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Jury returns guilty verdicts in Indy Land Bank case

March 19, 2015

A federal jury on Wednesday evening returned guilty verdicts on eight felony counts including wire fraud and bribery against Reggie Walton, a former Indianapolis city employee who managed the Indy Land Bank.

The jury found co-defendant David Johnson guilty on five counts including wire fraud and conspiracy to commit money laundering.

Walton was acquitted of a ninth charge, and Johnson was acquitted of a sixth.

The rulings capped off a multi-year federal probe of corruption tied to the city's land bank, which manages the disposition of tax-delinquent, abandoned properties.

Federal prosecutors charged five men, including two city employees who used their government positions to transfer promising properties in exchange for cash kickbacks. The other three co-defendants agreed to plea deals before trial.

"It's a strong message that public servants need to serve the public and not themselves," said acting U.S. Attorney Josh Minkler, who applauded the work of a joint public corruption task force with the FBI and Indiana State Police.

The government likely will ask U.S. District Judge William T. Lawrence to sentence Walton and Johnson to about 10 years in prison apiece. The judge agreed to release both men Wednesday evening, pending sentencing, after their attorneys argued they are not a flight risk.

Walton's attorney, Michael Donahoe, noted Walton has no criminal record and is providing for a young son and wife who's expecting another child.

"I'm disappointed in the verdict, obviously," Donahoe said after the judge and jury of eight men and four women departed.

The jury got the case shortly before 4 p.m. Tuesday, but did most of their deliberations on Wednesday, reaching a verdict around 6 p.m.

After the trial began March 3, the government spent about eight days making its case. Walton, the lone defense witness, took the stand Monday and wound up on the defensive.

Donahoe acknowledged his client used "very poor judgment" and also "did a pretty good job concealing" his involvement in private real estate partnerships during his tenure leading the Indy Land Bank. But Donahoe said those missteps did not amount to a crime.

Much of the federal government's case relied on Walton's own words as he discussed business moves with his partners in the alleged fraud in phone calls the government was secretly monitoring, and in conversations between Walton and an undercover FBI agent wearing a wire and posing as an out-of-state businessman.

The undercover FBI agent at one point gave $500 to Walton, which led to a bribery charge. But Donahoe noted Walton never asked for the money and intended only to apply it to a future partnership deal. The jury apparently agreed, finding Walton not-guilty on that particular charge.

Walton was facing five counts of wire fraud, three counts of bribery and one count of conspiracy to commit money laundering for allegedly using his government position for personal gain. Johnson faced five counts of wire fraud and one count of conspiracy to commit money laundering.

Three other co-defendants reached deals with prosecutors, and two of those men testified during the trial.
 

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