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City won't take back suspect properties sold by Land Bank

June 14, 2013

The city of Indianapolis won't try to take back properties that were sold by its Indy Land Bank to suspect not-for-profits or to Naptown Housing Group LLC, in which former land bank director Reggie Walton is alleged to be a silent partner.

An internal review found that in 2012 and 2013, the land bank sold 20 properties to the Indiana Minority AIDS Coalition and another 20 to New Day Residential Development, each of which saw their executives, David Johnson and Randall Sargent, indicted along with Walton on May 21. Department of Metropolitan Development employee John Hawkins and Aaron Reed of Naptown Housing also face federal charges.

U.S. Attorney Joe Hogsett alleges that Walton accepted bribes and kickbacks for funneling properties to the not-for-profits and to Reed. The city's review found that Naptown Housing was in the chain of title on eight properties sold by the land bank in 2012. A report on the probe released publicly Friday morning didn't identify the properties but said the information would be provided to federal authorities.

"Throughout the internal review process, we have been contacted by citizens who now live in homes they have acquired and rehabilitated through the land banking process," the report states. "We do not contemplate taking any action to recover title to real estate from an innocent purchaser for value, regardless of alleged fraudulent activity by a predecessor or an agent of a predecessor in the chain of title."

Thirteen of the properties the AIDS coalition acquired over the last year were sold to victims of convicted real estate fraudster Sheila Amos, the Department of Metropolitan Development review found. At least one of those victims, Joseph Satterfield, has said he was in the process of buying the home he occupied from the AIDS coalition when Johnson was indicted. City officials said they couldn't intervene in that transaction.

Mayor Greg Ballard's internal review dates back to October, when events mentioned in the federal indictment are alleged to have begun.

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