real estate agent Don Johnson-- already charged with 16 felony counts-- has
been charged with three more.
The latest counts
are of a piece with the first 14, filed in March 2014: Johnson is accused of
selling an unregistered security, of transacting business as an unregistered
broker-dealer, and of committing fraud in the sale of a security.
All three counts
are Class C felonies-- as are 15 of the 16 previously filed counts--
punishable by a term of two to eight years.
According to the
probable cause affidavit filed by an investigator with the Indiana Secretary
of State’s Securities Division, in September 2013 Johnson and his son,
Donnie Jr., leased a home on Sherwood Ave. in Portage to a man who agreed to
pay a monthly rent of $1,000 to $1,200. At the time, the affidavit states,
Johnson told the man that Donnie Jr. “was at the meeting as a licensed real
estate agent because Johnson Sr. was no longer a licensed real estate broker
(That is true.
Johnson’s broker’s license was permanently revoked by the Indiana Real
Estate Commission (IREC) in 2012, after Johnson failed to pay the first
installment of a $15,000 restitution ordered by the IREC as part of a
settlement reached with Johnson, to close a 33-count administrative
complaint filed against him two years earlier. That complaint accused
Johnson of engaging in material deception, of being “unfit to practice due
to failure to keep abreast of current theory,” and of “professional
incompetence,” among other things.)
Later in the fall
of 2013, Donnie Jr.’s new tenant happened to tell Johnson of a 401K account
of his with a balance of $158,000, the affidavit states. Johnson told the
man that “he could get a better return on the money if (he) let Johnson Sr.
invest it for him.”
In December 2013,
the man went ahead and transferred the $158,000 into an Equity Trust which
Johnson had opened for him, with the understanding that the funds would be
used “in real estate investments,” possibly in Arizona, Johnson told the
man, where he and Donnie Jr. were “looking into investment properties,” the
A few weeks later,
Johnson undertook a further transaction, in which the man agreed to lend the
funds in his Equity Trust to “Don Johnson LLC of 535 Broadway, Chesterton,
IN 46304.” In apparent support of the man’s investment, Johnson faxed him a
document purporting to be a mortgage on the 535 Broadway property, the
location of Johnson’s martial arts studio, the affidavit states. That
document was signed by Johnson and appeared to show that the property was
owned by “535 Broadway Chesterton Trust,” the affidavit states.
Division investigator later determined, however, after contacting the Porter
County Recorder’s Office, that no mortgage was filed for the 535 Broadway
property or else for the “535 Broadway Chesterton Trust,” the affidavit
On Jan. 6, Johnson
withdrew the $158,000 from the man’s Equity Trust account, while telling the
man that “it was a good thing that his money was in the Equity Trust account
where Equity Trust could watch the money,” the affidavit states.
Apropos of nothing
in particular, the investigator concludes his account of Johnson’s activity
by noting that-- according to postings on Facebook pages apparently
belonging to Johnson and his wife-- in April 2014 he and she went on a
Norwegian Cruise Line holiday in the Caribbean, during which Johnson took a
two-day course aboard ship which included a session entitled “Amazing Power
to Separate People from Their Money Every Single Time.”
The First 14 Counts
In March 2014,
Johnson was charged with six counts of securities-registration violation,
alleging that he sold unregistered securities; six counts of broker-dealer
registration violation, alleging that he sold securities without being
registered to do so; and two 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.
Those counts are
based on the information of six persons whom Johnson allegedly promised a
high rate of return on an investment, typically in real estate in Tennessee.
Those persons were persuaded to roll over their IRA accounts to Equity Trust
Company, an independent IRA custodian which in turn transferred those moneys
to Johnson’s company, Private Lending LLC, the original probable cause
One of the six, to
whom was promised 10-percent interest on a $300,000 investment over seven
years, received a $2,500 monthly interest payment for two years, the
affidavit states, after which time the payments dropped below $2,500 and
then stopped completely. “Johnson refused to make any more payments or
return the $300,000 principal,” the affidavit states.
Another of the
six-- a member of Johnson’s church-- was promised a 30-percent return on a
$60,000 investment from the woman’s National Steel retirement account, the
affidavit states, only to be told by Johnson five years later that “the
downturn in the economy had halted the real estate project.” Because she
kept receiving statements from Equity Trust Company showing a balance of
$59,000, the woman did not realize until speaking with her son that she had
lost all the money, the affidavit states.
Johnson pleaded not
guilty to the first 14 counts in April 2014.
Two more counts
were filed against Johnson in June 2014: one of forgery and one of theft.
Those stem from an
investigation by the Porter Police Department into an allegation made by a
man who accused Johnson of signing both the man’s name and his late wife’s
name to an insurance check issued after Johnson made a claim for roof damage
on a house owned by the man and being purchased by Johnson.
The man advised
that he only learned of the $8,443.74 check in the first place because it
was found among a package of documents subpoenaed during the securities
fraud investigation, the probable cause affidavit states.
That check had been
made payable to the four parties with a financial interest in the house: the
man, the man’s wife, Johnson, and Johnson’s wife. But Johnson deposited the
whole of the check into his own bank account, the affidavit states.
The forgery count
is a Class C felony. The theft count, a Class D felony, punishable by a term
of six months to three years.