by Brian Mahany
Former Sunwest Management CEO Jon Harder was indicted for fraud in connected with an alleged Pozi scheme. Prosecutors say he bilked investors out of over $130 million.
Harder was CEO of Sunwest, a constellation of companies that purchased and operated nursing homes and assisted living facilities. Several years ago, his company went on a buying binge acquiring dozens of properties throughout the United States. At the height of his empire, his company owned 300 assisted living facilities serving 15,000 patients.
Investors thought Harder was a successful business man. Prosecutors say his empire was more akin to a Ponzi scheme with money from new investors simply going to pay other investors. They say the company was hemorrhaging cash even though investors were told something entirely different.
Harder denies the charges and has entered not guilty pleas to the charges. If convicted, he faces life in prison.
Not every investment makes money. Thousands of businesses go under every year. But promoters have a duty to be honest with their investors. According to press reports, even as his empire was collapsing, Harder continued to raise money from unsuspecting new investors. According to prosecutors, he also lived a lavish lifestyle…. A $200,000 ring. Corporate jet. And multiple cars.
Prosecutors are seeking restitution. How much investors will get back is up for speculation. Unfortunately, despite the best efforts of bankruptcy trustees and receivers, sometimes victims only get back a few pennies on the dollar.
Investors in Sunwest are lucky in that the fraud was so huge as to attract the attention of law enforcement. The U.S. Attorney for Oregon says that U.S. Postal Service Inspectors, the FBI and IRS all cooperated in the case.
For many victims, the government does not get involved. These folks are left on their own to pursue civil litigation against the people perpetrating the fraud. Often, that means a race top the courthouse as there is rarely enough money to go around.
Even in case where the government is seeking restitution, aggressive asset recovery lawyers can often collect against third parties who facilitated the fraud. This includes banks, lawyers and auditors. Once again, because insurance coverage is often limited it’s best to be first.
The asset recovery and fraud lawyers at Mahany & Ertl help victims of Ponzi schemes, abusive tax shelters and fraud get back their hard earned money. We can also help qualify any remaining loss for special “fraud loss” treatment by the IRS. Unless you know that the government has seized enough of the fraudster’s assets and has enough to fully repay all victims, don’t wait for traditional restitution efforts. Many states have very short windows in which fraud claims can be brought and limited assets means the last to file a claim often gets nothing.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine and Minneapolis, Minnesota. Services available in many locations.