A prominent Indianapolis developer charged with 20 felonies in April has reached an agreement with prosecutors to plead guilty to two of the counts and repay victims $321,000.
Contrary to what was stated in an earlier version of this story, the plea agreement does not address whether the developer, Cornelius "Lee" Alig, CEO of Mansur Real Estate Services Inc., should serve prison time. The agreement, reached Nov. 24, states only that the Marion County Prosecutor's Office will not make a sentencing recommendation.
Alig, 60, had been scheduled to stand trial Thursday. He was charged in April with five counts of securities fraud (one class B felony and four class C felonies), four counts of being an unregistered broker-dealer (class C felony), four counts of selling unregistered securities (class C felony), two counts of forgery (class C felony), and five counts of theft (class D felony).
Under the plea deal, he has agreed to plead guilty to one count of theft, a class D felony, and one count of securities fraud, a class C felony.
Judge Sheila Carlisle has scheduled a guilty plea hearing for Dec. 8. If she accepts the plea, she likely would set sentencing for a later date.
It will be up to the judge whether to impose prison time. Alig faces a sentence between two and eight years on the two convictions, but she would have the discretion whether to suspend it or require he serve home detention, serve time in prison or serve time in another fashion.
Robert Hammerle, Alig’s lawyer, said he is pleased the prosecutor's office is not advocating prison time.
“The end result leaves everybody optimistic, including the victims,” he said. “Lee is held accountable and is still in a position where he can make immediate restitution.”
The plea agreement requires Alig to pay $106,000 to John Haskins of Firehouse Properties LLC, $95,000 to Dave Newcomer of Auction Broadcasting Co., $70,000 to John Watson of Core Redevelopment, and $50,000 to Steve Jones.
At least $100,000 of the restitution must be paid on the day of his sentencing, court documents said.
A probable cause affidavit alleged Alig made false representations when borrowing on eight promissory notes from 2008 through 2012.
Prosecutors alleged in an affidavit that Alig secured the notes with property he did not own or did not have permission to use as collateral. One of the notes was issued in April 2012, just weeks before Alig filed for personal bankruptcy, according to the prosecutor’s office.
Alig also was accused of forging a promissory note for $75,000 by using a former employee’s notary seal without permission and without having been registered as a broker-dealer with the Indiana Secretary of State’s Office.
Alig co-founded Mansur Real Estate Services with Harold Garrison in 1982. Garrison, who later parted ways with Alig and launched HDG Mansur, is facing his own financial troubles and filed for Chapter 11 bankruptcy in October.
Alig has developed several well-known commercial and residential projects in the downtown area, including Market Tower and WFYI’s headquarters on North Meridian Street.
His residential projects include Fall Creek Place, the Conrad Hotel condominiums and Janus Lofts on South Meridian Street.
Alig lost Janus Lofts after filing for Chapter 7 bankruptcy in 2012. SPCP Group VI LLC, which purchased the mortgage for the property from lender PNC Bank, is selling the building.
PNC had asked for a judgment of $3.2 million and the appointment of a receiver after a Mansur affiliate defaulted on a 2003 construction loan for renovations to the building, which previously housed Kipp Brothers Wholesalers for more than 50 years.
Alig also was a partner in Lockerbie Commons LLC, which owned and operated an office property at 255 N. Alabama St. The affidavit alleges Alig diverted for personal use rent payments from tenants that should have gone to Lockerbie Commons.
As part of his nearly three-year-old Chapter 7 bankruptcy, Alig is seeking to liquidate $11 million in personal debt.
Alig told IBJ in 2012 that his debt stemmed from the prolonged slump in the real estate market.