SAN FRANCISCO BAY AREA — The alleged scheme raised more than $80 million from approximately 190 mostly retail investors. Many of the investors were retired senior citizens who placed their capital into the Novato, California-based firm.

Hanf and Phan misrepresented to investors that capital would be used to originate or purchase loans secured by real estate. They represented that investors could expect to receive preferred or fixed rates of return from the funds’ real estate lending activities.

Instead of generating returns through legitimate business operations, Hanf and Phan regularly used new investor capital to make Ponzi-like payments to prior investors. The returns promoted by the executives were sourced largely from new investor money rather than from fund earnings connected with their real estate lending business.

Hanf allegedly misappropriated more than $7 million of investor funds for his own personal benefit. Total outstanding investments in the two private funds were almost $121 million during the period the scheme was active.

The alleged scheme operated from approximately December 2021 to November 2025. "The 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.

By February 2026, the total recoverable assets of the funds were estimated to be less than $17 million. This figure represents a shortfall compared to the total amount raised from investors over the four-year period. The SEC charges Hanf with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

Hanf and Phan did not admit the allegations in the SEC’s complaint. However, Hanf and Phan consented to judgments permanently enjoining them from violating federal securities laws.

Timeline

On February 8, 2024, the Commodity Futures Trading Commission and the Securities and Exchange Commission issued a notice regarding Form PF Reporting Requirements for All Filers and Large Hedge Fund Advisers and a Further Extension of Compliance Date.

On September 1, 2026, the SEC charged Hanf with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. On the same date, the Securities and Exchange Commission charged Mark D. Hanf, the former CEO of Pacific Private Money Group LLC, and Hoai-Nam Chu Phan, the former COO of a PPMG subsidiary, with orchestrating an offering fraud. The SEC complaint was filed in the U.S. District Court for the Northern District of California on September 1, 2026.

Hanf and Phan did not admit the allegations in the SEC’s complaint on September 1, 2026. Also on September 1, 2026, Hanf and Phan consented to judgments permanently enjoining them from violating federal securities laws.

Why It Matters

The case involves a substantial volume of capital, with total outstanding investments in the two private funds reaching almost $121 million. The discrepancy between this figure and the estimated less than $17 million in recoverable assets by February 2026 shows the scale of the financial loss faced by the approximately 190 mostly retail investors.

The demographic composition of the investor base adds to the significance of the enforcement action, as many of the investors were retired senior citizens. The charges rely on the Securities Act, which is legislation regulating the offer and sale of securities, and the Securities Exchange Act of 1934, applying the regulatory framework to the alleged misconduct.