United States v. Reginald Walton

In the

United States Court of Appeals

For the Seventh Circuit

____________________

Nos. 15-3830 and 16-1471

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

DAVID JOHNSON and REGINALD T. WALTON,

Defendants-Appellants.

____________________

Appeals from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 13-CR-00104 — William T. Lawrence, Judge.

____________________

ARGUED FEBRUARY 6, 2017 — DECIDED NOVEMBER 3, 2017

____________________

Before ROVNER and WILLIAMS, Circuit Judges, and CONLEY,

District Judge.*

WILLIAMS, Circuit Judge. The Indianapolis Land Bank was

created to improve the quality of life in Indianapolis neigh-

borhoods 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 conspir-

acy to engage in money laundering. Walton was also con-

victed 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 substan-

tial evidence that Walton and Johnson had specific intent, in-

cluding 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 instruc-

tions, 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 Wal-

ton was convicted for accepting bribes, not gratuities, and we

decline Walton’s invitation to overturn precedent to recon-

sider 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 decision-

making 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 Indian-

apolis 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 ac-

quiring and selling properties in the Land Bank. Once a prop-

erty 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 ques-

tion. 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 ap-

praisals. A secondary process was available only for nonprofit

organizations that met specified criteria. A nonprofit was eli-

gible 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. Eligi-

ble 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 non-

profits were qualified to take advantage of the lower pricing

scheme. There was no prohibition on eligible nonprofits re-

selling 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 opportu-

nities 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 com-

pany 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 iden-

tify valuable properties in the Land Bank and invited select

nonprofit organizations to purchase these properties for ei-

ther $1,000 or $2,500. He worked with nonprofits that he knew

would immediately transfer the properties back to Reed, Nap-

town, 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 prof-

its to Walton in cash.

The first properties Reed and Walton partnered to sell in-

volved 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 prop-

erty was purchased through TM&J Youth Foundation, a non-

profit operated by Shela Amos, which paid $2,501 for 2806

1

Delaware and $601 for 2810 Delaware. 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 stand-

ard 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 Nap-

town 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 co-

operating 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 under-

2

cover FBI agent “Jay Foreman.” 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 op-

erated, Sargent gave Walton a blank $500 money order. Fore-

man also sought to acquire Land Bank property through Wal-

ton 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 ear-

lier real estate transactions became unavailable, so they incor-

porated a new partner, David Johnson. Johnson ran the Indi-

anapolis Minority Aids Coalition (“IMAC”), an eligible non-

profit 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 or-

chestrated 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 ob-

tained 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 de-

veloper 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 pur-

chase their homes for either $1,000 or $2,500 through a non-

profit.

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 in-

dictment naming Walton, Johnson, Reed, Hawkins, and Sar-

gent. 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 de-

fendants, 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). Rever-

sal under this standard is rare because we defer heavily to the

jury’s findings and review evidence in the light most favora-

ble 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 re-

quired 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 finan-

cial 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 in-

tent 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 pres-

sure 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 buy-

ing 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 do-

ing 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 de-

cided 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 in-

tended to earn money from Land Bank sales. He admits in his

brief that he knew profiting from the sales of Land Bank prop-

erties 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 fi-

nancial 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 pros-

ecution 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) (af-

firming 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 govern-

ment’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 valua-

ble Land Bank properties at low cost. These actions estab-

lished 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 self-

dealing 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 Wal-

ton and Johnson worked with the Marion County Prosecu-

tor’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 ar-

ranged 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 negotia-

tion position of the parties, in that Mr. Walton would not gain

anything on the transaction.” There is no question Walton in-

tended 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 sup-

posed to be a party to the transaction. Cf. Weimert 819 F.3d. at

367–68 (finding no fraud where there was no undisclosed self-

dealing and all parties were aware of the defendant’s conflict

of interest). He, together with Johnson, purposefully swin-

dled the Amos Victims for personal gain. So, there was suffi-

cient 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 evi-

dence and found guilt beyond a reasonable doubt.” United

States v. Dingle, 862 F.3d 607, 614 (7th Cir. 2017). Because John-

son 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 Jack-

son 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 testi-

mony that Johnson knew the Land Bank properties belonged

to the City, knew Walton’s position with the City and poten-

tial conflicts, paid Walton a $4,500 cash kickback, and partici-

pated 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 gov-

ernment 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 re-

view 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 rec-

ord. 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 Jon-

son’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 instruc-

tion 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 instruc-

tions and had any objections to these instructions, counsel in-

dicated 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 forfei-

ture 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 harsh-

ness 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 for-

feited 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 is-

sues. 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 per-

mitted 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 offi-

cial duties.” Walton now asserts that this jury instruction al-

lowed him to be convicted for a “gratuity” offense and argues

we should overturn precedent to hold that 18 U.S.C. § 666 ex-

cludes 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 in-

struction 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 of-

ficial action. He also notes that the penalty for gratuities (un-

der § 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 cor-

ruptly 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 hypothet-

ical “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 oth-

erwise have done. We disagree. Evidence indicates that Wal-

ton steered properties toward partners who promised pay-

ments in favor a person who would not. Because Walton’s in-

tent 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 er-

ror 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 par-

ticular 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). Be-

cause Johnson and Walton were convicted of crimes that re-

quired the jury to find bad faith, and specifically the intent to

commit fraud, they were not entitled to an additional in-

struction for good faith.

C. No Errors in Sentencing

Walton and Johnson both bring challenges to the sen-

tences 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) (quot-

ing 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 in-

volved 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 influ-

ence over, the decision making process.” At Walton’s sentenc-

ing hearing, the district court found that “Walton had sub-

stantial 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 substan-

tial 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 back-

ground checks by the mayor. Id. at 904. The mayor had the

ultimate authority for the issuance and renewal of liquor li-

censes, 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 particu-

larly 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

3

pursuant to U.S.S.G. § 2C1.1 was not clearly erroneous.

3 We review for plain error whether the district court made a sentenc-

ing 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 de-

fendants’ 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 “partic-

ularly 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 experi-

ence 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 tes-

timony of these individuals and feels that they were in-

deed vulnerable victims and the two-level enhance-

ment should apply.

During the sentencing process, several victims testified re-

garding 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 vulner-

able.

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 of-

fice 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 fami-

lies to secure a home and avoid homelessness. We find no er-

ror in the district court’s finding of vulnerability.

The record makes clear that the Amos Victims were vul-

nerable 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 vulnera-

bility. C.f. United States v. Esterman, 324 F.3d 565, 574 (7th Cir.

2003) (finding it was clear error to consider the linguistic fac-

tor 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 er-

ror in the district court finding the Amos Victims vulnerable

for the purposes of Walton and Johnson’s sentences.

III. CONCLUSION

For the foregoing reasons, the judgment of the district

court is AFFIRMED.