Third defendant pleads guilty on eve of Land Bank trial

A third defendant in an alleged kickback scheme involving the Indy Land Bank has pleaded guilty on the eve of a trial set for the first week of March.

Randall K. Sargent, owner and president of New Day Residential Development, joins John Hawkins, a former city employee, and Aaron Reed in reaching deals with federal prosecutors.

Sargent on Thursday agreed to plead guilty to one count of wire fraud and one count of bribery, a court filing shows. Previously, Reed pleaded guilty to four counts of wire fraud, and Hawkins pleaded guilty to one count of wire fraud. None of the men has been sentenced.

The deal leaves two defendants in the case: former Land Bank Director Reginald T. Walton, and David Johnson, executive director of the Indiana Minority AIDS Coalition. Walton is facing eight felony counts, and Johnson faces two.

A trial is scheduled to begin March 3 in front of U.S. District Judge William T. Lawrence.

Hawkins, at the direction of Walton, is accused of using his official position to orchestrate the transfer of city-owned real estate to not-for-profit entities, which allegedly flipped the properties to private investors recruited by Walton's friend Reed, who split the profits with the two city employees.

The indictment also alleges Walton and Johnson secretly lined their pockets as they ostensibly helped the Marion County Prosecutor's Office provide restitution for more than a dozen victims of a separate fraud orchestrated by Shela Amos.

The cases were developed by a public corruption task force that includes representatives from the FBI, Indiana State Police and U.S. Attorney's Office.

In a separate case, Walton is facing a wire fraud charge for allegedly soliciting financial kickbacks in exchange for a city contract to mow lawns of properties owned by the land bank.

Mowing contractor Mark Harsley also is charged with wire fraud in that case, which is scheduled for trial on April 13.