U.S. regulators charged Sunwest Management and its former chief executive with securities fraud on Monday, alleging that the retirement home operator lied to investors and eventually operated the business as a kind of Ponzi scheme.
The Securities and Exchange Commission accused Oregon-based Sunwest, which operates more than 200 retirement homes in the United States, and former chief executive Jon Harder of concealing the risks of investments and exposing investors to “massive losses,” Reuters said.
Between 2006 and 2008, Sunwest raised at least $300 million from investors and used the funds for down payments on approximately 100 retirement homes with the balance financed by institutional lenders and banks, according to the S.E.C.’s lawsuit.
Investors were told they were buying an ownership interest in a specific retirement home that would generate enough profit to pay a 10 percent annual return, and that Sunwest had a history of never missing a payment, the suit said.
No comments:
Post a Comment