IRS and federal prosecutors have launched a criminal investigation into serial disability access plaintiff Scott Johnson, who has moved his lawsuit operation to the Bay Area in recent months, to determine whether he has paid taxes on his alleged millions of dollars in settlements, multiple sources told this newspaper.Unless a plaintiff suffered physical injuries as a result of a civil settlement, that individual must pay taxes on the monetary award, tax experts said. It is unclear whether Johnson paid any taxes on any of his Americans with Disabilities Act settlements with thousands of businesses in California that he alleged obstructed his access as a paralyzed customer using a wheelchair. He and his attorney did not return requests for comment.
In December 2015, attorney Catherine Corfee, who often represents small businesses sued by Johnson, said she received an email from a federal prosecutor that there was a criminal grand jury probe into Johnson's "treatment of settlement proceeds for ADA lawsuits."
The attorney recounted more than a decade opposing Johnson in court and how he would try to add physical injury wording to the settlements despite not alleging any such damages in the original complaint.
"I have refused to allow the words 'caused injury' to make sure he pays his taxes," Corfee said.
"I'm not going to participate in tax fraud," she said. "Not one of my cases did I ever need to request medical records. If you don't allege (physical injuries) in the lawsuit, then why settle for it?"
But, she said, other attorneys and defendants may not be as careful when finalizing their settlements.
However, last year, Johnson arrived in his van and asked the owner if he could buy a foot of hydraulic pipe. The owner did him a favor, Carter said, and was rewarded by Johnson suing him for not providing handicap parking, having a counter too high and a noncompliant door handle.
"We're not dealing with the public. He screwed up when dealing with this property," Carter said.
Ironically, Carter uses an electric scooter himself to move around because of a genetic back condition, and is acutely aware of access issues.
"If anybody is sensitive to being handicapped, it's me." ¹
