In 2013, homeowners there sued the state, contending their private property extends all the way to the water.
A kayaker notified local authorities in Bloomington last month that a piece of property on Lake Monroe was clear-cut to the shoreline.
The property owners are under investigation for clearing the area of all vegetation. They could face thousands of dollars in fines.
A study of the Indian Creek watershed in Morgan and Johnson Counties finds that some contaminants are well above safe limits.