Leaders of former Westhaven Group convicted of defrauding investors

2/12/2009

Once leaders of a large Toledo area real estate investment group, the former top executives of the now defunct Westhaven Group appeared in Lucas County Common Pleas Court Thursday to enter pleas for various criminal charges.

John Ulmer, the founder of Westhaven Group, his son, Scot Ulmer, and two employees, Anthony Garzony and Roger Morr, were each convicted of multiple charges of security fraud for defrauding investors over a period of years.

John Ulmer, 62, was originally charged with 37 counts, including racketeering. He pleaded no contest to 12 counts, including four counts each of sale of unregistered securities, false statements in the sale of securities, and failure to disclose the insolvency of the securities issuer.

The charges carry a maximum penalty of 108 years in prison and a $210,000 fine but as part of the plea agreement, the state will recommend a 10 year prison sentence and will not object to judicial release after five years.

Ulmer, who declined to comment after the lengthy hearing, will also be liable for $15,065,692.88 in restitution.

The charges were a result of accusations that each of the men violated state securities laws in defrauding nearly two dozen people who invested more than $1.6 million from 2002 to 2005. The victims listed in the charges are just a fraction of the investors who were bilked out of money during Westhaven s existence.

The company was shuttered in late 2005 by the Ohio Department of Commerce. Court appointed receivers have since worked to liquidate the company s assets and repay investors.

Scot Ulmer, 32, pleaded no contest to six of the 23 counts he was charged with and faces up 48 years in prison and a $90,000 fine. The recommended sentence for the younger Ulmer, who was president from 2001 until the firm s collapse, will be four years in prison with no objection after two years. He would also be liable for the more than $15 million in restitution.

Also entering no contest pleas was Roger Morr, 65, who served as an investment advisor for the company between January, 2004, and July, 2005. Morr was found guilty of four counts of the original 17 counts charged against him and could face up to 36 years in prison and a $70,000 fine.

The state recommended a sentence for Morr of four years in prison with no objection of judicial release after two years. Because he was with the company for a much shorter time, his restitution would equal $1,561,000.

The case against Garzony was dismissed and a new charge was filed against him. President of the company from 1998 to 2003, when Scot Ulmer took over, Garzony, 48, pleaded no contest to one count of the sale of unregistered securities and faces up to five years in prison.

Assistant prosecutors told Judge Stacy Cook that Garzony cooperated with the investigation and that the recommended sentence would be community control. Because of a five-year statute of limitations, the investigation covered a period back to April, 2003.

Judge Cook set a March 24 sentencing date.