The Securities and Exchange Commission has charged two former executives of a San Francisco Bay Area private fund group with running a scheme that raised more than $80 million from roughly 190 investors, many of them retired senior citizens.
Mark D. Hanf, former CEO of Novato, California-based Pacific Private Money Group LLC (PPMG), and Hoai-Nam Chu Phan, also known as Nam Phan, former COO of a PPMG subsidiary, are accused of misleading investors in two PPMG private funds between December 2021 and November 2025. The SEC alleges they told investors their money would be used to make or buy real estate-secured loans and that they could expect preferred or fixed returns from those lending activities.
Instead, according to the SEC's complaint, the pair regularly used new investor money to make payments to earlier investors, a hallmark of a Ponzi-like arrangement, and the returns they touted came largely from that new capital rather than from any real estate lending earnings. The SEC also alleges Hanf diverted more than $7 million of investor funds for his own benefit.
The alleged scheme started to come apart in fall 2025, when many investors asked to withdraw their money and the defendants lacked the funds to pay them, said Jason Lee, Associate Director of the SEC's San Francisco Regional Office. Despite total outstanding investments in the two funds of almost $121 million, by February 2026 the funds' recoverable assets were estimated at less than $17 million, which Lee called "devastating losses for so many investors."
The SEC's complaint, filed in the U.S. District Court for the Northern District of California, charges Hanf 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, and charges Phan with violating Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5. Without admitting the allegations, both consented to judgments, subject to court approval, that would permanently bar them from violating those provisions and from taking part in securities transactions other than trades in their personal accounts, with disgorgement, interest, and penalties to be set later by the court.
In a parallel action, the U.S. Attorney's Office for the Northern District of California announced criminal charges against both men. The case follows other recent SEC enforcement actions, including charges announced last month against former executives of a subprime auto lender and against an investment adviser and its CEO.
