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Former Sunwest CEO gets 15 years for fraud; retirement centers operated in Southern Oregon

PORTLAND — The former head of an Oregon-based chain of retirement centers, some of which operated in Southern Oregon, has been sentenced to 15 years in prison for defrauding investors of $130 million.

Jon Harder was handed the sentence Tuesday in federal court in Portland.

Prosecutors said Harder operated what amounted to a Ponzi scheme, raising money from unsuspecting investors and banks during the collapse of his Sunwest Management chain of more than 300 assisted-living centers.

Harder pleaded guilty in January to mail fraud and engaging in monetary transactions in property derived from unlawful activity.

At one time, Sunwest operated several centers in Southern Oregon, including Eagle Cove Retirement and Assisted Living in Eagle Point, Morrow Heights on Wards Creek Road in Rogue River and three in Grants Pass — The Suites on Southeast Parkdale Drive, Spring Meadow Cottages on Shady Lane and Spring Meadow Retirement Community on Redwood Circle.

Sunwest also managed the Mountain View Retirement and Assisted Living facility in Ashland.

U.S. District Judge Michael Simon on Tuesday gave prosecutors the sentence they sought: 15 years. Harder's attorneys had asked for five years.

Salem-based Sunwest was hemorrhaging cash in early 2006, but Harder led investors, including many retirees, to believe it was thriving.

He went on a buying spree to hide company losses, acquiring more than 100 assisted-living centers at a rate of one a week.

Prosecutors said Harder defrauded more than 1,000 investors between 2006 and 2008, and did so while living a lavish lifestyle.

In a letter to Judge Simon, Harder apologized for the "carnage and problems" he caused.

"I know I was reckless by growing so quickly, and in using other people's money to do so, but I never intended to harm anyone," he wrote. "I wanted everyone connected with Sunwest to succeed."

The company went through a reorganization after Harder stepped aside in 2009. A private equity company bought most of the holdings, and investors eventually got some money back.

In a separate case, the U.S. Securities and Exchange Commission filed a lawsuit in 2009 that accused Harder of committing securities fraud. The SEC sought up to $190 million in civil penalties, but a judge struck down the attempt.