A local grand jury has handed down a 33-count indictment of Ray Marshall and James Brodie, two officials with LandCo Equity Partners, the firm at the center of the city's deal with the U.S. Olympic Committee, in connection with a real-estate scheme that led to two civil lawsuits that were settled and sealed a year ago.

The charges contained in the indictments, which were released Wednesday morning, include a violation of Colorado's Organized Crime Act, a Class 2 felony; securities fraud charges, Class 3 felonies; and theft charges, also Class 3 felonies.

(Click here to see the complete indictments.)

The 15-page indictments outline a pattern of racketeering in which Marshall and Brodie are accused of defrauding 15 people of money through deception that involved several enterprises, among them Bradley Road Investments LLC, Mount Vernon Estates Land Holding LLC, 8th and 24th LLC, Milam Centers LLC, Venetucci LLC and LandCo Springs Creek West LLC, all of which are associated with LandCo. The charges cover a period from September 2006 to March 2007.

Both Marshall, 45, and Brodie, 41, were arrested Wednesday morning after voluntarily surrendering to authorities. They have posted bonds of $50,000 each and are set to appear in court on Wednesday, Dec. 2, for advisements. Marshall is chairman of the board, and Brodie the CEO, of LandCo.

"It's shocking to learn that," Vice Mayor Larry Small said when told of the indictments. "We had no idea whenever we were in the business relationship with [Marshall] of any of those activities or any of the past activities, but I think the lesson learned out of that is maybe we need to do a little better financial checks on the people we do business with. ... We probably should do that on anybody that we qualify to do business with. I know that's pretty much the standard in the private sector."

The grand jury didn't indict Mayor Lionel Rivera, who earlier this year survived a city Ethics Commission conflict-of-interest investigation for his handling of Marshall's money in 2007 as he was about to consider USOC proposals from several developers, including his client, Marshall.

Rivera, who's term-limited in 2011 from his city post, has expressed interest in running for an El Paso County commissioner seat next year and now can do so without a criminal investigation hanging over his head.

The city's deal with the USOC began in fall 2007 with LandCo being chosen for the city's agreement to keep the USOC headquarters in Colorado Springs. That agreement fell apart in late 2008 as Marshall was being sued by investors in other projects. Still, the city stuck by LandCo and struck a new deal, even after Marshall sued the city and the USOC for breach of contract.

That pact recently culminated in the city's issuance of $31.5 million in debt in October to buy a downtown building at Tejon Street and Colorado Avenue from LandCo. The deal allows LandCo to retain the building's ground floor and basement level, with the USOC occupying the upper five floors.

Using debt money and private donations, largely from El Pomar Foundation, the city also agreed to pay $13 million to improve the Olympic Training Center at Boulder Street and Union Boulevard. In addition, the deal required the city to remodel a former Utilities Building west of downtown to house USOC's national governing bodies.

"Marshall had an extensive company, so to have it just be those two people, it's good to know it didn't go deeper into the company," Small added, saying the indictments still might affect LandCo in other ways. "I think the impact it's going to have would be on their ability to find a tenant for [its portion of the Olympic office building], and you also have to wonder if it will remain in their ownership because there are liens on those two floors. Whoever owns the lien on it is going to be looking seriously at it, too."

Small labeled the 33 counts as a "pretty serious indictment, and yeah, you have to be a little concerned about that."

The indictment notes that investors in Colorado Materials Holding Corporation weren't told of Marshall's 1997 bankruptcy. Investors in other enterprises weren't told that the holding corporation filed for bankruptcy in 2003, and none of the investors were told of Marshall's litigation with the IRS that resulted in a federal tax lien being imposed against Marshall in October 2008.

Marshall's attorneys, Pamela Robillard Mackey and Jeffrey S. Pagliuca, released a statement saying, "Ray Marshall is not guilty of any crime. For years Ray has brought jobs and development opportunities to our community. ... It is unfortunate that scarce government resources are being wasted in the prosecution of an innocent man."

— zubeck@csindy.com, stanley@csindy.com