The former CEO of a Salem, Oregon senior housing owner, developer and management company is changing his plea today in a U.S. District Court, as he stands accused of defrauding more than 1,000 investors out of $130 million from an alleged Ponzi scheme that ran from 2006 to 2008.
On Thursday, ex-Sunwest Management President and CEO Jon Michael Harder will change his plea from “not guilty” to “guilty” to one count of mail fraud and one count of money laundering before U.S. District Judge Michael Simon of the District of Oregon.
Terms of the plea agreement specify that Harder may not seek a prison sentence of less than five years, nor can prosecutors seek a sentence greater than 15 years, according to Allan Garten, lead prosecutor in the case with the U.S. Attorney’s Office.
Harder, whose criminal trial has been postponed several times—most recently until May 2015—was indicted in 2012 with money laundering and multiple counts of fraud charges.
The indictment alleged that Harder controlled a network of companies, which bought, constructed and managed a nationwide collection of assisted living facilities, which at its height owned approximately 300 total facilities serving over 15,000 residents with an average age of 85.
Essentially accused of running a Ponzi scheme, Harder allegedly collected millions of dollars from both investors and banks. Supposedly meant to be used for acquiring new assisted living facilities, in reality, the funds were used to pay guaranteed returns to earlier investors, according to the original indictment from September 2012.
The money that investors thought was going into specific facilities was commingled with money coming in from all investors and banks. Prosecutors also alleged that at least as far back as 2006, Sunwest was losing millions of dollars.
As a result of this alleged conduct, Harder was charged with 25 counts of mail fraud, 11 counts of wire fraud and 20 counts of money laundering.
A hearing on the scope of the fraud is expected to take place in May, with a final sentencing hearing slated for November, Garten said in an article from the local Statesman Journal.
The government is seeking an order of restitution in excess of $100 million.
Written by Jason Oliva