Ex-head of Ore. retirement chain accused of fraudThe former chief executive of a Salem-based chain of retirement centers has been indicted on charges he defrauded more than 1,000 investors of $130 million.
PORTLAND, Ore. (AP) — The former chief executive of a Salem-based chain of retirement centers has been indicted on charges he defrauded more than 1,000 investors of $130 million.
Jon Harder operated what amounted to a Ponzi scheme, prosecutors said, raising money from investors and banks during the collapse of his Sunwest Management chain of more than 300 assisted-living centers and related operations.
The company housed more than 15,000 people with an average age of 85.
Sunwest started to lose money as early as 2006, and as it collapsed, Harder went on a buying binge to mask its losses, acquiring more than 100 assisted-living centers at a rate of one a week, the indictment says.
Harder stepped aside in 2009, the company went through reorganization, and a private equity company bought most of the holdings. It has won accolades from a turnaround organization for righting the company's finances, The Oregonian newspaper reported.
“The indictment speaks for itself, depicting, as it does, a scheme to defraud that was massive in scope and devastating in impact,” prosecutor Allan Garten said.
Harder's lawyer in the criminal case, federal public defender Stephen Sady, said Harder had cooperated in the civil cases that arose from the troubles the 2008 recession caused his companies. “He fully cooperated and contributed his assets to successfully resolving the bankruptcy,” Sady said.
Harder was accused Wednesday in a sealed indictment and was to be arraigned Friday. Authorities said the 47-year-old had been living in North Dakota and surrendered Thursday in Portland.
The 56-count indictment also accuses him of laundering money to finance what prosecutors called “his lavish lifestyle.”
The 30-page indictment seeks a money judgment of $130 million and the forfeiture of significant real estate and other belongings, including stock options, ranch land in Deschutes County and beachside property in Lincoln County.
Harder filed for personal bankruptcy protection, and in 2010, he agreed to pay $4.2 million in fines to the Oregon Division of Finance and Corporate Securities.