Tuesday, March 3, 2009
Oregon Exec & Company Charged With Running $300 Million Ponzi-Type Investment Fraud Scheme
The Securities & Exchange Commission yesterday charged Sunwest Management of Oregon and its former CEO, Jon M. Harder, with securities fraud in connection with the alleged operation of a Ponzi-type investment fraud scheme. The SEC alleges that Sunwest and Harder "lied to investors" and concealed the true level of risk, exposing them to "massive losses." Sunwest, a retirement home operator, raised $300 million from investors between 2006 and 2008 to use as a downpayment on 100 retirement homes. Investors were told that they were purchasing shares in individual homes and would make a 10 percent return. However, Sunwest and Harder co-mingle the funds when more than half lost money, to pay off earlier investors. When the credit markets turned last fall, the scheme collapsed and all 100 properties were foreclosed upon.