Former assisted living CEO indicted on $130 million in fraud

The former chief executive officer of Sunwest Management is facing federal money laundering and fraud charges alleging a $130 million swindle in investor capital.

Jon Michael HarderJon Michael Harder, 47, voluntarily surrendered to federal authorities in Oregon, who had issued a warrant for his arrest. Harder pleaded not guilty at his federal arraignment Thursday, amid indictments that include more than 50 counts of financial crimes, including money laundering, mail fraud and wire fraud, according to the Portland Tribune.

Harder is accused of defrauding 1,000 investors of approximately $130 million between 2006 and 2008, through a Ponzi scheme that laundered money among Sunwest’s complex network of investors and banks. He also is accused of using investor funds to support his own lifestyle.

Sunwest, once the fourth-largest assisted living company in the United States, operated more than 300 facilities at its peak but fell on hard financial times during Harder’s tenure. Most of Sunwest's facilities were purchased in 2010 by The Blackstone Group.

In 2008, Harder also was vice president and majority shareholder of another company, Canyon Creek Development, whose primary portfolio was the development of long-term care properties. By September 2009, a cease and desist order lists him as having “a 20% or more controlling interest in more than 490 limited liability companies and corporations including Canyon Creek Development, Sunwest Management, Canyon Creek Financial, Senior Living Properties II, Senior Living Properties III, Silver Insurance, and Encore Insurance.”

Photo: Official police photo, Multnomah County Jail, Oregon

Topics: Executive Leadership , Finance , Leadership , Risk Management