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Feds charge 5 in Indy Land Bank kickback scheme

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Federal prosecutors have charged two 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 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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  • Wow
    Are those links even legal?
  • More Info
    You can find more land bank material archived here... http://tinyurl.com/indylandbank
  • Link
    The link appears to have been hacked. Yesterday it gave emails with details and today it gives you the harlam shake??
    • Keep Digging
      Keep going Joe! Good work. If you keep going you find a lot of dirt with attorneys, architects, CIB and others connected to city government.
    • IndyLandBank Reggie Walton Scandal
      More information on the IndyLandBank Reggie Walton Scandal here: http://www.kubepharm.com/indylandbank/IndyLandBank.html
      • Right out of the I Love Lucy Show
        MAYOR, YOU HAVE SOME SPLAININ TO DO.
      • Morons
        These idiots were getting direction from someone/somewhere. Too stupid to do it themselves. Maybe support from Chicago politicians.
      • non profit
        Well I thought that these non profit organizations are allowed to buy these homes as long as they are revitalizing and rehabilitating them. In this article it mentions the non for profit organizations but it does not mention that they committed bribery. I only see reference to this Naptown Housing group which was a silent partner to this city official. Shouldn't it just be that party because from what I am hearing they are the ones that have committed the act. It does not say any evidence of Indiana Minority Aids Coalition or New Day Residential Services. So out of all the non profit groups that Mr. Walton has dealt with why are these 2 the only ones being sought out? Sounds like they are looking for somebody to take the fall for the corruption of our City i.e. Greg Ballard and his 2 cronies that were over this program. All the non-profit organizations need to be investigated as well. Something smells in this case and it is Ballard.
      • How They Did It...
        This is HOW they did it - http://www.kubepharm.com/Refs/indylandbank/Doris-Jones-Reggie-Walton.jpg
      • Reggie's Buddy
        DORIS WALKER JONES http://mortgagefraud.squarespace.com/journal/2004/10/26/indianapolis-woman-charged-in-mortgage-fraud-scheme.html
      • Wait...There is Moore...
        Doris Walker Jones of Essential Development Corp. is also corrupt: http://start.cortera.com/company/research/l1o9qsq2r/essential-development-corp/ She was working with Reggie to steal land. I know this for a FACT.
      • I can read good
        to "laughing" - thanks for posting the link. So funny, and so sad.
      • Is anyone in charge?
        Come on Greg! Why so quiet? I am glad the Feds are there to help you clean your own house!
      • laughing too
        I noticed that too. here is what he said about his current job "I currently work with various Tax Increment Fincance (TIF) Districts to help revitalize and redevelope their area's." Really not funny.
      • look up
        Reggie was handpicked for his position by a certain "mentor" upstairs in the Mayor's Office. Wouldn't be surprised if John was another star mentee.
      • Two peas in a pod
        I just laughed out loud when reading John Hawkins LinkedIn profile. Give it a read http://www.linkedin.com/pub/john-hawkins/51/a61/104 This former retail clothing manager proclaims "experience allows me to be confident and comfortable in the company of executive level personnel." His use of liaison as a verb in addition to some simple spelling errors seem to imply otherwise. He and Reggie are absolutely cut from the same arrogant, overconfident cloth.
        • twenty somethings
          Since when are 27 & 29 year olds responsible enough to be the ones in charge without oversight? Never knew too many that were capable of that, and obviously these two were not! With Joe Hogsett's recent record of Fed Cop, he must be soon running for Senator, Governor, or some other higher office.
          • wow
            I been trying to buy the abandon lot next to me for over a year. I could never get in touch with Reginald Walton I see why now.

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