By Jeff Quackenbush | North Bay Business Journal
Federal prosecutors from two agencies on Tuesday charged two former executives of a now-shuttered Marin County real estate investment and finance group with allegedly operating a multiyear fraud scheme that used new investor money to pay earlier investors while concealing mounting losses.
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Mark Hanf, 66, founder and former CEO of Novato-based Pacific Private Money, and former Chief Operating Officer Nam Phan, 58, appeared Tuesday in federal court in San Francisco, waived indictment and pleaded not guilty. Both were released on $250,000 bonds. If convicted, each faces up to 20 years in prison on the conspiracy to commit wire fraud charge, while Hanf faces an additional maximum of 10 years on the money laundering charge. The charges also carry potential fines, restitution and forfeiture.
The Department of Justice alleges Pacific Private Money funds raised about $103 million from more than 175 investors from December 2021 through the end of last year. Prosecutors allege Hanf and Phan knew by late 2021 that fund revenue could not cover expenses, investor distributions and redemptions, and began transferring money among funds. New investments were allegedly used to pay distributions and redemptions to earlier investors.
“As alleged, these defendants falsely assured investors that Pacific Private Money was successful and profitable, knowing that continued losses had turned it into a Ponzi scheme,” U.S. Attorney Craig Missakian said in the announcement. Such a scheme typically involves skimming money from investments while continuing to pay returns using new investor money, until the incoming funds can’t keep up with commitments.
Also on Tuesday, the Securities and Exchange Commission charged Hanf and Phan with securities-law violations, alleging a fraudulent investment offering involving more than $80 million raised from about 190 mostly everyday investors. The SEC alleges Hanf diverted at least $7 million for personal use.
“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,” SEC Associate Director Jason Lee said in the news release.
Throughout last year and accelerating in the fall, the dire finances of the Pacific Private Money group started to become noticeable to investors as distribution payments were skipped and requests to withdraw money were slow-walked or ignored, according to allegations in several lawsuits underway in Marin and Alameda county courts. Access to investor money abruptly stopped last December, when a restructuring company, Jigsaw Advisors, was brought in to run the company, and the Novato offices closed in February.
State financial regulators in May issued a “desist and refrain” order targeting the companies, affiliated funds, Hanf and Phan after revoking Pacific Private Money Inc.’s California Financing Law license. In 2014, a state disciplinary case resulted in 45-day license suspensions for Hanf and the company for how it handled money moving between accounts.
In July, Pacific Private Money and affiliates filed for Chapter 11 bankruptcy protection amid investor lawsuits and government investigations, the Marin Independent Journal reported. As many as 400 investors holding roughly $140 million in invested capital are said to be affected, William Brinkman of Jigsaw has revealed in court filings.
Change-of-plea hearings in the DOJ case are scheduled for Sept. 30 for Hanf, a Tiburon resident, and Sept. 23 for Phan, of Novato.
Jeff Quackenbush joined North Bay Business Journal in May 1999. Reach him at [email protected] or 707-521-4256.
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