California Execs Face Charges in $100M Investment Scheme

Federal authorities in California have charged two finance executives with running a massive fraudulent investment scheme that brought in more than $100 million. Mark Hanf, who served as CEO of Pacific Private Money, and Nam Phan, a top executive at a company affiliate, raised the money by promising steady returns from real estate mortgage loans. According to the SEC, the pair hid heavy losses on bad loans and used funds from new investors to pay off older ones.

The operation fell apart when withdrawal requests surged and the company could not pay out the money. Records show that about $121 million remained invested while less than $17 million was left to recover when the funds entered bankruptcy. Prosecutors also claim that Hanf personally took more than $7 million to pay off his own credit cards and mortgage. Many of the affected individuals were retirees living in California.

Both men pleaded not guilty and are currently free on bond while they face serious federal charges. A wire fraud conviction carries a maximum sentence of 20 years in prison. The SEC also filed a separate civil case against them. This situation serves as a stark reminder for traders and investors to carefully verify any private lending fund before handing over their savings.