For now, Donald M. Johnson will pay $500 on the 20th of each month toward the more than $600,000 he owes the victims in his securities fraud case, with a full review of his assets, and the possibility that a receiver could be named by the court to oversee them, coming in late May.
Johnson, 59, of Porter, pleaded guilty to a single Class C felony charge of a broker-dealer registration violation, a deal under which Johnson will serve four years on probation and must pay $604,500 in restitution to all of his victims, not just the one from the guilty plea.
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If Johnson successfully pays his victims back and serves his probation, he can petition the court to have the case expunged from his record.
During a brief court hearing Tuesday, Porter Superior Court Judge Jeffrey Clymer also said that, minus court fees and other costs, the $10,000 cash bond that Johnson posted when he was first arrested and charged on March 24, 2014, will be split pro rata between his many victims toward his restitution.
Clymer reluctantly accepted Johnson’s guilty plea during a Jan. 25 court hearing in which his victims said he left them in financial ruin, he referred to them as his “friends” in a brief statement in court and prosecutors alleged he is hiding income and assets that could be used to pay back his many victims.
The plea hearing was supposed to include a plan for Johnson to pay back his victims but Clymer postponed that part of the hearing when Gabriel Brown, a special prosecutor with the Indiana Securities Division, proffered 33 exhibits that he said are public records about Johnson’s properties or own bank records.
Johnson, Brown said then, has a history of hiding assets and income. “There’s a concern that some of this might disappear,” Brown said during the January hearing.
Johnson, he added, was playing “word games” with a vacation rental and other properties, some of which are not in his name directly but which he does own. Johnson has a considerable amount of rental income he has not disclosed, and has moved more than $1 million through his personal and business accounts in recent years.
At the time, Clymer ordered Johnson “to not sell, transfer or give away any asset he has an interest in,” a point he reiterated Tuesday.
“That order stands,” Clymer said.
A review of Johnson’s assets will take place during a hearing at 10 a.m. on May 30. Those exhibits are due to Clymer by May 16, and any objections over them have to be filed with the court by May 23.
“I am not sure yet as we sit here now as to what property Mr. Johnson does or does not own,” Clymer said.
Clymer wants the issue of whether a receiver should be assigned to oversee Johnson’s properties and assets “to be fully argued” during the May hearing.
Johnson, appearing in court with his public defender Mark Chargualaf, confirmed for Clymer that he is physically able to work.
Johnson was initially charged in Porter Superior Court in March 2014 with 14 counts related to securities fraud, Class C felonies at the time. Two months later he was charged with one count of forgery, also a Class C felony, and two counts of theft, Class D felonies, in a related case.
An appellate court ruling trimmed that to 15 counts after determining that the statute of limitations had run out for one of the victim’s claims but the rest of the charges could stand.
The allegations stretch back to around 2007 and include multiple victims who, according to charging documents, lost hundreds of thousands of dollars in real estate investments gone bad when they did not get the returns they were promised and couldn’t get back the money they put into the deals.