BENTON – Developers of the Belleville Crossing retail center are accused of neglecting the property and spending shareholders' money on lavish living, according to a suit in U.S. district court.
Mark Maddox, of Indiana, filed the suit on May 27, for Diane Hamilton of Indiana, John Cardarelli of Massachusetts, and Brad and Monica Mason of Texas.
As defendants, Maddox named Jonathan Larmore, his company Arciterra Phoenix, four individuals from Arciterra Phoenix, and a company specific to Belleville Crossing.
Maddox also named Larmore’s wife, Michelle, and his mother, Marsha, of Indiana, as defendants.
He claimed Larmore formed a Belleville Crossing company in 2011.
He claimed the company sold common stock to about 177 investors, raising about $5 million through a private placement.
He added that the company qualified as a real estate investment trust and was subject to state and federal laws governing those trusts.
Maddox alleged Arciterra’s website stated it owns 83 properties in 24 states.
The website allegedly stated it has created 19 offerings raising about $187 million.
Maddox claimed that as a result of diversion of assets, the property fell into disrepair.
He wrote that tenants complain of weeds three feet tall in planting beds, trash throughout the property, leaky roofs, and no snow and ice removal.
He added that water service was disconnected for a time last September and insurance was terminated for a time in November.
“Defendants now find it nearly impossible to find vendors to provide necessary services to the Property because of its history of nonpayment,” he wrote.
Maddox claimed the defendants didn’t make timely efforts to sign and renew leases.
Tenants have allegedly waited for years for defendants to execute simple renewals.
Maddox claimed desirable tenants sought to occupy the property, but defendants didn’t pursue them.
Belleville Crossing was sold in a tax lien sale in November, the suit states.
Jonathan and Michelle Larmore allegedly purchased an 87 foot motor yacht in December for about $2.5 million.
Maddox claimed defendants defrauded more than 2,000 investors in various Arciterra offerings.
He added that none of them received dividends since 2019, and some have not received payments back to 2011.
Maddox claimed many investors in the initial offering in 2006 are elderly or deceased.
He also alleged that part of the defendants' scheme was to wait out investors until they succumb.
Maddox added that almost no one except the defendants know who the investors were.
“As a result it would be nearly impossible for investors to identify each other and unify in an attempt to recover their investments,” he wrote.
The court clerk randomly assigned Magistrate Judge Reona Daly.
She will preside unless a party declines consent to magistrate jurisdiction.
If that happens the clerk would assign a district judge.