Real estate mogul John Ulmer and his two sons are accused in a lawsuit of defrauding investors of the Westhaven Group and Haven Holdings and misspending business assets.
The lawsuit was filed yesterday in Lucas County Common Pleas Court by Gerald Kowalski, a court-appointed receiver handling the liquidation of the Westhaven Group, which the Ohio Department of Commerce shut down a year ago for securities fraud.
It claims Mr. Ulmer, who was the founder and owner of Westhaven, and his sons, Scot and Luke Ulmer, used the company's holdings to pay for personal expenses, such as maintenance of their homes, airline tickets, meals, and life insurance coverage.
An April report compiled by the receivers - Mr. Kowalski and John Czarnecki - calculated a $12 million shortfall in Westhaven's holdings.
In an accounting of the assets that was prepared for Common Pleas Judge Thomas Osowik, who is handling the receivership petition, the receivers estimate
that up to $16 million was left for distribution to 220 to 280 investors who are owed more than $28 million.
Among the allegations raised by the receivership in the lawsuit are:
•John Ulmer and Scot Ulmer illegally forged the signatures of investors to obtain releases on mortgages of property used in the business.
•Westhaven falsely led investors to believe they would share an interest in a $10 million insurance policy on John Ulmer when, in fact, investors were not named as beneficiaries.
•The Ulmers distributed among themselves $97,000 of a $343,000 insurance claim that was paid to the company for fire damages to offices on Renwyck Drive in 2003.
•Credit cards issued to Westhaven Group were used for the personal expenses of the Ulmers and the real estate seminar business of John Ulmer, and that the credit cards were used "practically on a daily basis" for nonbusiness related purchases, such as car washes, sporting goods, appliances, clothing, gasoline, car repairs, hotels, airline tickets, rental cars, groceries, dining, medical co-pays, and concert tickets.
Mr. Kowalski told The Blade that the civil complaint seeks to tap into the personal holdings of the Ulmers to return assets that were allegedly taken from the Westhaven Group.
"As soon as we are able, we will attempt to attach any assets that are allowed under Ohio law and attempt to garnish wages. We will take every effort to collect the assets that are permitted under Ohio collection laws," he said.
In the lawsuit, the receivers are asking Judge Frederick McDonald, who was assigned the lawsuit filed yesterday, to award compensatory damages in excess of $25,000 and prohibit the Ulmers from transferring or disposing of property, cash, assets, and other belongings.
In claiming that the Ulmers engaged in a pattern of corrupt activity, the plaintiffs also are seeking compensation under Ohio's civil racketeering statute, which allows the court to award triple damages in punitive awards.
The claims made in the lawsuit are based on findings in records held by the company. Mr. Kowalski said records pertaining to expenses prior to 2003 were destroyed in the fire.
When reached by The Blade, John Ulmer, of Ottawa Hills, referred questions about the lawsuit to attorney Jery Barton.
"I wouldn't want to comment on a suit we haven't had a chance to review yet," Mr. Barton said.
Scot Ulmer, who was president of Westhaven until the state intervention in December, 2005, and Luke Ulmer, a former employee of the firm, could not be reached for comment.
Staff writer Joshua Boak contributed to this report.
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