Two city officials charged in connection with fraud, bribery scheme

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INDIANAPOLIS, Ind.– Federal agents wheeled boxes of documents and computers out of the twentieth floor offices of the Indianapolis Department of Metropolitan Development at the City-County Building in the first corruption case to tough the administration of Mayor Greg Ballard.

Assistant Administrator Reginald Walton and his assistant John Hawkins were among five people charged by a federal grand jury with wire fraud and bribery for a scheme that has defrauded city taxpayers of at least $100,000 through straw sales of distressed properties.

“It’s alleged that Mr. Walton and Mr. Hawkins turned this program on its head,” said US Attorney Joe Hogsett. “They used non-profit organizations and the real estate firms run by their co-defendants to unload city-owned properties at greatly discounted prices, all with the knowledge that these non-profit groups would turn around and sell those lots to real estate developers at fair market value.”

Also indicted were Aaron Reed of Naptown Housing Group, David Johnson of Indianapolis Minority AIDS Coalition and Randall Sargent of New Day Residential Development.

“In turn for setting up these deals, Mr. Walton and Mr. Hawkins are alleged to have accepted kick back payments on these sales,” said Hogsett. “Mr. Walton is also alleged to have accepted bribes both from his co-defendants as well as from an undercover FBI agent as part of this investigation.”

Adam Thies, director of Metropolitan Development, said he first became aware of the FBI investigation two months ago.

Mayor Ballard issued a statement that read, “I take these allegations very serious and I will not tolerate abuse of the public trust. That’s why I initiated the toughest ethics and firs whistleblower laws in the history of the city.

“I appreciate the work of federal officials in this matter and my team will continue to assist them in this investigation.”

The five men appeared in handcuffs before a federal magistrate and were released without bond.

“It is my hope that these last few weeks will serve to give the people confidence and comfort,” said Hogsett just days after he announced a guilty plea by former prosecutor David Wyser to bribery charges and the sentencing of former city county councilman Paul Bateman to 27 years in prison after he pleaded guilty to a corruption scheme. “We are not intimidated by who you are or how powerful your friends may be.”