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Feds charge 5 in Indy Land Bank kickback scheme

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Federal prosecutors have charged two Indianapolis city employees in the Department of Metropolitan Development and three others in a scheme involving cash kickbacks on the sale of properties in the Indy Land Bank.

The indictment, which includes eight wire fraud and bribery counts, alleges city employees Reginald Walton, 29, the Land Bank's director, and John Hawkins, 27, a senior project manager for the DMD and a former special assistant to Mayor Greg Ballard, participated in the scheme.

Also charged: David Johnson, 46, executive director of the Indiana Minority AIDS Coalition; Randall Sargent, 57, owner and president of New Day Residential Development; and Aaron Reed, 35, a friend of Walton's.

The five defendants each face three wire fraud charges. Each charge carries a potential penalty of 20 years in prison and a $1 million fine.

Walton also is charged with three counts of bribery on an organization that receives federal funds, each of which could carry a maximum penalty of 10 years in prison and a $250,000 fine. Sargent and Reed are facing one count each of bribery.

The suspects made their first appearance in federal court midday Tuesday, where U.S. Magistrate Judge Denise K. LaRue read them the charges and explained their rights. The defendants were released pending trial.

U.S. Attorney Joe Hogsett is scheduled to discuss the charges at a 1:30 p.m. press conference.

FBI agents arrested the men and raided the City-County Building on Tuesday morning, as IBJ first reported. The IBJ is a sister publication of Indiana Lawyer. The moves were the culmination of a months-long federal investigation into alleged corrupt practices at the Indy Land Bank, a municipal agency that handles the disposition of vacant and tax-delinquent homes that fall into city hands.

State sales-disclosure records show Sargent's company bought at least 23 properties from the Land Bank since May 2012. The disclosures show a price of $1,000 apiece for 15 properties and $2,500 each for eight more.

New Day Residential lists its headquarters address as 238 S. Meridian St., Suite 201, above the Claddagh Irish Pub.

Walton was prominently featured in an IBJ investigative story in November 2012 that raised questions about the city's sale of taxpayer-owned properties to not-for-profit groups eager to exploit a loophole allowing low-priced sales without public bids.

Marc Lotter, a spokesman for Mayor Greg Ballard, declined to comment before the afternoon announcement.

An FBI tactical vehicle pulled up to the north entrance of the City-County Building shortly after 8 a.m. It remained there late Tuesday morning, as agents carried out boxes of documents from the Land Bank.

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  1. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  2. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  3. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

  4. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

  5. Seventh Circuit Court Judge Diane Wood has stated in “The Rule of Law in Times of Stress” (2003), “that neither laws nor the procedures used to create or implement them should be secret; and . . . the laws must not be arbitrary.” According to the American Bar Association, Wood’s quote drives home this point: The rule of law also requires that people can expect predictable results from the legal system; this is what Judge Wood implies when she says that “the laws must not be arbitrary.” Predictable results mean that people who act in the same way can expect the law to treat them in the same way. If similar actions do not produce similar legal outcomes, people cannot use the law to guide their actions, and a “rule of law” does not exist.

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