Jonathan Larmore, a Midwest strip mall tycoon, has been found guilty in New York of perpetrating a fraudulent tender offer of $77 million for WeWork — an attempt to cash in options he’d purchased days before the co-working company filed for bankruptcy in November 2023.
After a weeklong trial and only two hours of deliberation, a jury convicted Larmore, 51, this week, Bloomberg reported.
Larmore is facing 20 years in prison on each of multiple counts, although white-collar criminals rarely receive statutory maximums. A sentencing hearing is scheduled for March 4.
Prosecutors from the Southern District of New York said Larmore bought thousands of WeWork stock options in the days before Cole Capital Funds LLC, a company he controlled, offered to buy WeWork stock at $9 per share, sending the stock value soaring by 150 percent in November 2023.
In a fateful timing miscalculation, Larmore published a press release announcing the offer, only to see the options expire hours before the stock’s rise, prosecutors said. Larmore stood to make millions of dollars from the transaction.
Attorneys for Larmore told the outlet they plan to appeal the verdict.
Larmore in 2005 founded Arciterra Companies, which bought, renovated and refinanced strip malls. By 2023, the company had acquired more than 80 properties and was worth more than $600 million. But rising interest rates reduced valuations for residential and commercial properties, and Larmore found himself on the wrong side of lawsuits by vendors and investors.
Last year, investors filed a federal lawsuit centered on Belleville Crossing, an Arciterra strip mall in St. Clair County, Illinois, accusing Larmore of using funds from 175 investors to finance a lavish lifestyle while neglecting lease renewals, regular bill payments and necessary repairs on the property.
The suit alleged that more than 2,000 Arciterra investors hadn’t received payments since 2019, with Larmore preferring to “wait out” his benefactors until they gave up or died, Bloomberg reported.
Arciterra had raised approximately $187 million through more than 19 investment offerings over the past decade, money which the lawsuit claimed was funneled to such expenses as private jets and an extravagant birthday party for Larmore’s dog.
Along with the federal lawsuit, the U.S. Securities and Exchange Commission sued Larmore in November 2023, accusing the strip mall mogul of misappropriating over $35 million from Arciterra. The agency has accused Larmore of raising $45 million from more than 1,000 investors, while issuing notes promising 8 percent annual returns.
In December 2023, a court-approved receiver took over Arciterra to collect rent, make loan payments, and potentially sell assets and return money to investors. As of June, the receiver was actively managing 39 Arciterra properties.
— Caroline Handel
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