Columbia developer is sentenced to 2 1/2 years for fraud Issel must repay partners $135,808

September 01, 1993|By Alan J. Craver | Alan J. Craver,Staff Writer

A developer of Columbia office buildings was ordered to serve 2 1/2 years in prison for taking $135,808 from one of his partnerships and using the money to cover personal expenses.

Peter Issel, 52, of the first block of E. Lee St., Baltimore, was sentenced in Howard Circuit Court on Monday to eight years in prison with all but 2 1/2 years of the sentence suspended.

Issel, who headed MGI Associates Ltd., also was ordered by Judge James Dudley to complete five years of probation and repay his partners a total of $135,808. Issel faced a maximum sentence of 10 years in prison.

The sentence issued by Judge Dudley went beyond the prosecutors' recommendation. The state attorney general's office suggested that Issel be sentenced to five years in prison, with all but 18 months suspended.

The attorney general's office recommended the sentence in part to deter people from committing white-collar crimes.

MA "You can only hope that people who know him or read about him

will think twice before they abuse the trust that is placed in them," said Assistant Attorney General Christopher Romano, who prosecuted the case.

Issel is to begin serving the sentence Sept. 10. Neither he nor his attorney, George Bendos of Baltimore, could be reached for comment.

Issel pleaded guilty to fraudulent conversion of partnership money in June after the attorney general's office charged him with diverting $135,808 from an account for MGI Associates, which developed the MONY Building in Columbia.

Prosecutors contended that Issel took the money between 1985 and 1988, using it to cover debts for other development partnerships, buy property in Delaware, and make credit card, car and mortgage payments.

Issel told prosecutors during an interrogation that he took the money as a loan, but prosecutors never found promissory notes or other documents to support the claim, court papers state.

Before entering the development business, Issel served a 90-day prison sentence for embezzling $12,000 from his former employer, the Maryland National Bank, records say.

"Obviously, this 'slap on the wrist' has failed to deter the defendant from engaging in similar-type activities," Mr. Romano said in court papers.

Between 1980 and 1990, Issel Development Co. and related partnerships built office buildings in the Baltimore area, including the Woodmere complex in Columbia, a building at Columbia Gateway and the Security Office Park in Woodlawn.

The state began to investigate Issel in 1990 after receiving complaints of wrongdoing from one of his colleagues. That year, Issel filed for bankruptcy and resigned from his other partnerships.

Judge Dudley received several letters from former investors in Issel's partnerships requesting a harsh sentence for the developer.

"In my opinion, Mr. Issel is a very cunning manipulator of people as well as money," said one woman from Chevy Chase.

"I believe him to be amoral and I think innocent, trusting people need to be protected from people like this," she wrote.

The woman estimated that her family lost about $250,000 after investing in one of Issel's projects.

Judge Dudley also received letters in support of Issel, including one each from his mother-in-law and from a former state assistant attorney general.

"I am convinced that the actions he took were motivated not by personal greed, but by a desire to keep weaker properties afloat," said Meg Rosthal, a lawyer in Erie, Pa.

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