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Date: 11-03-2017

Case Style:

United States of America v. David Johnson and Reginald T. Walton

Seventh Circuit Court of Appeals Courthouse - Chicago, Illinois

Case Number: 15-3830 and 16-1471

Judge: Williams

Court: United States Court of Appeals for the Seventh Circuit on appeal from the Southern District of Indiana (Marion County)

Plaintiff's Attorney: Bradley A. Blackington and Cynthia J. Ridgeway

Defendant's Attorney: Michael J. Donahoe - FPD for Reginald T. Walton


Jodi Garvey for David Johnson

Description: The Indianapolis Land Bank was
created to improve the quality of life in Indianapolis neighborhoods
by returning tax-delinquent and other troubled
* Of the Western District of Wisconsin, sitting by designation.
2 Nos. 15-3830 and 16-1471
properties into productive use. But, in 2011, Reginald Walton,
the manager of the Land Bank, began scheming with others,
including David Johnson, to use the Land Bank as a personal
piggy bank by orchestrating the sale and resale of the City’s
properties through a nonprofit loophole and pocketing the
profits. The total loss to the city was $282,782.38. For their role
in this scheme, Johnson and Walton were indicted and found
guilty of honest services wire fraud, wire fraud, and conspiracy
to engage in money laundering. Walton was also convicted
of receiving bribes.
On appeal, Walton and Johnson challenge the sufficiency
of the evidence, arguing that the government failed to prove
that either Walton or Johnson had the requisite intent for a
fraud conviction. We find the government provided substantial
evidence that Walton and Johnson had specific intent, including
evidence of kickbacks and making false statements.
Walton and Johnson also challenge their money laundering
convictions, but there was sufficient evidence to support
those convictions as well.
Walton also challenges the district court’s jury instructions,
arguing that the court’s instruction on 10 U.S.C. § 666
permitted the jury to convict him of accepting a gratuity and
not a bribe, and that § 666 should only permit conviction for
bribes. We find no clear error in the § 666 instruction. The
court’s instruction and record evidence made clear that Walton
was convicted for accepting bribes, not gratuities, and we
decline Walton’s invitation to overturn precedent to reconsider
the construction of § 666. Johnson and Walton’s assertion
that the district court erred by failing to provide a good faith
instruction is also incorrect. Their convictions required proof
Nos. 15-3830 and 16-1471 3
of their bad intent (specific intent to commit fraud), so a good
faith jury instruction was unnecessary.
Finally, Walton and Johnson challenge their sentences.
Both were subject to a sentencing enhancement because their
offenses involved a public official in a high-level decisionmaking
position (Walton). We find this enhancement was
proper, because as the manager of the Land Bank, Walton was
in a sensitive position. We also find no error in the district
court’s decision to enhance Walton and Johnson’s sentences
because they victimized vulnerable families.
I. BACKGROUND
A. The Land Bank
In 2011, Reginald Walton was the manager of the Indianapolis
Land Bank, a public agency authorized by Indiana law
to acquire abandoned, tax delinquent, and other problem
properties. Walton’s official title was Assistant Administrator
for the Department of Metropolitan Development (“DMD”),
but his specific position gave him primary authority over acquiring
and selling properties in the Land Bank. Once a property
was in the Land Bank, Walton was responsible for getting
it sold. He drafted resolutions that instructed when and to
whom the properties would be sold. The resolutions he
drafted were reviewed by his direct supervisor, Jennifer Fults,
and submitted to the Metropolitan Development Commission
(“MDC”), where they were usually approved without question.
Once the MDC approved a transaction, Walton had his
team draft the deed and sales disclosure on behalf of the
DMD, and ultimately the Land Bank conveyed the property
as Walton proposed and he signed on behalf of the City.
4 Nos. 15-3830 and 16-1471
Under the state laws regulating the Land Bank, there were
two ways for Land Bank property to be sold. If property was
sold to a for-profit entity or private buyer, two appraisals had
to be prepared, and the property could then be offered in a
public sale at a minimum price of the average of the two appraisals.
A secondary process was available only for nonprofit
organizations that met specified criteria. A nonprofit was eligible
to purchase through the second process if it had been in
existence for at least one year, had the mission of housing, and
aimed to benefit people with low to moderate incomes. Eligible
nonprofits could purchase Land Bank properties for set
rates of $2,500 if the property had a clean title or $1,000 if the
property did not have a clean title. No appraisal was required,
nor was a public sale. But, because of the criteria, few nonprofits
were qualified to take advantage of the lower pricing
scheme. There was no prohibition on eligible nonprofits reselling
their acquired properties.
B. Walton’s Land Bank Transactions
For some time, Walton operated the Land Bank as it was
intended. However, in May 2011, Walton met Aaron Reed, a
laid off graphic designer who was seeking financial opportunities
in real estate. At the meeting, Walton explained that he
ran the City department that oversaw abandoned homes.
Reed and Walton discussed the Land Bank as an opportunity
to make money. Soon thereafter, Reed established Naptown
Housing Group (“Naptown”), a property development company
and went into business with Walton. The two spoke with
an accountant who suggested that Walton start a consulting
firm to handle his private real estate deals. However, Walton
Nos. 15-3830 and 16-1471 5
rejected this idea because of conflicts with his work and his
marital problems. Walton wanted to remain a silent partner.
That’s how the scheme began. Walton then started to identify
valuable properties in the Land Bank and invited select
nonprofit organizations to purchase these properties for either
$1,000 or $2,500. He worked with nonprofits that he knew
would immediately transfer the properties back to Reed, Naptown,
or a chosen private buyer and turn over the profits of
the sales. Once the property was purchased for $1,000 or
$2,500, Naptown either sold the property to a private buyer,
renovated it for sale, or prepared it as a rental. Reed’s profit
margin was high and, as agreed upon, he paid half of the profits
to Walton in cash.
The first properties Reed and Walton partnered to sell involved
2806 and 2810 Delaware. Walton told Reed that the
properties had generated interest from potential buyers, and
they agreed to sell it together and split the profit. The property
was purchased through TM&J Youth Foundation, a nonprofit
operated by Shela Amos, which paid $2,501 for 2806
Delaware and $601 for 2810 Delaware.1 Naptown then resold
the property in a $65,000 cash deal. For his part in the deal,
Reed gave Walton $27,500 cash. Walton said he had to be paid
in cash due to his position with the City. Reed gave money to
Walton as a “kickback” for “push[ing] the property through
his department” at the DMD. Reed knew they were breaking
the law.
1 The combined price of the two properties was lower than the standard
nonprofit rate for both properties because one was a parking lot.
6 Nos. 15-3830 and 16-1471
Reed and Walton’s partnership continued with the sale of
at least ten additional Land Bank properties, including the
sales of 3905 North Carrollton Avenue, 3253 and 3249 North
Ruckle Street, and the “Indianapolis duplexes,” four sets of
duplexes on Indianapolis Avenue. Reed testified that Walton
gave him “right–to-enter forms” for properties they intended
to purchase, so that Reed could inspect them before buying.
While they made profit from each of their sales, some of the
properties Reed and Walton bought were still owned by Naptown
with plans to rent or sell when Reed and Walton’s arrests
ended the scheme.
In addition to working with Reed, Walton also began
working with John Hawkins, a former Special Assistant to the
Mayor of Indianapolis and a project manager at the DMD.
Hawkins noticed Walton was getting money back for helping
people. When he asked about it, Walton told him that they
were “love offerings.” Hawkins asked to get involved, and he
did. Hawkins brought at least two potential buyers to Walton.
In one of the sales, the buyer paid Walton and Hawkins $7,200
cash before the property was transferred from MDC to the cooperating
nonprofit. In text messages referencing this deal,
Walton indicated that if there were any “heat” from the MDC,
he would be able to handle it. Walton gave Hawkins $1,600
cash for bringing in the deal.
Walton also had dealings with Randall Sargent and undercover
FBI agent “Jay Foreman.”2 Walton helped Sargent buy
six properties from the Land Bank in exchange for a “top shelf
fee” for ushering the properties through the Land Bank. Once
2 Foreman testified using his undercover name as he is involved in
other ongoing investigations.
Nos. 15-3830 and 16-1471 7
the DMD transferred the properties to a nonprofit Sargent operated,
Sargent gave Walton a blank $500 money order. Foreman
also sought to acquire Land Bank property through Walton
and agreed to “take care of” him for pushing property
through the DMD. Walton showed Foreman some Land Bank
properties and told him about his dealings with Aaron Reed.
Walton also told Foreman that he did government consulting
and received kickbacks for his help. Walton accepted $500
from Foreman, and told Foreman he would go to his office
and start working on a deal.
C. Johnson and IMAC’s role
Some of the nonprofits Walton and Reed used for their earlier
real estate transactions became unavailable, so they incorporated
a new partner, David Johnson. Johnson ran the Indianapolis
Minority Aids Coalition (“IMAC”), an eligible nonprofit
purchaser under the Land Bank rules, and he quickly
became a necessary part of the scheme. Walton knew Johnson
through Johnson’s earlier work with the City and recruited
him to help acquire properties.
Reed and Walton went to Johnson’s office to propose the
partnership. They told Johnson how the process worked, and
explained that they would split proceeds. Reed and Walton
told Johnson there was an additional party, a broker. But, this
was a lie allowing Walton and Reed to receive a larger portion
of the profits. Walton and Reed emphasized Walton’s position
with the City, and warned Johnson it was important not to
disclose their dealings. Johnson agreed to become involved,
and he began using IMAC to acquire Land Bank properties to
sell for profit for Walton and others involved in the scheme.
8 Nos. 15-3830 and 16-1471
On their first deal, Walton and Reed intended to sell a
property to a private buyer for $17,500. The property was sold
to IMAC, then to the private buyer. Johnson took $2,500 to
cover IMAC’s purchase cost, retained an additional $1,000 for
himself, and then wrote a $14,000 check to Naptown, falsely
indicating on the IMAC check that the money was for a grant.
On the second deal, Walton and Reed purchased a property
that had garnered interest from investor groups. Walton orchestrated
the sale to IMAC, but used his position to defer the
City’s collection of the property purchase price. IMAC never
paid the City for the property. However, Reed paid Johnson
for serving as a middleman. On the third deal, Walton obtained
approval of another property, and again got the City to
defer IMAC’s payment for the property. The property was
sold for $12,500 and Johnson retained $1,500 to pay DMD for
IMAC’s purchase, retained $1,000 for himself, wrote Naptown
a $5,500 check, and paid Walton a $4,500 cash kickback.
Johnson was also integral in the Land Bank property sales
involving John Hawkins. In each of those transactions, IMAC
served as the middleman nonprofit buyer. In fact, on the day
the City transferred a property at 3516 Salem Street to IMAC
at the arrangement of Walton and Hawkins, Johnson wrote an
IMAC check to Hawkins for $1,000 which falsely indicated
that the payment was for “Payroll: Consulting: 2013 Gala.”
Hawkins never performed any consulting work for an IMAC
gala in 2013. Johnson later sold the property to a private developer
for $8,000.
D. Amos Fraud Victims
In August 2012, the Marion County Prosecutor’s Office
charged Sheila Amos with fraudulently selling properties she
did not own to unsuspecting victims, mostly poor Hispanic
Nos. 15-3830 and 16-1471 9
families who spoke little or no English. Some of the properties
Amos “sold” were actually properties in the Land Bank, and
the prosecutor and two detectives on the case approached the
City about helping the victims remain in these properties.
They met with Walton, and he agreed on behalf of the City to
arrange for some of the victims to purchase and stay in their
homes (those owned by the Land Bank). At a later meeting,
Walton told the Amos victims that they would be able to purchase
their homes for either $1,000 or $2,500 through a nonprofit.
Walton pushed a sale of the properties through IMAC to
get the nonprofit price of $1,000 for each property. At closing,
however, Walton told the victims the price for each property
was $4,000, and must be paid in cash. When asked why the
price had increased, Walton said that the difference was
meant to benefit IMAC. However, after the purchase, Johnson
kept a portion of the money and paid the rest to Walton.
E. Indictment and Trial
On May 14, 2013 the government filed an eight-count indictment
naming Walton, Johnson, Reed, Hawkins, and Sargent.
A week later, the defendants were arrested. On October
16, 2013, an eleven-count Superseding Indictment was filed.
Counts 1-4 alleged honest services wire fraud by all of the defendants,
Count 5 alleged additional wire fraud by Walton
and Johnson in connection with the Amos fraud victims,
Counts 6-10 alleged that Walton received bribes, and Count
11 alleged that Walton and Johnson conspired to commit
money laundering.
Reed, Hawkins, and Sargent each pled guilty and testified
against Walton and Johnson as government witnesses. After
10 Nos. 15-3830 and 16-1471
an eleven-day trial, the jury found both Walton and Johnson
guilty. Walton was convicted on Counts 1-5, 8, 10, and 11, and
was sentenced to 108 months in prison, which was below the
guidelines range of 135-168 months. Johnson was convicted
on Counts 2, 3, 5, and 11 and sentenced to 66 months, which
was below the guidelines range of 87-108 months. On appeal,
they challenge the sufficiency of the evidence supporting
their convictions, the jury instructions, and their sentences.
II. ANALYSIS
A. Sufficient Evidence for Honest Services Fraud, Wire
Fraud, and Money Laundering Convictions
Appellants raising insufficiency challenges face “a nearly
insurmountable hurdle.” United States v. Tucker, 737 F.3d
1090, 1092 (7th Cir. 2013) (quoting United States v. Pulido, 69
F.3d 192, 205 (7th Cir.1995)). We review a trial court’s ruling
on a Rule 29 motion de novo, asking only “whether evidence
exists from which any rational trier of fact could have found
the essential elements of a crime beyond a reasonable doubt.”
United States v. Doody, 600 F.3d 752, 754 (7th Cir. 2010). Reversal
under this standard is rare because we defer heavily to the
jury’s findings and review evidence in the light most favorable
to the government. Id. We reverse only where “no rational
trier of fact could have found the defendant guilty… .” Id.
1. Evidence of Walton’s Intent
For a conviction of wire fraud, the government was required
to prove that Walton was “(1) involved in a scheme to
defraud; (2) had an intent to defraud; and (3) used the wires
in furtherance of that scheme.” United States v. Weimert, 819
F.3d 351, 355 (7th Cir. 2016) (quoting United States v Faruki,
803 F.3d 847, 852 (7th Cir. 2015)). Evidence proves intent
Nos. 15-3830 and 16-1471 11
where it shows that a defendant acted “with the specific intent
to deceive or cheat, usually for the purpose of getting financial
gain for one's self or causing financial loss to another.” Id.
at 355 (quoting Faruki, 803 F.3d at 853).
Walton argues there is no evidence he had the specific intent
to commit fraud. He argues he was “a little cog in a big
machine” and could not acquire property from the Land Bank
without his resolutions being reviewed and approved by his
superiors and the DMD. He claims that he was under pressure
to get Land Bank properties sold and selling through
nonprofits was beneficial to the City. He also asserts that there
was absolutely nothing wrong with a for-profit company buying
property from a nonprofit, and highlights evidence that a
few coworkers purchased property from the Land Bank. He
concludes that the evidence shows he did not get paid for doing
anything he would not otherwise do.
Even if Walton were able to paint some interpretation of
the facts that would render him without fraudulent intent, he
would not be entitled to relief. We do not review evidence to
determine whether any rational factfinder could have decided
in favor of a defendant. The standard demands that we
find whether a reasonable juror could find guilt. Considering
the evidence in the light most favorable to the government,
the answer to that question is overwhelmingly yes.
The government offered extensive evidence that Walton
intended to commit fraud. At trial, Walton admitted he intended
to earn money from Land Bank sales. He admits in his
brief that he knew profiting from the sales of Land Bank properties
was “questionable ethically,” which is why he got paid
in cash and tried to be the silent partner. But, he claims that
he did not know his actions were illegal. However, a mistake
12 Nos. 15-3830 and 16-1471
of law is not a defense to honest services fraud. United States
v. Blagojevich, 794 F.3d 729, 738-39 (7th Cir. 2015). Walton’s
Land Bank scheme partners testified with details about each
of the Land Bank transactions Walton pushed through. The
jury was well within reason to infer from this evidence that
Walton knew he was cheating “for the purpose of getting financial
gain for [him]self” and intended to commit fraud.
Weimert, 819 F.3d at 355. We find no reason to question the
jury’s verdict for want of evidence.
Walton also argues that honest services fraud requires
proof of a quid pro quo, and that a mere breach of a fiduciary
duty is not enough to support his conviction. While a correct
statement of law, this argument fails to undermine Walton’s
conviction. In Skilling v. United States, 561 U.S. 358 (2010), the
Supreme Court made clear that an honest services fraud prosecution
requires proof of a kickback or bribe. This Circuit has
followed that directive. See Weimert, 819 F. 3d at 367; see also
United States v. Nayak, 769 F.3d 978, 980–81 (7th Cir. 2014) (affirming
mail fraud conviction of doctor who paid bribes and
kickbacks to encourage referrals); see also United States v.
Vrdolyak, 593 F.3d 676, 678 (7th Cir. 2010) (explaining guilty
plea based on hidden kickback from buyer to seller's director).
But here, Walton’s argument fails because the government’s
case against Walton showed a straightforward quid pro
quo scheme. Walton intended to deprive the City of his honest
services by accepting bribes and kickbacks from third-party
partners who relied on Walton to facilitate transfers of valuable
Land Bank properties at low cost. These actions established
a violation of 18 U.S.C. §§ 1343 and 1346. See Skilling,
561 U.S. at 404 (“[F]raudulent schemes to deprive another of
honest services through bribes or kickbacks supplied by a
Nos. 15-3830 and 16-1471 13
third party who has not been deceived” violate 18 U.S.C.
§§ 1343 and 1346); see also Hawkins, 777 F.3d. at 883–84 (“A
plan to take money in exchange for an official act constitutes
a scheme to defraud.”). Evidence of an illegal quid pro quo was
abundant. At least three individuals who paid kickbacks,
Reed, Sargent, and Hawkins, detailed how Walton sought,
and was paid, cash kickbacks. Influenced by these kickbacks,
Walton would draft resolutions assuring his partners could
acquire Land Bank properties at nonprofit prices. Walton’s
supervisors testified that Walton did not disclose his selfdealing
to the City, despite being a trusted City employee.
This evidence allowed a reasonable jury to infer an intentional
quid pro quo.
Walton also challenges his conviction for wire fraud
(Count Five), arguing that the details of the transaction were
disclosed and the fraud stemmed from the fraud of Sheila
Amos. The evidence underlying this count reflected that Walton
and Johnson worked with the Marion County Prosecutor’s
office to secure low-priced homes for individuals who
risked homelessness and had been victims of a fraud by Sheila
Amos (the “Amos Victims”). Walton told the Amos Victims
they would be able to obtain the properties for $1,000 and arranged
for Land Bank properties to be sold through IMAC.
However, at the last minute he and Johnson told them the
properties cost $4,000 each. Walton and Johnson pocketed
$3,000 from each sale.
Walton argues that all of the terms of this transaction were
disclosed and the “only fact… omitted was the full negotiation
position of the parties, in that Mr. Walton would not gain
anything on the transaction.” There is no question Walton intended
to benefit from the inflated price of the Amos Victim’
14 Nos. 15-3830 and 16-1471
properties, and this constituted fraud. Walton was not supposed
to be a party to the transaction. Cf. Weimert 819 F.3d. at
367–68 (finding no fraud where there was no undisclosed selfdealing
and all parties were aware of the defendant’s conflict
of interest). He, together with Johnson, purposefully swindled
the Amos Victims for personal gain. So, there was sufficient
evidence underlying this conviction.
2. Evidence of Johnson’s Intent
Johnson also argues that the government failed to provide
evidence of his intent. As we have noted, “[i]t is exceedingly
difficult to win on this basis, once a jury has weighed the evidence
and found guilt beyond a reasonable doubt.” United
States v. Dingle, 862 F.3d 607, 614 (7th Cir. 2017). Because Johnson
focuses on intent, this “makes our job relatively easy.” Id.
We review whether any rational trier of fact could have found
intent based on the government’s evidence. Id. (quoting Jackson
v. Virginia, 443 U.S. 307, 319 (1979).
A reasonable juror could conclude that Johnson intended
to engage in fraud. Such a conclusion was supported by testimony
that Johnson knew the Land Bank properties belonged
to the City, knew Walton’s position with the City and potential
conflicts, paid Walton a $4,500 cash kickback, and participated
and personally benefitted from Land Bank property
sales. Evidence also showed that he made at least one large
deposit into his personal bank account and purchased a Volvo
with ill-gotten gains. He actively concealed the scheme by
writing false entries in the memo line of kickback checks and
removing Walton’s name from property lists he forwarded to
potential purchasers. While Johnson asks us to disregard government
witness Reed’s testimony and consider evidence
Nos. 15-3830 and 16-1471 15
which he claims shows his lack of intent, the standard of review
does not permit us to do so. Determining credibility of
witnesses and weight of the evidence is the prerogative of the
jury. While we acknowledge that IMAC’s mission, serving
AIDS and HIV-afflicted people, is commendable, that is no
reason for us to assume, as Johnson requests us to do, that
Johnson’s sole motivation in the Land Bank scheme was to
help as many AIDS and HIV afflicted people as possible get
subsidized housing. In fact, evidence contradicts this, and a
reasonable juror could reject such an interpretation of the record.
The jury was reasonable to infer that Johnson had specific
intent.
Defendants, citing United States v. Pettigrew, 77 F.3d 1500
(5th Cir. 1996), argue that if we vacate their convictions for
fraud, we should also vacate their related money laundering
convictions. But, since we decline to vacate Walton or Jonson’s
convictions for fraud, we will decline their invitation to
vacate related convictions for money laundering.
B. No Error in Jury Instructions
“We have repeatedly held that approval of a jury instruction
in the district court extinguishes any right to appellate
review of the instruction.” United States v. Trudeau, 812 F.3d
578, 589 (7th Cir. 2016), cert. denied, 137 S. Ct. 566 (quoting
United States v. Yu Tian Li, 615 F.3d 752, 757 (7th Cir. 2010)).
Here, when the district court asked defense counsel whether
he had reviewed the district court’s final proposed instructions
and had any objections to these instructions, counsel indicated
that he read the instructions and had no objections.
The government argues that this approval waived Walton
16 Nos. 15-3830 and 16-1471
and Johnson’s right to now bring a challenge. The defendants
provide no counter to this argument.
Distinguishing purposeful waiver from negligent forfeiture
is tricky where, as here, defense counsel approves jury
instructions in a “rote call-and-response colloquy with the
district judge.” United States v. Natale, 719 F.3d 719, 731 (7th
Cir. 2013). Recent decisions in this circuit recognize the harshness
of waiver and hesitate to determine blanket approvals
“knowing and intentional decision[s]” to forego a challenge
without further analysis. Id. at 729 (quoting United States v.
Jaimes–Jaimes, 406 F.3d 845, 848 (7th Cir. 2005); see also United
States v. Ajayi, 808 F.3d 1113, 1121–22 (7th Cir. 2015) (applying
plain error review even though counsel stated “no objection”
during colloquy). Analyzing whether defendants’ approval of
the final instructions was knowing and intentional is further
complicated because they do not provide any argument
against waiver.
In any event, even if defendants’ challenges were not
waived, they are at the very least forfeited, and we review forfeited
arguments for plain error. United States v. Christian, 673
F.3d 702, 708 (7th Cir. 2012). We find plain error only where
the instructions do not fairly and adequately represent the issues.
United States v. Davis, 471 F. 3d 783, 791 (7th Cir. 2006).
Plain error requires an “obvious” error that is “clear under
current law.” Natale, 719 F.3d at 731 (quoting United States v.
McGee, 60 F.3d 1266, 1271–72). We will find plain error only
where the error affected defendant’s substantive rights.
Jaimes-Jaimes, 406 F.3d at 848. Defendants’ challenges fail to
show any error, much less plain error.
Nos. 15-3830 and 16-1471 17
1. Bribery Instruction Not Erroneous
Walton argues that the jury instructions relating to his 18
U.S.C. § 666 bribery charges were erroneous because they permitted
the jury to convict him of accepting a “gratuity” and
not a bribe. The challenged instruction stated that Walton
could be found guilty if he “accepted anything of value from
another person” and “acted corruptly with the intention to be
influenced or rewarded in connection with some transaction
or series of transactions… .” The instruction further clarified
that a “person acts corruptly when that person acts with the
understanding that something of value is to be offered or
given to reward or influence him in connection with his official
duties.” Walton now asserts that this jury instruction allowed
him to be convicted for a “gratuity” offense and argues
we should overturn precedent to hold that 18 U.S.C. § 666 excludes
criminalization of receipt of a gratuity.
Walton’s “gratuities” argument does not fly as a matter of
law. As Walton acknowledges in his brief, this court has ruled
that the word “reward” in § 666 criminalizes the receipt of
bribes and gratuities. United States v. Hawkins, 777 F.3d 880,
881 (7th Cir. 2015) (Ҥ 666 forbids taking gratuities as well as
taking bribes.”). So, the district court’s instruction, even if it
permitted conviction for taking a gratuity, certainly was not
clearly erroneous under current law.
Further, the jury instruction Walton challenges did not, in
fact, permit conviction based on a gratuity. Walton makes a
long argument focused on the word “reward” in the jury instruction
and argues that “reward” could be read to constitute
a gratuity offense separate from a bribery offense. He argues
against such a construction of the statute. Citing United States
v. Anderson, 517 F.3d 953 (7th Cir. 2008), Walton highlights
18 Nos. 15-3830 and 16-1471
that unlike a gratuity, a bribe must be made with a corrupt
purpose, such as inducing a public official to influence his official
action. He also notes that the penalty for gratuities (under
§ 201) is significantly lower than potential penalties under
§ 666. And, he argues that this court should explicitly exclude
gratuity offenses from § 666 and only criminalize bribery.
However, the challenged instruction did not criminalize
gratuities. To the contrary, the challenged instruction made
Walton’s conviction contingent on whether he “acted corruptly
with the intent to be influenced… .” In other words, the
jury instructions permitted conviction only if the jury found
Walton had accepted bribes. Walton’s attack on a hypothetical
“gratuities” instruction lacks any merit, and we need not
entertain it.
Walton’s argument is also inconsistent with the facts of
this case. The evidence at trial exposed Walton’s receipt of
kickbacks (bribes), not gratuities. The record established that
Walton passed specific properties through specific channels
at specific times to chosen parties for the purpose of getting a
prearranged payment. Walton again asserts that these were
not bribes, because he did not do anything he would not otherwise
have done. We disagree. Evidence indicates that Walton
steered properties toward partners who promised payments
in favor a person who would not. Because Walton’s intent
to be paid for his official acts existed before he transferred
Land Bank properties, this is simply not a gratuities case.
2. Good Faith Jury Instruction Not Required
Both Walton and Johnson argue that they were entitled to
a “good faith” jury instruction, which they claim was their
Nos. 15-3830 and 16-1471 19
theory of defense. Neither defendant can show any plain error
here. Seventh Circuit precedent, including the case cited
by defendants, United States v. Manjarrez, 258 F.3d 618 (7th
Cir. 2001), makes clear that it “is unnecessary to give a particular
defense instruction if its essential points are covered
in another instruction.” Id. at 626. A good faith instruction is
not required where lack of good faith is part of the charge.
United States v. Kokenis, 662 F.3d 919, 930 (7th Cir. 2011). Because
Johnson and Walton were convicted of crimes that required
the jury to find bad faith, and specifically the intent to
commit fraud, they were not entitled to an additional instruction
for good faith.
C. No Errors in Sentencing
Walton and Johnson both bring challenges to the sentences
they were given in the district court. A district court’s
legal interpretation of the sentencing Guidelines is reviewed
de novo, and factual findings are reviewed for clear error.
United States v. Hayes, 872 F.3d 843, 845 (7th Cir. 2017) (quoting
United States v. Harris, 718 F.3d 698, 703 (7th Cir. 2013).
Both of the challenges brought by defendants are based on
fact, so we review for clear error. Because Johnson’s counsel
did not object to his sentencing enhancements in the district
court, his claim on appeal is reviewed for plain error. Id. at
847.
1. Enhancement for Walton’s Sensitive Position
Not Erroneous
The defendants first argue that the district court erred by
enhancing their sentences based on Walton’s role as a public
official in a high-level decision making process. Whether an
individual is a public figure in a high-level decision making
20 Nos. 15-3830 and 16-1471
or sensitive position is a factual determination, reviewable for
clear error. See Hawkins, 777 F.3d at 884-85.
The sentencing guidelines provide that “if the offense involved
an elected public official or any public official in a
high-level decision making or sensitive position, increase by
4 levels.” U.S.S.G. § 2C1.1(b)(3). Application Note 4 to § 2C.1
states that “[h]igh level decision-making or sensitive position
means a position characterized by a direct authority to make
decisions for, or on behalf of a government, department,
agency, or other government entity, or by a substantial influence
over, the decision making process.” At Walton’s sentencing
hearing, the district court found that “Walton had substantial
influence over the decision-making process of the
Land Bank based upon [its] review of the testimony.” The
court further found that “[t]he fact that others could review
Mr. Walton’s decision does not negate the fact that he held a
sensitive position.” Analogizing this case to United States v.
Hill, 645 F.3d 900, 906-07 (7th Cir. 2011), the district court
found that Walton was in a sensitive position under U.S.S.G.
§ 2C1.1(b)(3), and applied this enhancement to both Walton
and Johnson’s sentences.
We find no clear error here. Walton was the director of the
Land Bank, and in that capacity he had an inordinate amount
of discretion over the transfer of Land Bank properties. He
started and oversaw the process, drafted the resolutions that
were rarely questioned, and generally determined who
would acquire the City’s properties and whether the sale
would be through a cooperative nonprofit like IMAC. Even
though Walton was not the top of the DMD organizational
chart, he was one of 16-20 assistant administrators. While he
had supervisors that technically outranked him, his authority
Nos. 15-3830 and 16-1471 21
over the Land Bank was unique, and he certainly had substantial
influence over the decision making process.
The district court was correct to analogize this case to Hill,
645 F.3d at 906-07. In Hill, the deputy liquor commissioner in
East St. Louis (named Hill), was given the ability to accept and
review applications for liquor licenses and conduct background
checks by the mayor. Id. at 904. The mayor had the
ultimate authority for the issuance and renewal of liquor licenses,
and in Hill’s position, he could not establish policy,
did not supervise other employees, and was subject to the
mayor’s supervision. Such factors did not foreclose a finding
that a sentencing enhancement should apply. The district
court acknowledged that while Hill did not have a particularly
high-level position, he held a sensitive post and had
“substantial influence over the licensing process.” Id. at 907.
The same can be said for Walton’s position at the Land Bank.
While Walton did not have a high rank or title within the City,
he drafted resolutions recommending transfers of Land Bank
properties to specific buyers for specific prices at specific
times. Walton did not have overt influence over his superiors,
but his resolutions were scarcely scrutinized, giving him de
facto control over how and to whom Land Bank Properties
were sold. The record supports that Walton’s position was
sensitive, so the district court’s application of an enhancement
pursuant to U.S.S.G. § 2C1.1 was not clearly erroneous.3
3 We review for plain error whether the district court made a sentencing
error as to Johnson. The plain error standard is more deferential to the
district court than clear error analysis, and because we find that the defendants’
challenge to the district court’s application of U.S.S.G. § 2C1.1
fails to demonstrate clear error, it certainly fails under plain error analysis
as well.
22 Nos. 15-3830 and 16-1471
2. Amos Victims Were Vulnerable Victims
The defendants also argue that the district court erred by
applying the “vulnerable victim” enhancement of U.S.G. §
31A1.1(b)(I). A “vulnerable victim” is a victim who is “particularly
susceptible to the criminal conduct.” United States v.
Sims, 329 F.3d 937, 944 (7th Cir. 2003).
In concluding that the Amos Victims were vulnerable, the
district court stated:
The victims in this scheme, as we all know, were 14
Hispanic families who spoke little or no English. Some
were undocumented … and all had minimal experience
in conducting real estate transactions in the
United States … [E]ach had previously been the victim
of real estate fraud perpetrated by a different person,
and that made them particularly susceptible to this
type of fraud … They were told to bring cash, and they
would only accept cash. Again, the Court heard the testimony
of these individuals and feels that they were indeed
vulnerable victims and the two-level enhancement
should apply.
During the sentencing process, several victims testified regarding
the extent of the harm they suffered due to the fraud
inflicted upon them. Neither Walton nor Johnson refuted that
they should have known that the Amos Victims were vulnerable.
Now, according to the Defendants, the Amos Victims
were not vulnerable because they were afforded the services
of an interpreter through the Marion County prosecutor’s office
and got decent prices on their homes. We disagree. In fact,
the involvement of the prosecutor’s office likely bolstered the
Nos. 15-3830 and 16-1471 23
Amos Victims’ trust, making them more susceptible. And, the
so-called decent prices of the homes were 300% higher than
they should have been and higher than the cost originally
quoted by Walton – highlighting the desperation of the families
to secure a home and avoid homelessness. We find no error
in the district court’s finding of vulnerability.
The record makes clear that the Amos Victims were vulnerable
for all of the reasons enumerated by the district court.
They were undocumented, had poor (if any) English fluency,
had been previously victimized, were extremely low-income,
and were facing the threat of homelessness. The defendants
argue that the Amos Victims’ lack of English fluency did not
make them vulnerable. However, we agree with the district
court that the Amos Victims’ poor command of the English
language was one of many factors weighing toward vulnerability.
C.f. United States v. Esterman, 324 F.3d 565, 574 (7th Cir.
2003) (finding it was clear error to consider the linguistic factor
in isolation in determining that a savvy businessperson
was a vulnerable victim). Other factors included that they did
not have the bargaining power or real estate sophistication to
negotiate Walton and Johnson’s inflated price and they were
desperate to secure housing for their families. We find no error
in the district court finding the Amos Victims vulnerable
for the purposes of Walton and Johnson’s sentences.

Outcome: For the foregoing reasons, the judgment of the district
court is AFFIRMED.

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