SEC charges Bay Area private fund executives in alleged $80 million fraud
The SEC says two Pacific Private Money Group executives raised more than $80 million from mostly retail investors in an alleged offering fraud tied to private funds.
The Securities and Exchange Commission said Wednesday that it charged former Pacific Private Money Group executives Mark D. Hanf and Hoai-Nam Chu Phan in an alleged offering fraud tied to two private funds that raised more than $80 million from about 190 investors.
The agency said most of the investors were retail buyers, including many retired senior citizens. It said the money was raised for real-estate-secured lending and expected steady returns.
According to the SEC, the alleged conduct ran from about December 2021 through November 2025. The agency said investors in two private funds were told their money would be used to originate or buy loans secured by real estate and that they could expect preferred or fixed returns from those lending activities.
The SEC alleges Hanf and Phan instead used new investor money to make Ponzi-like payments to earlier investors. It also alleges that the returns were sourced largely from new investor funds rather than earnings from the real-estate lending business.
The agency said Hanf was the former chief executive officer of Novato, California-based Pacific Private Money Group LLC, or PPMG. It said Phan, also known as Nam Phan, was the former chief operating officer of a PPMG subsidiary.
The SEC also alleges that Hanf misappropriated more than $7 million of investor funds for personal benefit. Jason Lee, an SEC official quoted in the agency’s release, said the scheme began to unravel in fall 2025 when investors demanded withdrawals and the defendants lacked enough money to meet them.
Lee said total outstanding investments in the two private funds were almost $121 million and that recoverable assets were estimated to be less than $17 million by February 2026.
The SEC filed its complaint in the U.S. District Court for the Northern District of California. It charged Hanf under Securities Act Section 17(a), Exchange Act Section 10(b) and Rule 10b-5. It charged Phan under Securities Act Sections 17(a)(1) and (3), Exchange Act Section 10(b) and Rule 10b-5.
Both defendants consented, without admitting the allegations, to proposed judgments that would bar them from future violations and from participating in securities issuance, purchase, offer or sale, except for personal accounts, subject to court approval. The SEC said disgorgement, prejudgment interest and civil penalties against Hanf, and civil penalties against Phan, will be decided later by the court on motion by the commission.
The SEC also said the U.S. Attorney’s Office for the Northern District of California announced parallel criminal charges against Hanf and Phan.
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