A Midwest strip mall mogul is headed to prison after being found guilty of a massive fraud scheme perpetrated with WeWork securities days before the co-working company filed for bankruptcy.
The U.S. Attorney’s Office for the Southern District of New York on Tuesday announced Jonathan Larmore was sentenced to five years in prison for manipulating WeWork’s stock price. The Indiana man will also receive three years of supervised release and 500 hours of community service.
“Jonathan Larmore treated the stock market like a game he could rig to obtain instant riches at the expense of innocent investors,” Acting U.S. Attorney Matthew Podolsky said in a statement.
In the fall of 2023, Larmore created a sham real estate investment firm, Cole Capital, and spent $775,000 to buy WeWork call options and hundreds of thousands of shares of common stock. In November, he published a bogus press release, announcing Cole Capital was proposing to acquire a majority of all outstanding shares owned by a minority shareholders at a massive premium, an all-cash offer that would’ve been worth $77 million, had it been real.
At the time, WeWork was teetering on the edge of bankruptcy. Larmore never had the intent or ability to follow through on his offer, according to prosecutors.
As soon as the release went out, WeWork’s share price immediately jumped 70 percent and ultimately surged 150 percent above the pre-press release price. The call options Larmore held expired before the press release was published, though, keeping him from a payday worth tens of millions. WeWork filed for bankruptcy shortly thereafter.
A jury convicted Larmore in October following a weeklong trial and two hours of deliberation.
Larmore founded Arciterra Companies in 2005, which bought, renovated and refinanced strip malls. By 2023, the company had acquired more than 80 properties and was worth more than $600 million, only for rising interest rates to reduce valuations for residential and commercial properties, putting him on the defensive side of lawsuits brought by vendors and investors.
In one case, investors filed a federal lawsuit centered on Belleville Crossing, an Arciterra strip mall in St. Clair County, Illinois. They accused Larmore of using funds from 175 investors to finance a lavish lifestyle while neglecting lease renewals, regular bill payments and critical repairs on the property.
The U.S. Securities and Exchange Commission also sued Larmore in November 2023, accusing the strip mall mogul of misappropriating over $35 million from his company.
Read more
Commercial
National
Arciterra head accused of mismanaging investor money
Commercial
National
Strip mall mogul’s rise and fall ends with fraud conviction
Commercial
National
WeBankrupt: Crumbling co-working firm goes bust
