Jon Harder Former CEO of Sunwest Management, Enters Guilty Pleas to Federal Fraud Offenses
Government’s Evidence Shows This Is the Largest Investor Fraud Case in Oregon history
PORTLAND, Ore. – Jon Michael Harder, 49, a resident of North Dakota, plead guilty today before the Honorable Michael Simon to one felony count of mail fraud and one felony count of money laundering.
Harder controlled a network of companies which bought, constructed, and managed a nationwide collection of assisted living facilities. At its height, the corporate organization that Harder controlled, Sunwest Management and its related companies, owned approximately 300 assisted living facilities, serving over 15,000 residents with an average age of 85. Harder admitted in federal court today that beginning in late 2007 through February 2008, he lied to more than 50 investors to obtain more than five million dollars. In committing his fraud, 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 entire scope of the defendant’s fraud will be determined by the court following a multi-day sentencing hearing set to begin on May 12, 2015. The government believes and intends to prove to the court that, beginning no later than 2006 and continuing through 2008, Harder defrauded more than 1,000 investors out of approximately $130 million, making this the largest investor fraud prosecution in Oregon history. The scheme to defraud was based on materially false promises made to investors, including that they would be investing money in specific assisted living facilities and that the Sunwest enterprise was a successful business. In reality, the money that investors thought was going into specific facilities was commingled with money coming in from all investors and banks and Harder laundered the proceeds of this fraud by diverting large amounts of money to support his lavish lifestyle. Additionally, at least as far back as 2006, Sunwest was losing millions of dollars despite Harder’s representations that Sunwest was a successful business.
“The scope of the defendant’s fraud is truly staggering, as are the effects it has had on the victims of his crime,” stated U.S. Attorney Amanda Marshall. “This conviction demonstrates that no one – regardless of title or position – is above the law and that individuals who steal and defraud investors will be held accountable.”
Under the terms of the plea agreement, the government will ask the Court to impose a sentence of not less than 15 years in prison and have the Court order the defendant pay full restitution to his victims.
“The FBI's investigation has proven that, over a number of years, Jon Harder was responsible for running one of the largest frauds in Oregon history,” said Greg Bretzing, Special Agent in Charge of the FBI in Oregon. “A fraud of this size brings with it many victims – more than 1,000 in this case. Today represents an important step as we work to bring justice to those victims, many of whom watched their life savings disappear.”
“Investment frauds such as the one perpetrated by Harder undermine the integrity of our economy causing a rippling effect of financial ruin and distrust,” stated Special Agent in Charge Teri Alexander of IRS Criminal Investigation. “But as destructive as this scam was to the overall economy, the untold harm to the victim investors is simply heartbreaking. IRS Criminal Investigation is devoted to fighting alongside our law enforcement partners to bring to justice those like Harder whose greed erodes the trust and pilfers the resources of would-be investors.”
This case was investigated by the U. S. Postal Inspection Service, Federal Bureau of Investigation, Internal Revenue Service, Criminal Investigation, and the United States Bankruptcy Trustee’s Office. The case is being prosecuted by Allan M. Garten, Senior Litigation Counsel, and Assistant U. S. Attorney Michelle Holman Kerin