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From left, court security officers Chuck Broshious and Roger Kerner handcuff former Westhaven executive John Ulmer after his sentencing. At right is his son Scot Ulmer, also sentenced yesterday.<br><img src=http://www.toledoblade.com/graphics/icons/photo.gif> <font color=red><b>PHOTO GALLERY</b></font>: <a href="/apps/pbcs.dll/gallery?Avis=TO&Dato=20090324&Kategori=NEWS02&Lopenr=324009998&Ref=PH" target="_blank"> <b> Westhaven Group</b></a>
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Ulmer given 10 years behind bars

The Blade/Dave Zapotosky

Ulmer given 10 years behind bars

Some came seeking time behind bars for the men who stole their life savings. Others wanted some any of that money back.

In a crowded Lucas County Common Pleas courtroom where generations of Westhaven investors were allowed to share stories of their losses, the onetime leaders of the county s largest residential property investment group tearfully accepted prison time for their roles in defrauding millions of dollars from hundreds of victims.

Each of these men made misrepresentations to unsuspecting people. Each of these men were too filled of pride to stop the damage that was being done. Each of these men were too greedy to stop, said Judge Stacy Cook prior to ordering the sentences.

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These sentences won t fix any of this for you, the judge continued, addressing those packed into the courtroom.

It will only serve to punish four men who lied to you and stole your money.

John Ulmer, 62, the founder of Westhaven Group LLC, was sentenced to 10 years in prison. His son Scot Ulmer, 32, and Roger Morr, 65, an investment adviser for the company, each received four years in prison.

The Ulmers were both ordered to pay $15,065,692.88 in restitution and Morr was ordered to pay restitution of $1,561,000. Each of the three men pleaded no contest Feb. 12 to multiple counts of securities fraud.

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A fourth defendant, Anthony Garzony, 48, who was president of the company before Scot Ulmer took the job in 2002, pleaded no contest to one felony count and was sentenced to five years of community control. Included in his sentence are 90 days of work release, 150 hours of community service, and $20,000 in restitution.

The more than two-hour sentencing hearing yesterday concluded the criminal case that began after Westhaven was shuttered in December, 2005, by the Ohio Department of Commerce. But it didn t resolve the financial ruin that the defunct company left behind.

In the business of buying, fixing, and selling properties, Westhaven attracted investors with the promise of a secured investment and high returns. Specifically, Westhaven promised that investor money was backed by the mortgage on a real property.

Only when the company dissolved did many investors discover that property on which they believed they owned a mortgage was in fact in someone else s name or in some cases did not exist.

Seven of the company s investors who had money in Westhaven at the time it was shut down shared stories of a once- trusted association with the men. That trust was betrayed when many of them learned that the investments that they counted on were nothing more than pieces of paper and empty promises.

[These men] are the Bernard Madoffs of Toledo, said investor Karol Gargac, referring to the former investment adviser recently convicted of one of the largest financial frauds in history.

I invested my kids college fund. We believed everyone benefited from the idea of fixing up homes, renting them out, and giving people a chance to own them.

Mrs. Gargac, who invested $44,000, added that she showed up in court to help put another name and face to a Westhaven investor.

Attorney Gerald Kowalski told Judge Cook that his firm was charged with amassing and liquidating Westhaven s assets to pay back investors.

He said that when he came on as court-appointed receiver, Westhaven had 275 investors and owed about $30 million in promissory notes. There was no money at all in any savings or bank accounts. At the time, Westhaven had about 235 properties and if liquidated on that day at full value, they would have earned about $18 million.

The operation of Westhaven constituted a classic Ponzi scheme, Mr. Kowalski said, adding that since at least 2000, the company s debts exceeded its assets.

The court-appointed receiver has since sold all Westhaven properties and distributed $8.6 million to the secured investors. The 101 investors who were not secured by a mortgage will likely receive nothing unless restitution is made, Mr. Kowalski said.

When crafting the sentences, Judge Cook followed the recommendations made by the prosecutor s office. Prior to the sentence, each defendant and his respective lawyer expressed remorse.

The elder Ulmer spoke of his childhood of poverty and referred to his financial rise as the American dream. He acknowledged that his violations of the law led them all to a courtroom.

He tearfully apologized to his son and family and at one point emotionally handed over his statements to lawyer Jerry Phillips because he could not finish. Mr. Phillips told Judge Cook that unlike Madoff s scheme, the men involved in Westhaven invested and lost everything as well.

Scot Ulmer and Morr became emotional when reading separate statements that both apologized to the victims and professed ignorance of the full extent of Westhaven s illegal activities.

The three men were handcuffed after the hearing and led from the courtroom by deputies.

State officials have said that after The Blade ran stories about former coin dealer Tom Noe and his investment with Westhaven, the Ohio inspector general began looking into the company.

Beth Lewandowski of the Lagrange Village Council said after yesterday s hearing that the forgotten victims were those who spent thousands of dollars working toward home ownership with a company that left them with nothing. Those people, unlike the investors, never had a day in court.

What they did to them was not illegal; it was immoral, but not illegal, she said.

It was the people Ms. Lewandowski spoke of who eventually led James Bohnsack to Westhaven s door. Saying that he had for several years watched the company helping folks realize their dream of becoming homeowners, Mr. Bohnsack said he and his wife met with the Ulmers and eventually felt comfortable making three investments.

The money was what the couple worked hard to save over a lifetime, he said.

For some years, the couple received returns and were able to live off them in retirement. He said each month s check stub contained a reference address of the property that Westhaven purchased with their money.

Then suddenly in November,, 2005, the state confiscated all the Westhaven books and records, and that particular part of our, and now my, regular income has stopped for some 40 months now, he said. My wonderful and beautiful wife was crushed by the news about what was happening to our life s savings. She literally lost the will to live and subsequently has passed away. I am now trying to put my life back together as best I can.

After the hearing, Mr. Bohnsack said that the fall of Westhaven was tough on everybody.

I agree justice was served, he said.

Contact Erica Blake at: eblake@theblade.comor 419-213-2134.

First Published March 25, 2009, 12:36 p.m.

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From left, court security officers Chuck Broshious and Roger Kerner handcuff former Westhaven executive John Ulmer after his sentencing. At right is his son Scot Ulmer, also sentenced yesterday.<br><img src=http://www.toledoblade.com/graphics/icons/photo.gif> <font color=red><b>PHOTO GALLERY</b></font>: <a href="/apps/pbcs.dll/gallery?Avis=TO&Dato=20090324&Kategori=NEWS02&Lopenr=324009998&Ref=PH" target="_blank"> <b> Westhaven Group</b></a>  (The Blade/Dave Zapotosky)  Buy Image
Karol Gargac, who invested her children s college fund with Westhaven, likened the sentenced men to Bernard Madoff.  (The Blade/Dave Zapotosky)  Buy Image
Former Westhaven executive Scot Ulmer sits alongside Roger Morr, who was an investment adviser with the firm. Both apologized yesterday and each was sentenced to four years in prison.  (The Blade/Dave Zapotosky)  Buy Image
The Blade/Dave Zapotosky
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