Longtime developer Alig charged with 20 felonies

A prominent Indianapolis developer who filed bankruptcy in 2012 has been charged with 20 felonies and is accused of illegally receiving $340,000 from several victims through a securities fraud scheme.

Marion County Prosecutor Terry Curry announced the charges Tuesday morning against Cornelius “Lee” Alig, 59, CEO of Mansur Real Estate Services Inc.

Alig, who is set to appear at an initial hearing Tuesday afternoon, has been charged 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).

A probable cause affidavit alleges Alig made false representations when borrowing on eight promissory notes from 2008 through 2012.

Curry alleges in the 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 is 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.

Individual victims lost as much as $95,000, Curry said in the release.

A phone call to Alig’s office seeking comment was not immediately returned.

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 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.

Among the debts he defaulted on was a $400,000 loan he received in 2008 from Columbus, Indiana-based Indiana Bank & Trust. Evansville-based Old National Bank assumed the loan when it acquired the institution in 2012.

Alig and three siblings had secured his loan by mortgaging a 3.4-acre property near Highland Country Club on the northwest side of Indianapolis. But after Old National sued to foreclose, the siblings filed court papers saying they hadn’t signed the mortgage or authorized their brother to do so on their behalf.

If the siblings’ allegations proved to be correct, Alig obtained the loan “by false pretenses, false representations and/or actual fraud,” Old National alleged in a suit it filed against him in January 2013 that remains pending.

The prosecutor’s investigation of Alig began in 2012 and was led by the office’s grand jury division.