Oregon Public Broadcasting

The Securities and Exchange Commission filed a lawsuit Monday calling Salem-based Sunwest Management a "Ponzi scheme." Kristian Foden-Vencil reports.

Sunwest is the largest provider of senior assisted living in the state -- and the fourth-largest in the nation.

The S.E.C. court filings call it ‘a house of cards.’ The filings also claim the company’s top executives used money from new investors to pay-off old investors.

Sunwest stopped making interest payments to its backers last summer and its former CEO, Jon Harder is in Chapter 11 bankruptcy. The company says it’s a victim of the international credit crisis.

Despite the SEC’s new accusations, U.S. District Court Judge Michael Hogan has rejected a request for a temporary restraining order against the company.

In a written statement, Sunwest said its goal is to bring all company assets under the jurisdiction of the bankruptcy court and to establish a fair and transparent reorganization process.