, and the fact that prison will remove him from his wife and three children.
“It pains me deeply to know that a father will be taken away from his children for a period of time,” Kaplan said. “This adds yet another layer of betrayal and trauma that Derek has imposed.
“But Derek did that. Not the Aspen Skiing Company, not his supervisors, not the court.”
Kaplan said Skico would like to see Johnson receive “at least the middle range of the sentencing recommendation, and we strongly request that he not be eligible for work release for a significant portion of that time so that he is forced to really reflect on what he’s done.”
Another wrote that after 15 years as his colleague, when Johnson’s actions surfaced he realized “that I really didn’t know this man at all.” He said he knows people in the community will write letters extolling Johnson’s positive attributes as a coach, father and person, but that those are not the issue at hand Tuesday.
“I’m sorry, but I don’t consider an admitted thief or liar as a stand-up guy or positive influence in any community,” the senior executive wrote to the judge. “This crime is the gift that keeps giving, and I mean this in the worst possible way.”
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