Johnson gets 5-year sentence in Indy Land Bank case

David Johnson, who was found guilty of wire fraud and money laundering as part of the Indy Land Bank scandal, was sentenced to more than five years in federal prison Friday by U.S. District Judge William T. Lawrence.

Johnson, 49, was among several defendants charged in the wake of a multi-year federal probe of corruption tied to the city's land bank, which manages the disposition of tax-delinquent, abandoned properties.

Johnson, the executive director of the Indianapolis Minority AIDS Coalition, and co-defendant Reginald Walton, the former director of the land bank, were convicted at trial in March of participating in a scheme to defraud the city.

Federal prosecutors accused Walton and Johnson of using their government positions to transfer promising properties in exchange for cash bribes and kickbacks. Three other co-defendants agreed to plea deals before trial.

Prosecutors said Johnson will be required to serve at least 85 percent of his 66-month sentence for three counts of wire fraud and one count of money laundering.

Walton, convicted on eight felony counts including wire fraud and bribery, has yet to be sentenced.

Investigators say for-profit purchasers of abandoned properties paid bribes and kickbacks to Walton to bypass the legal procedure under which businesses may acquire foreclosed properties held by the Land Bank. 

Walton diverted the properties to the Indianapolis Minority AIDS Coalition, or IMAC, which then transferred the properties to the for-profit buyer.

Prosecutors say Walton and Johnson also participated in a separate real estate scheme involving city-owned properties in which they defrauded 14 victims out of $3,000 each.

“Abandoned properties are a blight on this community and a threat to public safety,” U.S. Attorney Josh Minkler said in a written statement. “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.”