A prolific disability-rights plaintiffs lawyer was indicted by a federal grand jury Thursday on three counts of submitting false tax returns.
Scott N. Johnson, owner of Disabled Access Prevents Injury Inc. of Carmichael, a suburb of Sacramento, has filed thousands of lawsuits alleging California businesses were violating state and federal disability and civil rights laws.
Federal prosecutors under the leadership of U.S. Attorney McGregor Scott allege Johnson “materially underreported” taxable income he received from settlements and awards over a three-year period.
“By understating his income on his tax returns, Johnson and DAPI paid little to no income tax for tax years 2012, 2013 and 2014,” Scott’s office said in a press release. Assistant U.S. Attorney Katherine Lydon in Sacramento is assigned the prosecution, with Timothy Russo, a tax division trial attorney from the U.S. Justice Department in Washington.
Johnson’s attorney, Malcolm Segal of Segal and Associates in Sacramento, said in an email that the U.S. Internal Revenue Service “disputes how the relatively small financial settlements [Johnson] received in the process should have been treated for tax purposes, including those payments intended to compensate him for the injuries he suffered trying to gain access to the defendants’ businesses. He expects to meet this challenge in a courthouse with which he is quite familiar.”
Johnson is well-known among small businesses and defense attorneys in Northern California for suing establishments for alleged violations of the Americans with Disabilities Act. The paraplegic lawyer has often offered to settle his suits—brought in his name—for between $4,000 and $6,000, less than what it might cost most business owners to fight the claims in court.
Johnson’s supporters have said his litigation results in access rights for the disabled and businesses complying with laws that have been on the books for decades. His critics have accused him of targeting mom-and-pop shops over alleged minor violations and seeking quick payments instead of assurances that access changes are made.
Johnson is scheduled to appear for arraignment May 29 in the Sacramento federal courthouse. The charge of filing a false tax return carries a maximum penalty of up to three years in prison.