Former Indiana man indicted on fraud charges
Alleged to have swindled friends and acquaintances out of nearly $1 million
Indianapolis - United States Attorney Josh J. Minkler, announced today nine fraud-related charges against a former Indiana man who owned a business in Indianapolis. Larry M. Westby, 64, currently residing in Vanderbilt, Michigan, was indicted by a federal grand jury sitting in Indianapolis on five counts of mail fraud, three counts of money laundering and one count of fraud in the offer or sale of securities.
“Perpetrators of fraud crimes not only jeopardize their victims’ financial security, but they also rob their victims of the trust they once had in their own judgment and in others,” said Minkler. “When a person or business intentionally deceives Indiana investors with promises of financial benefits that do not exist, were never intended to be provided, or were misrepresented, they will be prosecuted by this office to the fullest extent of the law.”
Westby was a licensed respiratory therapist and president of LMW, Inc., a company purported to be selling respiratory therapy protocols to doctors. The protocols allowed doctors to perform treatments inside their own offices, rather than in a hospital.
In January 2010, Westby began using the LMW website to communicate with current and potential LMW investors indicating he was exploring selling his company for a substantial profit. In these communications, Westby allegedly made false statements about the nature of LMW, its financial condition, and the risk and status of investments in LMW. For example, Westby allegedly told potential investors that LMW was about to be sold for $36.5 million to a company called Global Spot in an effort to convince investors to buy LMW common stock. Unbeknownst to investors, Global Spot was a non-existent, sham entity. Westby also concealed from his investors that he had not registered LMW with the Indiana Secretary of State as a company properly registered to engage in the issuing of stock certificates. Nor did Westby tell investors that he had failed to properly register LMW common stock certificates with the Secretary of State.
Through these false communications, Westby took in more than $985,000 from his investors, which funds he then used to purchase two vehicles, repay a personal loan, pay personal credit card bills, and buy a vintage basketball court for his home.
IRS Criminal Investigation Special Agent in Charge, James D. Robnett stated, “IRS Criminal Investigation did what we do best…follow the money! IRS CI plays a critical role in locating the money and prosecuting the offenders who steal from honest Indiana investors.”
W. Jay Abbott, Special Agent in Charge of the Indianapolis Office of the Federal Bureau of Investigation, stated, "Today's arrest sends a clear message that illegal business practices will not be tolerated. The Federal Bureau of Investigation and our law enforcement partners will continue to aggressively pursue individuals who steal from honest, hardworking Americans."
This case was jointly investigated by the Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation and the Indiana Secretary of State.
According to Assistant United States Attorney Tiffany J. McCormick who is prosecuting this case for the government, Westby faces up to 20 years imprisonment if convicted.
An indictment is only a charge and not evidence of guilt. All defendants are presumed innocent until proven guilty in federal court.