The biggest revelation at Donald M. Johnson’s plea hearing Thursday might not have been that his victims said he left them in financial ruin, or that he referred to them as his “friends” in a brief statement in court, but that prosecutors allege he is hiding income and assets that could be used to pay back his many victims.
Porter Superior Court Judge Jeffrey Clymer reluctantly accepted a guilty plea from Johnson, 59, of Porter, on 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.
If Johnson successfully pays his victims back and serves his probation, he can petition the court to have the case expunged from his record.
“This plea creates a tremendous incentive to get the victims paid for the first time in 12 years,” Clymer said. “Is it fair? I don’t know. Is it the best thing that can happen today? Yes.”
When the hearing turned to restitution and setting a monthly payment for Johnson to pay his victims, his public defender, Mark Chargualaf, offered up federal tax returns for the past five years.
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, flabbergasting Chargualaf.
Johnson, Brown said, has a history of hiding assets and income. “There’s a concern that some of this might disappear,” Brown said.
Johnson, Brown said, is 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.
If Johnson hasn’t disclosed the income to his defense attorney, Brown said, “that is on Mr. Johnson.”
The disclosure pushed the portion of the hearing on restitution to 10 a.m. Feb. 20. In the meantime, Clymer ordered Johnson “to not sell, transfer or give away any asset he has an interest in.” Additionally, prosecutors must turn over any other assets they find to the defense.
“Don’t test me,” Clymer, his patience clearly worn thin by Johnson, said at one point in the hearing. “If you do, I can’t prejudge anything but I just sentenced you to four years of probation. If you sell any property, I will send you to prison.”
Johnson, under questioning from Clymer, said he understood.
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.
Earlier in the hearing, three victims took to the stand to tell the court about their financial interactions with Johnson.
One woman, who wept through much of her victim impact statement, said Johnson approached her at a time when she was most vulnerable, because her then-husband had been charged with sexually abusing one of her children and she was going through a divorce.
She gave him $25,000 for a loan modification that never took place and subsequently lost her home, forcing her and her children to move. Her children eventually went to live with another relative. Because of her ruined credit, she has “extreme difficulty” getting loans, housing and employment.
“Mr. Johnson not only stole my money. He stole a portion of my life with my children that I will never get back and all because I trusted him with this investment,” she said.
Another woman said she met Johnson through her church, where he was an elder “who played Jesus Christ in every play.” She trusted him when she invested with him with her retirement savings, though she was working at the time.
Looking directly at Johnson, who stared straight ahead as his victims shared their stories, she blamed Johnson for his deception and took him to task for the money he spent on attorney fees.
“You could have paid us money back and had money for yourself,” she said.
Clymer picked up that point later in the hearing, after Johnson provided a brief statement to the court and the handful of his victims who attended the hearing.
He, too, noted how much Johnson has spent on attorneys in the case, including the $150,000 he paid two Indianapolis attorneys who withdrew from the case in August. Johnson tried unsuccessfully to have that money returned; Clymer said it could have been used to pay his victims.
“I’m truly sorry and I’m saddened that I was not able to pay my friends 10 years ago,” Johnson said, noting the 2008 financial crisis and 15 years of court actions. He was accepting the plea, he said, “so I can focus on repaying my friends to the best of my ability.”
Clymer lashed out at Johnson’s statement and said he was running from his actions.
“There’s no one responsible for your actions but you,” Clymer said, adding Johnson has yet to take responsibility for what he did.
While Johnson has a clean criminal record beyond the security fraud charges, Clymer said the charges against him are quite serious.
“I reluctantly — very reluctantly — accept the guilty plea,” he said.
Johnson’s actions speak louder than his words, Clymer said, and he doesn’t place a lot of value on what Johnson says, including his apology to his victims.
“If you really were sorry, you would have done something since 2007 to pay them back. I don’t believe you’re sorry,” Clymer said. “You did everything you possibly could to delay the trial for nine years.”