Assisted living management firm charged with $300 million fraud
The Securities and Exchange Commission on Monday leveled charges against the Oregon-based company and its founder, Jon Harder. According to the SEC, Sunwest raised $300 million from 1,300 investors between 2006 and 2008. Investors thought they were purchasing partial ownership of one of Sunwest's facilities, and had been guaranteed an annual return of 10%, reports USA Today. Instead, Sunwest allegedly placed the money in one fund that it used to pay operating expenses, investor returns and other costs. Investors were never informed that many of the facilities they thought they had invested in were actually losing money, according to USA Today.
Sunwest Management had overseen more than 320 assisted living facilities in 34 states during 2007. But as of January of this year, more than 100 have been foreclosed upon, placed in receivership or declared bankrupt. The SEC was denied a petition to freeze Sunwest's assets and appoint a receiver to salvage some of the investors' money, but plans to move ahead with a lawsuit, according to USA Today.