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Former CEO faces federal charges

A man who used to control a network of companies that operated 300 assisted living centers — including one in Gresham — has pleaded not guilty to more than 50 counts of fraud, money laundering, criminal forfeiture, plus aiding and abetting.

Jon Michael Harder, 47, of Bend voluntarily surrendered to U.S. marshals Thursday, Sept. 20, after a warrant had been issued for his arrest when a federal grand jury in Portland incited him on 56 counts of various crimes.Jon Michael Harder

The indictment alleges that Harder defrauded more than 1,000 investors out of approximately $130 million between 2006 and 2008. He pleaded not guilty at his arraignment in Portland on Friday, Sept. 21, and was released from jail the same day.

According to court documents, controlled a network of companies that bought, constructed and managed a nationwide collection of assisted living facilities.

At its height, the corporate organization that Harder controlled — Sunwest Management Inc., and related companies — owned approximately 300 assisted living facilities, serving about 15,000 residents with an average age of 85.

One of those facilities was Chestnut Lane, located at 1219 S.E. Sixth St., in Gresham. It is one of the nation’s only care facilities for the deaf and deaf-blind.

“The allegations in this indictment describe a massive fraud affecting over 1,000 investors around the country,” said U.S. Attorney Amanda Marshall in a press release.

The alleged scheme was based Harder’s false promises to investors including that they would be investing money in specific assisted living facilities and that the Sunwest enterprise was a successful business.

However, the money that investors thought was going into specific facilities was commingled with money coming in from all investors and banks.

It’s alleged that Sunwest was losing millions of dollars at least as far back as 2006.

Harder, who is Sunwest's former CEO and former majority owner, is accused of essentially running a Ponzi scheme, taking in millions of dollars from both investors and banks, supposedly to acquire new assisted living facilities.

In reality, the funds were used to pay guaranteed returns to earlier investors.

Harder also allegedly laundered the proceeds by diverting large amounts of money to support his lavish lifestyle.

He flew on expensive corporate jets; drove a new Mercedes, Land Rover, Ford F-150 pickup and a Jetta; purchased a 2-carat diamond ring worth $200,000; and owned beachfront property in Lincoln County, as well as a ranch in Bend, property Silverton and elsewhere.