SEC accuses Sunwest Management of fraud

Source: AP

By MARCY GORDON – 3 hours ago

WASHINGTON (AP) — Federal regulators on Monday accused Sunwest Management Inc., one of the nation's largest operators of assisted-living facilities, and its former chief executive of securities fraud in connection with real estate investments that turned sour.

The Securities and Exchange Commission announced the charges against Sunwest, based in Salem, Ore., and went into federal court to seek an emergency order freezing the company's assets — a request denied by the judge.

The judge ordered the parties involved to negotiate a settlement, and attorneys for Sunwest and Jon Harder, the company's former president and chief executive, said they were working toward that end.

The SEC said Sunwest raised more than $300 million from 1,300 investors around the country from 2006-2008 by promising annual returns of around 10 percent and touting a track record of never missing a payment. The money was used for down payments on about 100 retirement homes, with the rest of the financing coming from institutional lenders and banks, the SEC said in a civil lawsuit filed in federal court in Eugene, Ore.

The agency alleged that Sunwest lied to investors about its operations and concealed the risks of the property investments, exposing them to huge losses when the economic downturn and credit crisis brought the collapse of Sunwest. At least half of the properties lost money, according to the SEC.

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amazing how many criminal enterprises could spring up in eight years. This may go on for awhile.

People who turned over their life savings to buy into retirement villages are probably sleeping very uneasy these days.


And according to this article
http://www.oregonlive.com/newsflash/index.ssf?/base/news-29/123536424647600.xml&storylist=orlocal
The Sunwest is being ordered to pay its former CEO up to $54,000 a month during the bankruptcy.


This Bankruptcy Judge Trish Brown sounds like one of the Bushie pro-business judges. Not freezing assets and sending the case to arbitration? Classic pro-business decision.