SEC charges Bay Area fund executives with $80 million Ponzi-like scheme
Pacific Private Money Group executives allegedly diverted investor capital meant for real estate loans, leaving fewer than $17 million in recoverable assets against $121 million in outstanding investments.
The US Securities and Exchange Commission (SEC) has charged two former executives of Pacific Private Money Group LLC (PPMG) with orchestrating an offering fraud that raised more than $80 million from approximately 190 investors. The complaint alleges that Mark D. Hanf, the former chief executive officer, and Hoai-Nam Chu Phan, the former chief operating officer of a PPMG subsidiary, misled investors about the use of their capital.
According to the SEC, between December 2021 and November 2025, Hanf and Phan represented that investor funds would be used to originate or purchase loans secured by real estate. Investors were promised preferred or fixed rates of return from these lending activities. However, the regulator alleges the executives instead used new investor capital to make Ponzi-like payments to prior investors, rather than relying on earnings from the fund’s real estate business.
The SEC further alleges that Hanf misappropriated more than $7 million of investor funds for personal benefit. The scheme began to unravel in the fall of 2025 when numerous investors demanded withdrawals that the defendants could not satisfy.
The financial impact on investors is significant. Despite total outstanding investments in the two private funds of almost $121 million, total recoverable assets were estimated to be less than $17 million by February 2026. Jason Lee, Associate Director of the SEC’s San Francisco Regional Office, described the situation as resulting in devastating losses for the mostly retail investors, many of whom were retired senior citizens.
Hanf and Phan have each consented to the entry of a judgment, subject to court approval, which would permanently enjoin them from violating federal securities laws. They are also barred from directly or indirectly participating in the issuance, purchase, offer, or sale of any security, except for personal accounts. Any disgorgement, prejudgment interest, and civil money penalties against Hanf, as well as civil penalties against Phan, are to be determined by the court at a later date.
The SEC’s complaint was filed in the U.S. District Court for the Northern District of California. In a parallel action, the U.S. Attorney’s Office for the Northern District of California has announced criminal charges against both Hanf and Phan.
