When was the last time anyone thought about Jon Harder, the founder and CEO of Sunwest Management who was sentenced to 15 years in prison for the “misuse of investment funds during the real estate crisis” of 2007 to 2009? Well, that is an understatement if we ever saw one. At its height, Sunwest was one of the largest senior living companies in the country.
Back in the day, in the 2000s, when Mr. Harder was building his empire, overpaying for properties and then not properly managing them, people often wondered, “how is he doing it?” We heard from many brokers that the runner up bids were often 10% to 20% below what Sunwest was offering, not even close enough to ask anyone to sharpen their pencils with a straight face. That is certainly one way to grow quickly.
It all came to an end when it was discovered that he was “borrowing” from one investor pool to fund another pool, or worse, a real no-no in the investment world. And then, when the market started to collapse, he started to default on some debt. You don’t go to jail for defaulting on corporate debt (just ask Donald Trump), but stiffing investors for your own benefit, well, that should result in a prison sentence. Was 15 years too harsh? Maybe, but some investors and lenders would have been happy if it was more. And then, what about those unfortunate employees who had to pay federal income taxes on the phantom gains of some of Harder’s deals? Where was big Jon for them?
So, when the list of pardons and commutations came out, we were surprised to see Jon Harder’s name come up. He was at the end of his fifth year served out of 15, and for non-violent crimes such as his, getting paroled after seven years or so is not uncommon, especially if you were a good boy in prison. Apparently, the petitioners for commutation said he was a good boy after admitting guilt because he accepted responsibility, and “cooperated with the government’s civil and criminal actions against him at great personal cost…helping secure the sale of the company’s assets, ensuring that Sunwest’s investors recovered more of their investment, seniors would continue living in their facilities, and employees could retain their livelihoods.”
Yes, a true boy scout. Talk about revisionist history! And like all those Sunwest properties were going to be shut down, residents kicked out and employees fired. It doesn’t happen that way, even though from what we heard some of those buildings should have been shut down, and most likely were in subsequent years. Those were the bow-wows in the pool.
All we can say is that the petition must have found a soft spot in former president Trump’s heart. After all, who has been better at stiffing lenders, vendors and subcontractors than The Donald, and proud of it. He thought that was being a good businessman. Fortunately, we do not think Jon Harder was proud of it, and he may even have had true remorse. But he was fighting with creditors to the end, blaming them for not giving him more time.
Jon was often called a “real nice guy” and we even heard a real “gentleman” as well. Quite frankly, we never got to know him because we did not trust him, what with all his deals and growth. We assumed something didn’t add up. Call it a sixth sense. In the end, we actually thought 15 years was a little harsh, especially given what other criminals get. But a criminal he was, and maybe with his new freedom, he will try to do some good. We are not holding our breath.