The Securities and Exchange Commission has charged the former CEO and former chief operating officer of a Novato, California, private lending firm with running what regulators describe as a Ponzi-like scheme that raised more than $80 million from roughly 190 investors, many of them retirees.
Mark D. Hanf, former chief executive of Pacific Private Money Group LLC, and Hoai-Nam Chu Phan, the firm’s former chief operating officer, are accused of telling investors their money would fund real estate-secured loans generating guaranteed returns. Instead, the SEC alleges, the firm used new investor deposits to pay returns to earlier investors, the hallmark of a Ponzi scheme, while Hanf personally misappropriated more than $7 million.
A widening gap between what investors were owed and what was left
The scheme ran from December 2021 through November 2025 before beginning to unravel last fall, according to the SEC’s complaint. By February 2026, the two private funds involved carried almost $121 million in outstanding investor commitments but held less than $17 million in recoverable assets.
“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,” said Jason Lee, associate director of the SEC’s San Francisco Regional Office.
The SEC’s complaint charges both men with violating the antifraud provisions of the Securities Act and the Securities Exchange Act, including Section 17(a) and Rule 10b-5. The agency is seeking permanent injunctions, disgorgement of ill-gotten gains, and civil penalties against both defendants.
Private real estate lending funds have drawn increased SEC scrutiny in recent years as retail investors, often retirees seeking steady income, have poured money into vehicles promising fixed returns that are harder to verify than publicly traded securities. The case remains in litigation, and neither Hanf nor Phan has been convicted of any wrongdoing.
Sources: U.S. Securities and Exchange Commission · The Daily Hodl
