Posted by Daniel Layton on 06/03/2019. An indictment is merely a charging document and a defendant who is indicted is presumed innocent until proven guilty. The statements in a charging document such as an indictment are allegations and are not proven facts. The text of the indictment is below.
********
McGREGOR W. SCOTT
United States Attorney
KATHERINE T. LYDON
Assistant United States Attorney
501 I Street, Suite 10-100
Sacramento, CA 95814
Telephone: (916) 554-2700
Facsimile: (916) 554-2900
TIMOTHY M. RUSSO
Trial Attorney
Department of Justice, Tax Division
601 D Street NW
Washington, DC 20004
Telephone: (202) 514-2901
Facsimile: (202) 514-9623
Attorneys for Plaintiff
United States of America
FILED
MAY 23 2019
CLERK, U.S. DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
BY ________
DEPUTY CLERK
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
UNITED STATES OF AMERICA,
Plaintiff
V.
SCOTT NORRIS JOHNSON,
Defendant
CASE NO. 2: 1 9 – CR – 0 0 8 8 JAM
26 U.S.C. § 7206(1) Making and Subscribing a
False Tax Return (3 Counts)
INDICTMENT
COUNT ONE: [26 U.S.C. § 7206(1) Making and Subscribing a False Tax Return]
The Grand Jury charges:
SCOTT NORRIS JOHNSON,
defendant herein, as follows:
GENERAL ALLEGATIONS
1. At all times material to this indictment, the defendant, SCOTT NORRIS JOHNSON, resided in Carmichael, California, in the State and Eastern District of California.
2. The Internal Revenue Service (“IRS”) was an agency of the United States Department of the Treasury responsible for administering the tax laws of the United States.
3. A Form 1040, U.S. Individual Income Tax Return, was the standard federal income tax form used to report an individual’s income to the IRS.
4. A Form 1120, U.S. Corporation Income Tax Return, was a standard federal income tax form used to report a corporation’s income to the IRS.
5. From no later than on or about January 28, 2008, SCOTT NORRIS JOHNSON owned and operated Disabled Access Prevents Injury, Inc. (“DAPI”), a corporation registered in the State of California. DAPI was treated as a C corporation for tax purposes. SCOTT NORRIS JOHNSON was DAPI’s sole shareholder.
6. DAPI provided legal services associated with lawsuits that it filed on behalf of SCOTT NORRIS JOHNSON as the plaintiff.
7. Starting no later than in or about February 2013, SCOTT NORRIS JOHNSON retained Law Firm A to represent him as a plaintiff in lawsuits.
8. The lawsuits filed by DAPI and Law Firm A on behalf of SCOTT NORRIS JOHNSON made claims under the Americans with Disabilities Act of 1990, the California Disabled Persons Act, and the California Unruh Civil Rights Act.
9. SCOTT NORRIS JOHNSON was a plaintiff in thousands of lawsuits filed in the Eastern District of California and elsewhere.
10. Pursuant to the Small Business Job Protection of 1996, payments related to lawsuit settlements or awards were taxable unless they were paid on account of personal physical injury or physical sickness.
11. SCOTT NORRIS JOHNSON reported income related to his lawsuits as “Other Income” on Line 21 and as part of his “Total Income” on Line 22 of his personal Forms 1040 as set forth below:
Tax Year / Other Income / Total Income
2012 / $24,000 / $36,369
2013 / $1,500 / $1,561
2014 / $64,000 / $97,498
12. SCOTT NORRIS JOHNSON reported receiving Social Security benefits totaling $38,123 in 2012, $38,771 in 2013 and $39,359 in 2014 on his personal Forms 1040.
13. SCOTT NORRIS JOHNSON reported Gross Receipts or Sales on DAPI’s Forms 1120 for tax years 2012 through 2014 as set forth below:
Tax Year / Gross Receipts or Sales (Line la)
2012 / $310,000
2013 / $47,500
2014 / $75,315
14. In truth and in fact, during tax years 2012, 2013 and 2014, SCOTT NORRIS JOHNSON received taxable income from his lawsuits that exceeded the combined amounts that he reported on his Forms 1040 and DAPI’s Forms 1120 for each of those years.
15. As a result of understating his income on his tax returns, SCOTT NORRIS JOHNSON paid little to no income tax for tax years 2012, 2013 and 2014. Total income taxes paid by SCOTT NORRIS JOHNSON and DAPI are set forth below:
Tax Year / Income Tax Paid by JOHNSON / Income Tax Paid by DAPI
2012 / $3,559 / $5,427
2013 / $0 / $0
2014 / $17,688 / $0
FALSE SUBSCRIBING
On or about April 15, 2013, in the Eastern District of California and elsewhere, SCOTT NORRIS JOHNSON did willfully make and subscribe a false 2012 U.S. Individual Income Tax Return, Form 1040, which was filed with the Internal Revenue Service and was verified by a written declaration that it was made under the penalties of perjury, and which he did not believe to be true and correct as to every material matter, in that he knew he received more taxable income than he reported as Other Income on Line 21 and Total Income on Line 22, all in violation of Title 26, United States Code, Section 7206(1).
COUNT TWO: [26 U.S.C. § 7206(1) Making and Subscribing a False Tax Return]
The Grand Jury further charges:
SCOTT NORRIS JOHNSON,
defendant herein, as follows:
1. Paragraphs 1 through 15 of Count 1 are reincorporated as if fully set forth herein.
2. On or about April 14, 2014, in the Eastern District of California and elsewhere, SCOTT NORRIS JOHNSON did willfully make and subscribe a false 2013 U.S. Individual Income Tax Return, Form 1040, which was filed with the Internal Revenue Service and was verified by a written declaration that it was made under the penalties of perjury, and which he did not believe to be true and correct as to every material matter, in that he knew he received more taxable income than he reported as Other Income on Line 21 and Total Income on Line 22, all in violation of Title 26, United States Code, Section 7206(1).
COUNT THREE: [26 U.S.C. § 7206(1) Making and Subscribing a False Tax Return]
The Grand Jury further charges:
SCOTT NORRIS JOHNSON,
defendant herein, as follows:
1. Paragraphs 1 through 15 of Count 1 are reincorporated as if fully set forth herein.
2. On or about September 15, 2015, in the Eastern District of California and elsewhere,SCOTT NORRIS JOHNSON did willfully make and subscribe a false 2014 U.S. Individual Income Tax Return, Form 1040, which was filed with the Internal Revenue Service and was verified by a written declaration that it was made under the penalties of perjury, and which he did not believe to be true and correct as to every material matter, in that he knew he received more taxable income than he reported as Other Income on Line 21 and Total Income on Line 22, all in violation of Title 26, United States Code, Section 7206(1).
A TRUE BILL.
/s/ Signature on file w/AUSA
FOREPERSON
McGREGOR W. SCOTT
United States Attorney