ABOVE: The FBI raided city offices in May in connection with the Land Bank scandal
INDIANAPOLIS – A scandal surrounding the Indianapolis Land Bank has expanded, with prosecutors adding three new counts to the indictment.
According to court documents, Reggie Walton, the Land Bank’s former administrator, targeted people who’d fallen victims of another housing scam and took advantage of them. David Johnson—the director of the nonprofit Indianapolis Minority AIDS Coalition—and three others were also named in the indictment.
The new counts include two additional wire fraud charges and a conspiracy to commit money laundering charge.
According to the indictment, Walton and Johnson charged victims inflated prices to buy houses and then pocketed that money. They mostly went after Hispanic victims in a scam that involved 14 people. The individuals had bought abandoned homes in Indianapolis from two women who claimed to own them. However, the women—who were later convicted of fraud—did not in fact own the homes.
The Marion County prosecutor’s office appealed to the city for help, and the city agreed to sell the homes for $1,000. Walton was put in charge of transferring the properties from the Department of Metropolitan Development to the Land Bank. Under the rules, the deal would be facilitated by a nonprofit acting as a middleman.
After getting the authority to make the deal, Walton charged the victims $4,000 in closing costs instead of $1,000, the indictment said. He also told them that real estate closings were done in cash. According to the indictment, “Walton and Johnson collected the $4,000” and “divided the proceeds of the sale among themselves.”
Alleged co-conspirators Randall Sargent, Aaron Reed and John Hawkins were also charged in the May indictment. They’re accused of carrying out a scheme to abuse the Indianapolis Land Bank program for their own benefit. The scam involved bribery and kickbacks, according to court documents.
Federal authorities raided offices of the Department of Metropolitan Development at the City-County Building in May. Walton and Hawkins–both city employees–were fired days later.
All five are set to go on trial Feb. 24 in U.S. District Court in Indianapolis.