Chesterton Tribune

Local man's real estate license suspended for 90 days

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Local real estate agent Don Johnson’s license has been suspended, on an emergency basis and for 90 days, by the Indiana Real Estate Commission (IREC), in response to complaints received after Nov. 19, 2010, when the Attorney General’s Office filed a civil suit against him.

On March 11, the IREC voted 5-0, with two members abstaining, to issue a summary suspension order, under which Johnson must “immediately cease and desist all acts constituting practice as a principal broker” and must “surrender” all of his licensure, “including pocket licenses and wall licenses.”

The suspension will remain in effect for 90 days.

On Nov. 19 the Attorney General’s Office filed a 33-count suit against Johnson which accused him of multiple improprieties, among them:

•Engaging in material deception in the course of professional activities.

•Violating the Mortgage Rescue Protection Act and the Credit Services Organization Act by failing to obtain a surety bond, by failing to provide a written statement prior to contracting services, and by failing to provide homeowners written notice of their rights.

•Continuing to practice although “unfit to practice due to professional incompetence,” by failing “to account for and remit funds belonging to (a client) once the loan modification process was unsuccessful.”

•Engaging in material deception, by failing to notify a client, the owner of a property, that the property had been sold at a sheriff’s sale and continuing to collect rental payments from the tenants of the property.

•Engaging in material deception, by “forging a Fifth Third Bank letter.”

•Engaging in material deception, by hiring “contractors to clean out properties to reduce their value, only to have the same contractors re-install the items to make it appear that (Johnson) has made extensive improvements to the property to raise the selling price.”

Following the filing of that suit, the IREC stated in its March 11 suspension order, “a series of additional complaints” against Johnson was received, and on March 9 a hearing was held before the IREC to hear the Attorney General’s petition for summary suspension. Johnson did not attend that hearing nor was he represented by counsel, the IREC said.

“Kelly Reed, investigator for the Office of the Indiana Attorney General, testified” at that hearing “regarding an ongoing investigation into (Johnson’s) activities, including but not limited to: (a) failing to submit offers to purchase; (b) failing to stay current on mortgage payments for properties he manages, resulting in tenants living in homes that are in active foreclosure proceedings and pending a sheriff’s sale; (c) failing to properly maintain a management property, by canceling a homeowner policy, without the homeowner’s knowledge,” the IREC stated in its suspension order.

The IREC subsequently ruled that Johnson, “if allowed to continue to practice as a real estate principal broker in the State of Indiana, represents a clear and immediate danger to the public health, safety, or property.”

The Nov. 19 suit against Johnson was in fact the second last year to name him, the first one filed seven months earlier and alleging violations of the Credit Services Organization Act and the Mortgage Rescue Protection Fraud Act.

Johnson was previously disciplined in July 2008 by the IREC “for engaging in material deception in the course of professional services by utilizing false and misleading advertisements regarding mortgage debt forgiveness.” Johnson’s real estate principal broker’s license was placed on indefinite probation at the time and was still on probation when the IREC suspended it on March 11 for 90 days.


Posted 3/16/2011