PEM Group’s Danny Pang arrested by FBI

He has been charged with ‘structuring cash transactions’ to circumvent the reporting to the concerned authorities and defrauding investors of hundreds of millions of dollars.

Pang was at the helm of affairs of two PEM Group companies: Private Equity Management Group Inc and Private Equity Management LLC. In order to evade filing currency transaction reports, Pang encashed 38 cheques in amounts just under $10,000 using the names of PEM Group employees and family members.

Former PEM Group president, Nassar Aboubakare, told the FBI investigators that Pang probably knew that what he was doing would land him in soup. Pang had therefore installed a safe in his Newport Beach home "in the event that something happened ... he would have something to live on."

Not to be! The Securities and Exchange Commission (SEC) has filed a civil lawsuit in the federal court in Los Angeles and has obtained a temporary order freezing his assets from U.S. District Judge Philip Gutierrez. The judge also appointed a receiver, Robert P. Mosier, to safeguard the assets.

According to an FBI spokesperson, the conman is expected to make his initial court appearance on Wednesday. If convicted, the US fund manager faces up to 10 years in prison.

Pang's ponzi scheme dates back to 2003 when he raised billions of dollars from Taiwanese investors. He sold them securities and promised them profits through purchasing life-insurance policies at a discount. When the life-insurance policies did not bring in the ‘promised’ profits, he paid the old investors from the money that new investors bought in. A la Madoff!

Pang is also said to have falsely claimed to investors that he had been a former vice-president at Morgan Stanley and had an advanced business degree from the University of California at Irvine. Such false claims were made to lure customers and lend credibility to the PEM Group.

Rosalind Tyson, director of the SEC's Los Angeles office, said, "Pang's alleged use of phony credentials and false insurance coverage to guarantee his investments underscores how critical it is for investors to exercise due diligence."

-IANS