Pacific Private Money Group Founder, Ex-COO Charged in $80M Ponzi Scheme

The U.S. Securities and Exchange Commission on Tuesday charged Mark D. Hanf, the founder and former chief executive officer of Novato, Calif.-based Pacific Private Money Group LLC (PPMG), and Hoai-Nam Chu Phan, the former chief operating officer of a PPMG subsidiary, with orchestrating a Ponzi-like offering fraud that raised more than $80 million from approximately 190 mostly retail investors, many of them retired senior citizens.

According to the SEC’s complaint, filed in the U.S. District Court for the Northern District of California, Hanf and Phan told investors in two PPMG private funds – Pacific Private Money Fund I LLC and Pacific Freedom Fund LLC – that their capital would be used to originate or purchase loans secured by real estate, and that they could expect preferred or fixed rates of return from the funds’ lending activities. From December 2021 to November 2025, the complaint alleges, the two men instead used new investor money to make Ponzi-like payments to earlier investors, funding touted returns largely from new capital rather than from the funds’ lending business.

The Pacific Fund had been unprofitable since the end of 2021 and the Freedom Fund since the end of 2022, the SEC said, in part because a large share of their loans were nonperforming and because Hanf directed large loans to a single borrower who later defaulted. Despite that, the complaint says, the funds kept raising money from new investors – about $7.3 million from more than 60 investors in the Pacific Fund and roughly $76.5 million from about 130 investors in the Freedom Fund during the period covered by the complaint.

The SEC also alleges Hanf separately misappropriated more than $7 million in investor funds for personal use, routing money through an entity he owned called Hanf Capital LLC and another called Pacific Realty Development LLC. According to the complaint, Hanf used the money to acquire and service debt on real estate holdings, increase his stake in a newer PPMG fund, fund the purse of a boxing match, invest in a crypto asset venture, and cover personal expenses including his home mortgage and credit card bills. The funds’ internal records characterized the transfers as loans to Hanf’s personal entities, the SEC said, but as of PPMG’s bankruptcy filing in June, principal and interest on those “loans” remained largely unpaid.

“This alleged scheme began to unravel in the fall of 2025 as numerous investors demanded to withdraw their money and the defendants did not have sufficient funds to satisfy those requests,” Jason Lee, associate director of the SEC’s San Francisco Regional Office, said in a statement. “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. That amounts to devastating losses for so many investors.”

The Pacific Fund and Freedom Fund stopped paying distributions and redemptions in October 2025. PPMG brought in a chief restructuring officer that December, and the two funds, PPMG, and related entities filed for Chapter 11 bankruptcy protection on June 16.

The SEC’s complaint charges Hanf with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5, and charges Phan with violating Sections 17(a)(1) and (3) of the Securities Act along with the same Exchange Act and Rule 10b-5 provisions. Without admitting or denying the allegations, both men consented to entry of judgments, subject to court approval, that would permanently bar them from violating the charged provisions and from participating in the issuance, purchase, offer, or sale of any security, other than for their own personal accounts. Any disgorgement, prejudgment interest, and civil penalties against Hanf, and any civil penalties against Phan, would be determined later by the court on the SEC’s motion.

In a parallel action, the U.S. Attorney’s Office for the Northern District of California announced criminal charges against both men. The criminal charges are allegations that have not been proven in court.

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