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Department of Justice
U.S. Attorney’s Office
Eastern District of California

Thursday, May 23, 2019

Sacramento Area Attorney Indicted for Filing False Tax Returns

SACRAMENTO, Calif. — A federal grand jury returned an indictment today against Scott Norris Johnson, 57, of Carmichael, charging him with three counts of making and subscribing a false tax return, U.S. Attorney McGregor W. Scott and Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division announced.

According to the indictment, Johnson owned and operated Disabled Access Prevents Injury Inc. (DAPI), a legal services corporation. First using DAPI, and later using a law firm, Johnson filed thousands of lawsuits in the Eastern District of California and elsewhere. Johnson named himself as the plaintiff in the lawsuits and made claims under the Americans with Disabilities Act of 1990, the California Disabled Persons Act, and the California Unruh Civil Rights Act.

Under the Small Business Job Protection Act of 1996, payments related to lawsuit settlements or awards are taxable unless they were paid on account of personal physical injury or physical sickness. Johnson, however, allegedly materially underreported the taxable income he received from lawsuit settlements and awards on his income tax returns for tax years 2012, 2013, and 2014. By understating his income on his tax returns, Johnson and DAPI paid little to no income tax for tax years 2012, 2013 and 2014.

This case is the product of an investigation by the Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Katherine T. Lydon and Trial Attorney Tim Russo of the Tax Division are prosecuting the case.

If convicted, Johnson faces a maximum statutory penalty of three years in prison and a $250,000 fine for each count. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

Financial Fraud
Press Release Number: 
Updated May 24, 2019