INDIANAPOLIS - In the wake of the Indianapolis Land Bank scandal, some leaders are saying city officials might have ignored red flags that the program was vulnerable.
The citizen president of the city's Metropolitan Development Commission said he warned city leaders months before an FBI raid that the Land Bank program was ripe for fraud.
The Indianapolis Land Bank program takes abandoned and foreclosed properties that had no buyers in the tax sale and makes them available to non-profit organizations for as little as $1,000.
Two weeks ago, the FBI seized Land Bank records and issued indictments against five men, including two city employees who allegedly sold properties at deeply discounted prices to so-called not-for-profits who then sold them for huge profits.
Metropolitan Development Commission President Ed Mahern said he raised a Land Bank red flag six months ago.
"I think there wasn't enough attention or manpower in the Land Bank to do what it was supposed to be doing. It wasn't supervised well enough," Mahern said.
The city has more than 1,200 homes in the Land Bank, properties with ongoing expenses that include maintenance, boarding and grass cutting. With the program on indefinite hold, the Land Bank has no revenue stream to help defray costs.
"It's a very unfortunate situation, but we have to continue to work toward a successful solution," said Adam Thies, director of the Department of Metropolitan Development.
A spokesman for the Mayor Greg Ballard's office said the city is working to rectify the Land Bank issues.
"At some level we have to trust our employees, and we do trust our employees, but we also want to make sure that all our processes are in place to protect taxpayers and protect the integrity of the Land Bank sale," said Ryan Vaughn, the mayor's chief of staff.
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