Prosecutors get order to freeze assets of a Ponzi scheme mastermind Pang

Federal regulators have won a court order freezing the assets of financier Danny Pang’s two investment companies, whom they accuse of defrauding investors of hundreds of millions of dollars.

Pang, a Taiwanese immigrant, owns Private Equity Management Group Inc. and Private Equity Management Group LLC, based in Irvine, Calif. He was accused of running his business in a Ponzi scheme, when money raised from newer investors is used to pay earlier ones after a Wall Street Journal reported earlier this month that a former president of Private Equity Management (PEM) Group Inc. Nasar Aboubakare told that part of Pang’s business involved a Ponzi scheme. The agency is seeking unspecified civil penalties and restitution of allegedly ill-gotten profits from Pang and the firms. 

Furthermore, the SEC found out that Pang and his firms had lured investors by representing him as a former senior vice president and high-tech merger adviser from investment house Morgan Stanley with an MBA from the University of California at Irvine. 

Pang was ordered to surrender his passports and bring back to the U.S. any assets sent overseas.

Pang's attorney doubted the validity of the SEC move, as the order was sought on Friday in federal court in Los Angeles without notifying his client, thus, depriving him of a chance to respond

The SEC said its investigation was continuing.