The story of Danny Pang, a West Coast money manager charged with conducting a massive Ponzi scheme, took a dramatic and mysterious turn with his death last weekend.
Pang, 42, died early Saturday morning after being taken from his Newport Beach, Calif., home to a hospital.
A coroner’s report said that there was no evidence of foul play but that the case remains under investigation pending toxicology results. That process could take two to three months.
In April, the Securities and Exchange Commission charged Pang, the founder and head of Private Equity Management Group, a firm known as PEMGroup, with orchestrating a massive fraud.
Pang and the company used allegedly “false claims and bogus documents” to secure millions of dollars from investors, most of them from Pang’s native Taiwan.
The SEC also claimed that PEMGroup used the money from new investors to pay dividends to earlier investors, a classic Ponzi scheme.
Federal authorities later arrested Pang on a money laundering charge, and he was released on $1 million bail.
Following the SEC complaint, federal regulators seized Pang’s company. They later said that investors might have lost between $287 million to $654 million.
In July, Pang was charged in a second criminal case.
Pang denied all the charges against him. Following his death, his family released a statement that said, in part:
“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.”
Pang’s troubles began on April 15 when The Wall Street Journal published a long story headlined “Highflying Financier Faces Questions Over Fund Empire.”
The story, which preceded the SEC complaint, stated, “both Mr. Pang’s past and his business may not be quite as they appear.”
While it was true that Pang was for a while a partner in Frontier Group, a fund firm that included Frank C. Carlucci, a former secretary of defense, and Norman R. Augustine, the former CEO of Lockheed Martin, other parts of his life didn’t add up, the paper claimed.
The Journal reported that Pang hadn’t received two degrees from the University of California at Irvine, as he claimed. Indeed, it said that he was only present at the school for one summer course. Pang said he attended under another name, but he didn’t supply that name.
The paper also reported that there was no proof that Pang had been a vice president at Morgan Stanley. Pang didn’t supply proof that he had worked at the investment bank.
The Journal reported that Pang had been a partner in Sky Capital Partners, a venture-capital firm, but he allegedly left in 1997 after stealing $3 million. Pang denied that this happened.
Soon after his departure from Sky Capital, Pang’s wife, Janie Louise Pang, was murdered in their home by a gunman.
According to the Journal, the marriage between Pang and his wife, a former stripper, had been “stormy,” with police called to the home four times to investigate domestic disturbances.
Pang was out of town at the time of the murder and denied any involvement. Another man was arrested and his trial ended in a hung jury.
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