Wednesday, June 8, 2011

Just where did the disgraced ADA get all that moolah he used for “major” purchases? By Leslie Turk

At ex-Assistant District Attorney J. Floyd Johnson’s sentencing on a single count of tax evasion last week, nobody would ­— or could — explain the obvious. Sure, there were numerous references by both U.S. Attorney Stephanie Finley and IRS criminal investigative agent Kristie LeBeau to the former state prosecutor’s lavish lifestyle that involved major cash purchases. But not once did either answer the question I — for one — am dying to know.

RE.1

Wednesday, June 8, 2011

Just where did the disgraced ADA get all that moolah he used for “major” purchases? By Leslie Turk

At ex-Assistant District Attorney J. Floyd Johnson’s sentencing on a single count of tax evasion last week, nobody would ­— or could — explain the obvious. Sure, there were numerous references by both U.S. Attorney Stephanie Finley and IRS criminal investigative agent Kristie LeBeau to the former state prosecutor’s lavish lifestyle that involved major cash purchases. But not once did either answer the question I — for one — am dying to know.

Where does a full-time ADA who is the lead prosecutor in felony drug cases get all this cash money — for “major” purchases, according to Finley, including at least two high-end automobiles? At times, testimony indicated, cash was also deposited into Johnson’s client trust account. Even U.S. District Judge Richard Haik didn’t pose the question in sentencing Johnson to 18 months in prison for a single count of tax evasion. The serial tax evader didn’t pay $85,000 in federal income tax for 2003, having earned $71,536 that year from the DA’s office and taking in $187,835 in self-employment income. The ex-prosecutor will also serve three years supervised probation upon release from prison and must pay the IRS roughly $180,000 in restitution.

His attorneys say they will appeal.

Haik seemed perplexed that the U.S. attorney and LeBeau, the lone witness called for the prosecution, were making such a big deal about Johnson’s use of cash, wondering aloud why that would be improper. Didn’t Haik want to know where Johnson got all that dough?

Of course, there’s nothing wrong with paying in cash — if it’s income you’ve reported and paid taxes on it. But that’s not likely the case with Johnson, who didn’t even file tax returns from 2003 to 2008.

The Independent broke the story on Johnson’s IRS troubles in February 2010; at the time sources told us that the investigation was not triggered by a tax-related matter but rather by law enforcement officials’ complaints about Johnson’s record on drug prosecutions, including drug cases he chose not to prosecute and his decisions to reduce charges.

After sentencing, Finley remained tight-lipped. “How much cash are we talking about ... we know it’s tens of thousands because of the automobiles, but hundreds of thousands of dollars?” I asked. “A significant amount of cash was involved,” Finley said.

“We’re not going to comment on that,” Finley remarked about whether the inquiry began as something other than a tax evasion case. What she did confirm is that the investigation of Johnson was initiated in 2005 (it ended up stretching back to 1993, the year for which FBI agents discovered the IRS had put a $49,000 tax lien on Johnson). The IRS’ LeBeau, however, testified that her office got involved about late 2007.

Along with his position as a full-time ADA, an approximately $83,000 job for which taxes were deducted, Johnson also had a private law practice, according to court records. But a number of local attorneys familiar with Johnson’s work as an ADA say they were unaware he even had a private practice.

Johnson’s settlements from insurance companies for his clients prompted the submission of a 1099 form to the IRS; court testimony revealed that all legal settlements had been accounted for via this IRS documentation with the exception of a $175,000 settlement in 2007. At some point, Johnson also accepted a Corvette as payment for legal services, though he initially lied to investigators, saying he was only using the car and that it was going to be donated to a church, according to court testimony.

For the web of lies he told and schemes he concocted to evade taxes, Floyd Johnson’s career is over. He will likely never practice law again, and won’t be able to vote or possess a firearm.

And we’ll probably never know where he got all that green stuff. But I’m willing to bet federal investigators do.

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