A two-day sentencing hearing begins today in the U.S. District Court in Portland, OR, for Jon Michael Harder, the former CEO of Sunwest Management, which at one point owned about 300 assisted living communities.
Harder is accused of defrauding investors of more than $130 million in what the U.S. Attorney’s Office for the District of Oregon is calling the largest investor fraud prosecution in the state’s history. U.S. prosecutors are seeking at least 15 years in prison for Harder, as well as three years of supervised release and full restitution for his victims. Defense attorneys are asking for a five-year prison term.
In January, Harder pleaded guilty to one felony count of mail fraud and one felony count of money laundering. He admitted to lying to more than 50 investors to obtain more than $5 million from late 2007 through February 2008. “Harder promised the investors that their money would go towards specific assisted living facilities when in fact the money was going to pay Harder’s personal expenses and the business expenses of other Sunwest entities,” the U.S. Attorney’s Office said in a news release at the time.
The government believes that, between 2006 and 2008, Harder defrauded more than 1,000 investors out of about $130 million in a Ponzi scheme. He originally was indicted in 2012 on 56 counts of mail fraud, wire fraud, money laundering and other charges.
Harder left Sunwest in 2009 as part of a company restructuring. The remaining ownership turned the company around, and the Blackstone Group, in a joint venture with Emeritus Senior Living and Columbia Pacific Advisors, bought several Sunwest properties in 2010 for more than $1 billion. HCP acquired the majority of those properties from Blackstone in 2012, and Emeritus continued to operate them.