Three private fund executives in the San Francisco Bay Area were charged with running a multi-million dollar investment fraud scheme, according to the Securities and Exchange Commission.
The SEC said Mark D. Hanf, the former CEO of Novato, California-based Pacific Private Money Group LLC (PPMG), and Hoai-Nam Chu Phan, the former COO of a PPMG subsidiary, allegedly orchestrated an offering fraud that raised over $80 million from about190 mostly retail investors, many of whom were retired senior citizens.
The SEC’s complaint, filed in the U.S. District Court for the Northern District of California, states that from approximately December 2021 to November 2025, Hanf and Phan, also known as Nam Phan, misrepresented to investors in two of PPMG’s private funds that investor capital would be used to originate or purchase loans secured by real estate, and that investors could expect to receive preferred or fixed rates of return from the funds’ real estate lending activities.
However, it is alleged that Hanf and Phan regularly used new investor capital to make Ponzi-like payments to prior investors during this time, and the returns that Hanf and Phan touted came largely from new investor money rather than from any fund earnings connected with their real estate lending business. The SEC further alleged that Hanf misappropriated more than $7 million of investor funds for his own personal benefit.
“This alleged scheme began to unravel in the fall of 2025 as numerous investors demanded to withdraw their money and the defendants did not have sufficient funds to satisfy those requests,” said Jason Lee, Associate Director of the SEC’s San Francisco Regional Office. “Despite total outstanding investments in the two private funds of almost $121 million, by February 2026 the total recoverable assets of those funds were estimated to be less than $17 million. That amounts to devastating losses for so many investors.”
Hanf was charged with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, while Phan was charged with violating Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Hanf and Phan did not admit the allegations but each consented to the entry of a judgment, subject to court approval.
The judgment would permanently enjoin them from violating the charged provisions of the federal securities laws and from directly or indirectly participating in the issuance, purchase, offer, or sale of any security, except for purchases or sales for their own personal accounts. It was also ordered that any disgorgement, prejudgment interest, and civil money penalties against Hanf as well as any civil penalties against Phan be determined by the Court at a later date upon motion by the SEC.
In a parallel action, the U.S. Attorney’s Office for the Northern District of California announced criminal charges against Hanf and Phan. Hanf, 66, pleaded guilty to wire fraud conspiracy and money laundering. Phan, 58, pleaded guilty to wire fraud conspiracy.
“Among other things, Hanf and Phan admitted to knowingly releasing sanitized financial statements to investors that misled them about their investments, manipulating loan tapes shown to at least one investor, and telling a corporate investor that Pacific Private Money owned certain loans that they knew had already been sold,” the U.S. Attorney’s Office stated.
Both defendants agreed in their plea agreements that they would be responsible for restitution to victims of no less than $71,790,425.
The attorneys at Hyman Cotter have decades of experience dealing with securities fraud cases and have a deep understanding of how capital markets and financial service firms are intended to work to protect investors. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Hyman Cotter at (833) 665-0784 or through our online contact form for a no-cost evaluation of your matter.
