Danny Pang Arrested, Crazy Life Put On Hold
Danny Pang, the Californian money-manager whose life has seemingly been unravelling since he was born, has finally gone into custody today. He’s been nailed on the relatively minor charge of structuring cash withdrawals so that they wouldn’t have to be reported to the government, and it follows yesterday’s civil suit filed by the SEC charing him with fraud. But these are merely the beige mechanics shutting down one of the most technicoloured frauds of recent times – he sees Madoff, Stanford, Nami and the rest, and raises them with dead strippers, stacks of Vegas dollars, gold bullion, bribery, and all manner of other craziness.
Pang is a Taiwanese immigrant who claimed to have a degree and an MBA from the University of California, Irvine, when he actually had neither. In the mid-90s, he stole $3m from a investment fund he was working at because he “needed the money”. There’s a dispute over whether or not he was subsequently fired from the firm, but I can’t imagine he left with a nice fruit basket, and anyway, Pang’s got much bigger fish to deal with yet.
He later formed PEMGroup, raising hundreds of millions of dollars from Taiwanese banks, to invest in the debt of US companies. It looks like 16,000 investors, with $700m of investment, are affected by the alleged subsequent fraud committed with this money. Allegations about his time there include spunking $15m of funds that were meant to be invested in timeshare properties on a Gulfstream jet; making whoopee with Taiwanese whores; having a gambling addiction that subsequently resulted in “tough-looking men” dropping by to see him; buying fake asset-insurance; and literally showering female colleagues with money won at Vegas.
PEMGroup also bought up life insurance policies off old people, and collected them when they died (mmm, charming). Unfortunately “everybody lived a long time”, so they weren’t getting any payouts. They started to pay investors with the investments of new clients, i.e. a Ponzi scheme. The second-in-command, Nasar Aboubakare, was told of the scheme, and he subsequently told the Wall Street Journal. Between then and the story being published though, he allegedly offered Aboubakare $500,000 to tell the Journal it was all made up and sorry, he was just a bit mental. He forwarded that offer onto the Journal too.
Moreover, in the period just after he was fired, Pang’s wife was murdered by an “elegantly dressed man carrying a briefcase and holding a gun”. The WSJ goes into full-on Philip Marlowe chin-stroking mode over the case, pointing out that Pang had been abusive in the past, that the day before her murder she’d gone to a private investigator with allegations that Pang had been seen with another woman. She was a stripper as well by the way, just to enhance the country-music/spy-novel nature of this narrative. Pang refused to testify in the case, and many of the jurors apparently thought he’d done it rather than the man they eventually acquitted; Pang since tried, in a neatly microcosmic version of his bigger fraudulent business, to defraud his stepson out of the life insurance.
Pang was on a “religious pilgrimage” in China when the news hit – he hired PR pitbull Mike Sitrick, who has represented Halle Berry, Paris Hilton and Naomi Campbell, to blanket deny everything, and then hired David Schindler to defend him against the FBI charges. Schindler was careful to point out that the charges had nothing to do with the alleged fraud, though I think they might be just getting to that a bit later, Dave. Good turd-polishing though!
Three cheers for Mark Maremont at the Wall Street Journal, who dug most of this stuff up, after the tipoff from Aboubakare. So will Pang be able to talk his way out of this one? How many more Ponzi schemes will there be before the recession is done? Will SEC staff ever get a holiday again? Keep watching to find out.
Posted by Ben Beaumont-Thomas in Hot Money | April 29, 2009 1:35PM |