Derek Johnson sentenced to 6 years in prison for stealing, selling 13,000 pairs of skis from Aspen Skiing Co.
The Aspen Times
Former Aspen Skiing Co. executive and city Councilman Derek Johnson was sentenced to six years in prison Tuesday for methodically stealing and selling more than 13,000 pairs of company-owned skis worth nearly $6 million over more than 12 years.
“The scale and consistency of the theft dwarfs prior (theft) cases that have come before the court,” District Judge Chris Seldin said. “The scale and the amount of theft is enough to justify a Department of Corrections sentence. This is an incredibly serious offense.”
Johnson, 52, was not taken directly to jail after the sentencing. Seldin allowed him to remain with his wife and three children until Monday at 7 p.m., when he will have to surrender to deputies at the Pitkin County Jail. He will likely be transported to an unspecified state prison within two or three days after that.
In a statement to the court, Johnson, whose wife and oldest son attended Tuesday’s hearing, told Seldin he was the only one responsible for the theft, and apologized to his family, his former Skico colleagues, the community in general and Skico’s guests for his actions.
“I take full and sole responsibility for the crime I have committed,” Johnson said. “I never intended to hurt anybody. … I’m deeply sorry and remorseful and ashamed of my actions.”
He said he will continue to apologize to “all that I have wronged.”
“I will start over to rebuild my life with my family,” Johnson said. “I will continue to give back to this community if allowed.”
No one else spoke Tuesday in court for Johnson, though 29 members of the community, including friends, neighbors and elected officials, wrote letters to the court urging leniency.
Johnson, who served one term on the Aspen City Council and ran for mayor in 2013, pleaded guilty in November to one count of felony theft between $100,000 and $1 million and faced between four and 12 years in prison under terms of a plea deal with the District Attorney’s Office. His wife, Kerri, 48, also pleaded guilty to one count of felony theft in connection with the scheme to sell stolen skis on eBay, though prosecutors agreed not to ask for prison when she is sentenced next month.
The couple will have to pay back $250,000 to Skico under terms of the plea deal. That amount is the insurance deductible Skico had to pay for the insurance claim they submitted because of Johnson’s actions, said Pamela Mackey, his Denver-based attorney. A Skico spokesperson previously said the number had no significance.
David Clark, Skico vice president and associate general counsel, on Tuesday cast doubt in court on Johnson’s sole responsibility claim, pointing out that his wife was the bookkeeper for their long-running eBay business.
“What did she think the deal was?” Clark asked rhetorically. “That Derek could take what he wanted for free?”
In addition to Johnson’s family, numerous supporters sat in the pews behind him, while many others, including some Skico officials but not CEO Mike Kaplan, filled the pews on the other side of the aisle behind Deputy District Attorney Don Nottingham.
In letters submitted to the court last week, Kaplan and a company senior executive, who asked that his name not appear in the newspaper because the District Attorney’s Office said his statement wouldn’t be made public, detailed how Johnson’s scheme worked.
It began not long after Johnson sold Skico the Aspen snowboard shop he co-founded and the company made him an executive in their rental/retail division in the early 2000s. Johnson and Skico started a side business together at that time to sell salvage or used skis on eBay and split the proceeds, Kaplan said.
But after “a couple years,” the profits were “very small” and they mutually agreed to discontinue the partnership, he said.
Johnson, however, did not stop, and “very significantly” not only continued to sell salvage skis, but also began ordering two to three times more demo skis than the company needed, thereby drumming up the inventory he would later advertise and sell on eBay, according to the letters.
Clark said Tuesday that after Skico bought those skis, Johnson could sell them for whatever he wanted and reap nothing but pure profit without any taxes levied. Asked by Seldin how certain Skico officials were of Johnson ordering more skis than were needed to pad his own personal inventory, Clark said, “I would say we’re very confident.”
Johnson’s theft was equivalent to stealing two pairs of skis per day, every day for 12 years, the senior executive said in his letter. That equates to 8,760 pairs of skis stolen from the ski company, sold on eBay and often shipped in boxes that were paid for by Skico.
But according to eBay records, the 8,760 pairs of skis are not even close to the actual number the couple sold, Nottingham said.
In fact, Johnson and his wife peddled more than 13,000 pairs of skis between 2006 and November 2018, when they were caught, Nottingham said. That number includes at least 3,800 new pairs of skis, and equates to nearly three pairs of skis stolen from his employer and sold every day for 12 years, Nottingham said.
The numbers do not include the Skico-sanctioned sales, which allegedly took place between 2002 and 2005, Nottingham said.
When the ski company was involved in the operation in the early years, for example, Nottingham said the Johnsons and Skico made between $52 and $71 per sale between 2002 and 2005. But between 2007 and 2018, the Johnsons alone made between $197 and $317 per sale, he said.
Sales went from $30,000 in 2005 to $100,000 in 2007 to $247,000 in 2011, he said.
In 2017 — the last full year of their scheme — the Johnsons sold 1,950 pairs of skis and made nearly $459,000. That equates to more than five pairs of skis stolen and sold per day, and $1,250 per day in profit, Nottingham said.
The median income in Pitkin County is $68,000 per year, meaning the couple raked in that amount every eight weeks tax-free, he said.
In addition, Johnson was one of the highest paid Skico employees — he made $116,600 in 2017 — with a salary in the top 10% of wage earners in the U.S., Nottingham said.
“This was a massive theft operation,” he said.
Clark said Johnson was able to get away with the scheme for so long for one reason.
“The answer is simple,” he said. “We trusted Derek Johnson.”
Johnson said Tuesday that every pair of skis he ordered and sold “had gone through its useful life” and that the large amount of skis sold after the winter of 2016-2017 was because it was a low-snow year and many skis went unused.
“It was never my intent to over order and I felt it was always in line with the revenues, which were always growing,” Johnson said.
Finally, Nottingham noted that Johnson did not have mental health or substance-abuse issues or social barriers to overcome, which often can push people toward crime.
“This defendant had none of that,” he said. “There was nothing that would keep him from being a law-abiding citizen.
“Instead he chose crime. He chose theft.”
Johnson’s theft meant that Skico employees, who worked under him and often were paid under performance-based incentives, received lower wages, lower bonuses, less 401k contributions and fewer promotions, according to Kaplan’s letter.
“Derek was therefore effectively stealing from his own employees and coworkers,” Kaplan wrote. “This deception was methodical, intentional and remains unfathomable to me.”
Finally, Johnson “cultivated a culture of fear and intimidation within his department,” Kaplan said, and was found to be a “calculating bully,” according to the senior executive’s letter.
On Tuesday, Johnson said the bullying allegations “have rocked me to my core.” He said he tried to support and listen to his employees and that it was hard to hear “that some felt different, and I need to own that as well.”
Kaplan asked in his letter that Johnson be sentenced to “at least the middle range of the sentencing recommendation.” On Tuesday, Clark said Skico officials had heard that the state’s Probation Department would recommend that Johnson serve only six months in the Pitkin County Jail, some of it on work release, as well as a long probation sentence.
That recommendation, which was indeed the Probation Department’s suggestion, is not only “inappropriate, but an outrage,” Clark said. “How can it possibly be a crime deserving of just probation?
“Kids and parents will be watching across the valley (to see what the sentence is).”
Nottingham said that the probation recommendation trades six months in jail for $3 million, a deal many in the Roaring Fork Valley would likely take “in a heartbeat.”
“That is not a deterrent to steal, but an incentive,” he said. “The sentence handed down today will reverberate around the valley.”
Seldin said he understood that fact, and that despite imposing probation for two recent theft/embezzlement cases involving large amounts of money, Johnson’s actions were more serious and deserved prison.
“The community is watching what the court is going to do,” Seldin said. “(A prison sentence) promotes respect for the law by showing that kind of conduct is unacceptable.”
Johnson is unlikely to serve the entire six years in prison. With good behavior, he could be released in two-and-a-half to three years, Nottingham said.
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