Chesterton Tribune

 

 

Don Johnson's appeal denied by state court

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Don Johnson, the former Duneland real estate agent who was seeking the dismissal of eight of the 19 felony charges filed against him on the ground that the statute of limitations has expired, has been stymied by the Indiana Court of Appeals.

In December the Court of Appeals denied--without comment--Johnson’s motion for an interlocutory appeal.

Johnson filed that motion in September, after Porter Superior Court Judge Roger Bradford ruled that the statute of limitations had not expired.

The eight counts in question--four alleging that Johnson sold unregistered securities, for a Tennessee real estate development; four that he was not himself registered to be a seller of securities--are all Class C felonies, and under Indiana Code persons accused of committing a Class C felony must be charged with a crime no later than five years after they allegedly committed it. The date of the earliest of the eight alleged offenses is July 2007, not quite seven years before Johnson was formally charged, in March 2014; the date of the latest, March 2008, almost exactly six years before he was charged.

Prosecutors, on the other hand, argued that, per Indiana Code, the statute of limitations was “tolled”--that is, paused or delayed--because Johnson actively concealed the commission of the alleged crimes, by structuring the promissory notes which he issued to investors to mature after a period of five years.

Prosecutors also argued that Johnson concealed the commission of the alleged crimes by his “failure to speak, when he had a legal duty to do so”--that is, by his alleged failure to inform investors that the securities in question were unregistered as was he.

In August, Judge Roger Bradford denied Johnson’s motion.

On Sept. 30, however, Johnson filed a motion for an interlocutory appeal with the Indiana Court of Appeals, in which he maintained that Bradford’s denial would cause him “to suffer substantial expense, damage, and injury if the order is erroneous and the determination of the error is withheld until after judgment.” That’s because, in order to defend himself, Johnson, his attorney, and investigators would have “to travel to Tennessee to retrieve documents, locate witnesses, and gather evidence regarding the Tennessee development project,” according to Johnson’s motion.

They would also have to travel to Wisconsin, to locate and interview Johnson’s late partner’s ex-wife; and they would have to retain “experts” to “examine real estate development projects and expenses related to the development projects.”

In addition, Johnson wanted the Court of Appeals to rule on “a substantial question of law,” namely, on whether or not he engaged in “any additional acts of concealment,” beyond the alleged one of structuring the promissory notes to mature after five years.

All of this is beyond the point, prosecutors maintained, since trips to and investigations in Tennessee and Wisconsin are red herrings, inasmuch as the core issue is whether or not Johnson sold unregistered securities and whether or not he was registered to be a seller of securities. “Even if the state were to stipulate, and it will not, that the development was wildly successful, because it was not, the defendant could still be found guilty of each of these charges,” Prosecuting Attorney Brian Gensel stated.

Gensel also maintained that Johnson was asking the Court of Appeals to rule on an issue which is, in fact, a matter for the jury. “The state alleged facts that the defendant concealed evidence of his offenses in the manner in which he structured the securities and by failing to inform the investors that neither he nor the securities were registered,” Gensel states. “Whether the facts support these allegations, and whether these allegations are concealment, is a question for the jury.”

The Case

Johnson has been charged with the following:

* Seven counts of securities-registration violation, alleging that he sold unregistered securities.

* Seven counts of broker-dealer registration violation, alleging that he sold securities without being registered to do so.

* Three counts of securities fraud, alleging that he employed a scheme to defraud, made an untrue statement of material fact, or otherwise engaged in deceitful business practices.

* One count of forgery, alleging that he signed a dead woman’s name on an insurance check.

* One count of theft, alleging that he then stole the insurance check.

Among other things, the original probable cause affidavit filed by the Chesterton Police Department alleges that one of Johnson’s victims was a woman who belonged to Johnson’s church, to whom he promised a 30-percent return on a $60,000 investment from the woman’s National Steel retirement account. Five years after signing the promissory note, Johnson told the woman that a downturn in the economy had halted work on the real estate project, yet the woman kept receiving statements from a trust company showing a balance of $59,000 or more and didn’t realize that she’d lost all of her money until she talked to her son about the situation, the affidavit states.

Revocation of Johnson’s Broker’s License

Johnson was for years a familiar face in the Duneland real estate market. Then, in November 2010, the Indiana Attorney General’s Office brought a 33-count administrative complaint against him alleging numerous improprieties. In June 2012, Johnson and the Indiana Real Estate Commission (IREC) reached a negotiated settlement under which the IREC suspended his broker’s license for three years and ordered him to pay $15,000 in consumer restitution.

But when Johnson failed to pay the first $5,000 installment of that restitution, the IREC revoked his broker’s license permanently.

The IREC had previously concluded the following about Johnson’s practices:

* That he “engaged in material deception” by providing advice on bankruptcy filings without a license to practice law.”

* That he had “become unfit to practice due to failure to keep abreast of current theory” as well as to “professional incompetence.”

* That Johnson failed to notify a client whose house he said he would purchase that the property was subsequently sold at a sheriff’s sale, but he continued to collect rental payment totaling $1,800 from the tenants of the property while at the same time failing to pay the mortgage on the property.

 

 

Posted 1/26/2017

 
 
 
 

 

 

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