Danny Pang (financier)
Encyclopedia
Danny Pang (December 15, 1966 – September 12, 2009) was a Taiwanese-American private equity
manager, who ran the Private Equity Management Group, Inc. and Private Equity Management, LLC (PEMGroup) which claimed to manage $4 billion. The funds were invested mainly on behalf of Taiwan
ese investors, in American securities, timeshare
properties, and insurance policies. He was arrested by the FBI
on April 28, 2009 for structuring cash transactions to avoid a $10,000 reporting threshold, which has a maximum ten-year prison sentence. The U.S. Securities and Exchange Commission in a civil suit alleged that he ran a Ponzi scheme
and misreported his background to investors, by claiming that he had been a vice-president at Morgan Stanley
and had an MBA degree from the University of California at Irvine. The SEC announced on April 27 that it had obtained a freeze on the assets of Pang and his two firms, as well as an order to turn in his passports. His former partner, Nasar Aboubakare, has also claimed in a lawsuit that the firm was a Ponzi scheme.
Pang was confined to his house on bail. His criminal trial had been delayed until August 18, 2010. He died on September 12, 2009 at a Newport Beach, California
, hospital.
, also in Orange County.
His father currently lives in the Villa Park house.
In 1986 he attended the University of California, Irvine
during the summer session. According to the Wall Street Journal, he became a student leader at the university, being elected chairman of the Asian Pacific Student & Staff Association in 1988-89, despite not being enrolled at the time. In 1997 he left a senior position at a venture capital firm, amid accusations of a $3 million theft from an escrow account.
Later in 1997, his wife, ex-stripper Janie Louise Pang, was murdered in the Villa Park house, possibly by a contract killer, after she took steps toward a divorce. A lawyer who had worked for Danny Pang was arrested for the murder, but his trial resulted in a hung jury. Pang was on a business trip during the murder, but invoked his Fifth Amendment rights to avoid testifying at the trial.
At the trial, the defense presented a police and Federal Bureau of Investigation
memo suggesting that Pang had ties to Taiwanese organized crime
. Pang said he had no ties to his wife's murder or to organized crime ties. He later remarried.
The Wall Street Journal reported that Pang died at a Newport Beach hospital on September 12, 2009. Police reported that they received a report of a dead body near Pang's home at 3:41 pm, on September 11, 2009. Paramedics took him to Hoag Memorial Hospital Presbyterian, where he was in the cardiac care unit. He died at 5:12 the next morning. Police crime scene investigators removed 4 to 5 small bags of evidence from Pang's home, according to neighbors. On the 12th, police stated "We're not sure who made the call. We don't know the cause of death. The coroner will be looking into that as well. This will be treated as a death investigation."
An autopsy conducted on September 13 by the Orange County Coroner ruled out foul play as the cause of death. His death was ruled a suicide in January 2010 based on the toxicology report, which revealed blood levels of both oxycodone and hydrocodone each multiples of the toxic level, as well dozens of undigested pills in his stomach.
His family issued a statement saying "Danny was a wonderful husband, loving father, and honest businessman. For the past five months, Danny was subjected to a relentless attack of innuendo and false allegations, and was denied any opportunity to defend himself."
According to the SEC civil suit, PEMGroup offered unregistered securities starting in 2003, promising returns of 5.25% to 7%. The money was supposed to be invested in timeshare properties, and in the purchase of life insurance policies from the elderly. The insurance policies would pay PEMGroup if the covered individuals died. The SEC claims that the returns on the insurance policies were not high enough so that the firm paid with money accepted from new investors, starting a Ponzi scheme.
Following the April 15, 2009 publication of articles on Pang in The Wall Street Journal, Pang stepped down from his position as CEO of PEMGroup, pending an internal investigation. The newspaper continued with a series on Pang, which included articles alleging improper accounting of PEMGroup funds, and allegations of improper use of funds to buy Costa Rica
n real estate.
The firm is now operating under a court appointed receiver. The receiver reported in a Federal court filing on May 7, 2009 that the firm was used as Pang's "personal piggy-bank" and that investors are currently owed principal of about $823 million, with the firm's assets worth between $213–426 million. Improper use of investor's funds may have included the purchase of several jets, a $1 million Disney cruise for employees, $6.9 million in undocumented loans to Pang, and $9.8 million in transfers to firms controlled by Pang.
In August 2009, the receiver took control of 15 additional entities deemed to be PEMGroup affiliates. These affiliates were controlled by a Taiwanese woman believed to be Pang's girlfriend. U.S. District Judge Philip S. Gutierrez ruled based on photographs that "strongly suggest their relationship transcended that of a normal business relationship."
Pang was confined to his house, on $1 million bail.
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
manager, who ran the Private Equity Management Group, Inc. and Private Equity Management, LLC (PEMGroup) which claimed to manage $4 billion. The funds were invested mainly on behalf of Taiwan
Taiwan
Taiwan , also known, especially in the past, as Formosa , is the largest island of the same-named island group of East Asia in the western Pacific Ocean and located off the southeastern coast of mainland China. The island forms over 99% of the current territory of the Republic of China following...
ese investors, in American securities, timeshare
Timeshare
A timeshare is a form of ownership or right to the use of a property, or the term used to describe such properties. These properties are typically resort condominium units, in which multiple parties hold rights to use the property, and each sharer is allotted a period of time in which they may use...
properties, and insurance policies. He was arrested by the FBI
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
on April 28, 2009 for structuring cash transactions to avoid a $10,000 reporting threshold, which has a maximum ten-year prison sentence. The U.S. Securities and Exchange Commission in a civil suit alleged that he ran a Ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
and misreported his background to investors, by claiming that he had been a vice-president at Morgan Stanley
Morgan Stanley
Morgan Stanley is a global financial services firm headquartered in New York City serving a diversified group of corporations, governments, financial institutions, and individuals. Morgan Stanley also operates in 36 countries around the world, with over 600 offices and a workforce of over 60,000....
and had an MBA degree from the University of California at Irvine. The SEC announced on April 27 that it had obtained a freeze on the assets of Pang and his two firms, as well as an order to turn in his passports. His former partner, Nasar Aboubakare, has also claimed in a lawsuit that the firm was a Ponzi scheme.
Pang was confined to his house on bail. His criminal trial had been delayed until August 18, 2010. He died on September 12, 2009 at a Newport Beach, California
Newport Beach, California
Newport Beach, incorporated in 1906, is a city in Orange County, California, south of downtown Santa Ana. The population was 85,186 at the 2010 census.The city's median family income and property values consistently place high in national rankings...
, hospital.
Personal
Pang was born in Taiwan where he attended the prestigious Lih Jen International Private Elementary and Middle School. He moved to the U.S. as a teenager, becoming a citizen in 1990. He last lived in Newport Beach and previously lived in Villa ParkVilla Park, California
Villa Park is a city in northern Orange County, California, near and surrounded by the City of Orange, and close to Anaheim Hills, that incorporated in 1962. As of the 2010 Census, the city had a population of 5,812, down from 5,999 at the 2000 census, achieving the status of the smallest city in...
, also in Orange County.
His father currently lives in the Villa Park house.
In 1986 he attended the University of California, Irvine
University of California, Irvine
The University of California, Irvine , founded in 1965, is one of the ten campuses of the University of California, located in Irvine, California, USA...
during the summer session. According to the Wall Street Journal, he became a student leader at the university, being elected chairman of the Asian Pacific Student & Staff Association in 1988-89, despite not being enrolled at the time. In 1997 he left a senior position at a venture capital firm, amid accusations of a $3 million theft from an escrow account.
Later in 1997, his wife, ex-stripper Janie Louise Pang, was murdered in the Villa Park house, possibly by a contract killer, after she took steps toward a divorce. A lawyer who had worked for Danny Pang was arrested for the murder, but his trial resulted in a hung jury. Pang was on a business trip during the murder, but invoked his Fifth Amendment rights to avoid testifying at the trial.
At the trial, the defense presented a police and Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
memo suggesting that Pang had ties to Taiwanese organized crime
Organized crime
Organized crime or criminal organizations are transnational, national, or local groupings of highly centralized enterprises run by criminals for the purpose of engaging in illegal activity, most commonly for monetary profit. Some criminal organizations, such as terrorist organizations, are...
. Pang said he had no ties to his wife's murder or to organized crime ties. He later remarried.
The Wall Street Journal reported that Pang died at a Newport Beach hospital on September 12, 2009. Police reported that they received a report of a dead body near Pang's home at 3:41 pm, on September 11, 2009. Paramedics took him to Hoag Memorial Hospital Presbyterian, where he was in the cardiac care unit. He died at 5:12 the next morning. Police crime scene investigators removed 4 to 5 small bags of evidence from Pang's home, according to neighbors. On the 12th, police stated "We're not sure who made the call. We don't know the cause of death. The coroner will be looking into that as well. This will be treated as a death investigation."
An autopsy conducted on September 13 by the Orange County Coroner ruled out foul play as the cause of death. His death was ruled a suicide in January 2010 based on the toxicology report, which revealed blood levels of both oxycodone and hydrocodone each multiples of the toxic level, as well dozens of undigested pills in his stomach.
His family issued a statement saying "Danny was a wonderful husband, loving father, and honest businessman. For the past five months, Danny was subjected to a relentless attack of innuendo and false allegations, and was denied any opportunity to defend himself."
PEMGroup
About 16,000 Taiwanese investors invested more than $700 million with PEMGroup. The securities were sold to them by Taiwanese banks including Standard Chartered (about $221 million, according to Taiwanese government sources), Hua Nan ($205 million), Bank SinoPac ($146 million), Taichung Bank ($70 million), EnTie Bank ($52 million) and Cosmos Bank ($48 million).According to the SEC civil suit, PEMGroup offered unregistered securities starting in 2003, promising returns of 5.25% to 7%. The money was supposed to be invested in timeshare properties, and in the purchase of life insurance policies from the elderly. The insurance policies would pay PEMGroup if the covered individuals died. The SEC claims that the returns on the insurance policies were not high enough so that the firm paid with money accepted from new investors, starting a Ponzi scheme.
Following the April 15, 2009 publication of articles on Pang in The Wall Street Journal, Pang stepped down from his position as CEO of PEMGroup, pending an internal investigation. The newspaper continued with a series on Pang, which included articles alleging improper accounting of PEMGroup funds, and allegations of improper use of funds to buy Costa Rica
Costa Rica
Costa Rica , officially the Republic of Costa Rica is a multilingual, multiethnic and multicultural country in Central America, bordered by Nicaragua to the north, Panama to the southeast, the Pacific Ocean to the west and the Caribbean Sea to the east....
n real estate.
The firm is now operating under a court appointed receiver. The receiver reported in a Federal court filing on May 7, 2009 that the firm was used as Pang's "personal piggy-bank" and that investors are currently owed principal of about $823 million, with the firm's assets worth between $213–426 million. Improper use of investor's funds may have included the purchase of several jets, a $1 million Disney cruise for employees, $6.9 million in undocumented loans to Pang, and $9.8 million in transfers to firms controlled by Pang.
In August 2009, the receiver took control of 15 additional entities deemed to be PEMGroup affiliates. These affiliates were controlled by a Taiwanese woman believed to be Pang's girlfriend. U.S. District Judge Philip S. Gutierrez ruled based on photographs that "strongly suggest their relationship transcended that of a normal business relationship."
Pang was confined to his house, on $1 million bail.