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Prosecutors: Land Bank guilty verdicts should send clear message

INDIANAPOLIS (WISH) — Federal prosecutors said guilty verdicts for the final two suspects in the Indianapolis Land Bank case should send a clear message about their intention to crack down on public corruption.

A federal jury found Reggie Walton, 31, and David Johnson, 48, guilty on fraud and bribery charges after deliberations Wednesday that stretched into the night. Walton, the former director of the city’s Land Bank program, was convicted on eight felony counts of wire fraud and bribery. Johnson, the director of the Indianapolis Minority AIDS Coalition, was convicted on five felony counts of wire fraud and conspiracy to commit money laundering.

Both were also acquitted on one charge each.

Three other defendants, Aaron Reed, John Hawkins and Randall Sargent already agreed to plead guilty in exchange for reduced sentences. As part of their plea agreements, Reed and Hawkins testified against Walton and Johnson at trial.

All five suspects were accused of accepting bribes or giving kickbacks in exchange for steep discounts on city owned properties included in the Land Bank, according to court documents. The Land Bank is used to acquire vacant and tax-delinquent properties and sell them to both non-profit and for-profit real estate developers.

But, prosecutors say the defendants hatched a scheme to turn the program into a cash cow, by facilitating fraudulent property sales. All participated in the scheme, but it was led by Walton, U.S. Attorney Josh Minkler said Thursday.

“Over the last two weeks, we proved beyond a reasonable doubt in federal court that Mr. Walton put Indianapolis city government up for sale through a scheme involving power, secrecy and greed. That cannot be tolerated by law enforcement. That cannot be tolerated by anyone in a free society,” Minkler said.

The case involved nearly four years of work by investigators, and included hundreds of wire taps and conversations with an undercover FBI agent who posed as an out-of-state businessman. Prosecutors said that conversation resulted in a $500 kickback to Walton, which led them to file a bribery charge. Walton’s attorneys claimed in court that he intended to use that money for future property purchases. Jurors found him not guilty on that count.

Sentencing dates have not been set in any of the cases yet, but Assistant U.S. Attorney Brad Blackington said he will seek a sentence of 8-9 years in federal prison for Johnson and at least 10 years for Walton. Pre-sentence reports are expected to take about three months, so U.S. District Court Judge William Lawrence is likely to set a sentencing date this summer, he said.

“Public servants need to understand that they need to serve the public, not serve themselves,” Minkler added. “When they make a choice to serve themselves, they must face consequences.”

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