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Press Release

Defendant in land bank scheme sentenced

For Immediate Release
U.S. Attorney's Office, Southern District of Indiana

INDIANAPOLIS – Josh J. Minkler, United States Attorney, announced today that David Johnson, 49, of Indianapolis, Indiana was sentenced to prison today by U.S. District Judge William T. Lawrence for his role in the City of Indianapolis’ Land Bank scandal.

Johnson, the Executive Director of the Indianapolis Minority AIDS Coalition (“IMAC”) was sentenced to 66 months= imprisonment following his conviction at trial for three counts of wire fraud and one count of money laundering.  Johnson was also sentenced to serve three years of supervised release following his release from prison.

Johnson and co-defendant Reginald Walton, the former Director of the Indianapolis Land Bank, were convicted at trial of participating in scheme to defraud the City of Indianapolis.  Under this scheme, for-profit purchasers of the properties paid bribes and kickbacks to Walton to bypass the legal procedure under which for-profit businesses may acquire foreclosed properties held by the Land Bank.  After receiving the bribes and kickbacks, Walton diverted the properties from the City to IMAC, which then transferred the properties to the for-profit purchaser.  Johnson participated in this scheme to defraud by making his charity available for the scheme and funneling bribes and kickbacks from the for-profit entity to Walton. 

In addition, Johnson and Walton participated in a scheme where they fleeced individuals who had previously been victimized by a separate fraudulent real estate scheme in Indianapolis.  Initially, Walton promised to transfer City-owned real estate to the victims of the separate real estate scam for $1,000.  Walton, however, subsequently increased the price of the properties to $4,000.  Walton and Johnson then pocketed the additional $3,000 that they collected from each victim.  In all, Walton and Johnson defrauded fourteen victims in this manner.  United States Attorney Josh J. Minkler stated “Abandoned properties are a blight on this community and a threat to public safety.  The Land Bank was created as a public service to eliminate that problem.  Instead, Reggie Walton and David Johnson used the Land Bank to serve themselves through insider deals involving bribes and kickbacks.  The clear message that was sent today is that a federal prison cell awaits those who engage in a scheme of public corruption.”

Minkler further stated, “To be clear a federal sentence of 66 months in prison means just that.  You go to prison.  There is no parole.  There is no half-way house.  This is no suspended sentence.  There is no home detention or community corrections.  At a minimum, Mr. Johnson will be required to serve 85% of the 5 and ½ year sentence in a federal prison.”

Assistant United States Attorneys Bradley A. Blackington and Cynthia J. Ridgeway prosecuted the case for the government.  The investigation was conducted by the Federal Bureau of Investigation and the Indiana State Police.

Updated December 4, 2015