Feds charge ArciTerra owner with $35M fraud

The SEC is accusing him and his real estate investment company, ArciTerra, with fraud in what it called a $35 million scheme.

"ArciTerra Companies LLC and its CEO, Jonathan M. Larmore, (engaged) in a multi-year scheme to misappropriate millions of dollars of investor funds from investment vehicles that ArciTerra managed," the SEC stated in a news release.

Federal authorities are also accusing him of attempting stock manipulation in late November.

Larmore was the owner of Fishermen's Village until earlier this year. While Fishermen's Village remains open, it is technically in foreclosure after U.S. Bank filed documents against Larmore in July.

The year 2023 has been a free fall for Larmore, which started locally when Punta Gorda officials nixed his plan for a hotel and more residential units in the city.

But, according to civil lawsuits and federal paperwork, his firm's financials have long been weakened, even as his personal wealth seemed strong. His expansive real estate investments dotted the nation, from Florida to Arizona to Indiana.

"Since at least January 2017, Larmore and the charged entities misappropriated more than $35 million from private real estate funds and other investment vehicles that ArciTerra managed," an SEC news release stated. "Larmore allegedly used a substantial portion of the misappropriated funds to pay for his family members' personal expenses and to fund a lavish lifestyle of private jets, yachts, and expensive residences."

CIVIL LAWSUITSome of the SEC allegations are similar a civil lawsuit filed in late May.

Larmore was sued on allegations he used company funds for a luxury yacht and more than a dozen homes, along with a six-figure birthday party for a family dog.

The lawsuit, filed in Illinois on behalf of investors, alleges Larmore's Arizona-based company was involved in a scheme to "wait out" investors until they die or give up hope of recovering any of their investment.

The lawsuit was filed in Illinois, where one of his commercial mall properties was falling into disrepair in Belleville, Illinois, according to the civil complaint.

It states about 2,000 people had invested in the company and none had received dividends in years.

Some of the plaintiffs have voluntary dismissed their portion of the lawsuit.

A Louisiana judge placed six of his properties with a receiver, according to Madison-St. Cloud Record, an Illinois newspaper covering the lawsuit.

Larmore announced in April he was attempting to sell off assets as part of a divorce settlement with his wife, Michelle, who is also named in the lawsuit.

ArciTerra owns 83 properties in 24 states, according to its website.

Its website is currently offline.

Larmore previously told The Daily Sun that Fishermen's Village brought in $47 million in revenue in 2022. Earlier this year, in a text to The Daily Sun, he blamed former employees for his issues.

Former workers "helped and promoted are causing chaos and are tortiously interfering with my business," he wrote.

The Daily Sun has reached out to Larmore's attorney. A message to his attorney, based in Chicago, was not returned Tuesday afternoon.

BUSINESS AS USUAL Despite the foreclosure and other issues Larmore faces, the small-business owners at Fishermen's Village are undeterred, General Manager Patti Allen said.

"Fishermen's Village is in a state and federal receivership," she said. "Both have protected the assets at Fishermen's Village. They recognize it as a gem in Punta Gorda and all of Charlotte County. They have worked with us and protected us. Therefore, it's business as usual here."

Allen said any "offers" on Fishermen's Village are currently being entertained.

And any of Larmore's financial and other "issues" aren't impacting Fishermen's Village, she said.

Meanwhile, Allen said the merchants had a "better than expected" holiday at Fishermen's Village.

"We are also looking forward to our continued partnership with Sunseekers Resort," she said. "We are already seeing more traffic from the resort. We are working with them for conferences at the resort."

Allen said Fishermen's Village is ringing in the new year with fireworks for the community.

There's a family friendly event from 6 p.m. to midnight on Dec. 31.

"Every year, hundreds join the celebration and dance until the clock strikes midnight," she said, adding there are family and interactive activities, live music, face-painting and more.

'LAVISH LIFESTYLE'Larmore and others at ArciTerra breached their duties after using investors' money "to fund their unbelievably lavish lifestyle," the civil lawsuit states. The company raised about $187 million in capital through more than 2,000 investors, though some haven't received payments since 2011. No investors have received a dividend payment since 2019, the lawsuit states.

During that time, the Larmores stockpiled luxury assets, according to plaintiffs.

The couple owns a dozen homes throughout the United States. They have two personal aircraft, including a Cessna Citation jet and a Gulfstream G1V bought in 2019 and then upgraded to a G400 in 2021 at a cost of $8 million, the lawsuit states. Following the tax lien sale in December 2022, Jon and Michelle Larmore bought an 87-foot Cheoy Lee yacht for $2.5 million, the lawsuit states.

The lawsuit claims Larmore diverted funds from company properties to assets owned by the Larmores that have "flourished." That included Fishermen's Village, which has been the recipient of tens of millions of dollars in improvements.

STOCK MANIPULATION?But federal authorities state Larmore attempted to manipulate a stock.

"Larmore and Cole Capital Funds LLC, an entity Larmore formed and controlled, issued a press release in November 2023 falsely stating that Cole Capital intended to purchase 51 percent of all minority ownership shares in WeWork, Inc., an unrelated public company, at $9 a share, more than nine times WeWork's then-current trading price," the SEC stated.

After that, the WeWork stock rose almost 150% in after-hours trading.

"Larmore purchased more than 72,000 call options in WeWork at a price far below the stock price in the days before the press release was published, hoping to execute the trades at profit after manipulating the stock price," federal authorities stated. "However, due to a delay in the issuance of the press release, most of the options expired before Larmore could exercise them."

The SEC complaint was filed in U.S. District Court in Arizona. ArciTerra is based in Phoenix.

It charges Larmore, ArciTerra and related entities that Larmore controlled with violating federal security laws, including antifraud provisions.

Federal authorities want "permanent injunctive relief, the appointment of a receiver, disgorgement and prejudgment interest, and a civil penalty, and other relief," it stated in the news release.

The SEC investigation is ongoing, it stated.

"As the complaint alleges, instead of protecting client assets, Larmore and his related entities took advantage of investor trust for his and his family's personal gain," SEC Asset Management Unit Co-Chief Andrew Dean stated in the news release. "Protecting investors from fraud by their financial advisers is a priority for the SEC, as is protecting the market from false press releases aimed at manipulating the stock of a publicly traded company for personal gain and leaving unknowing investors to lose out."