Pacific Private Money: the lender that stopped lending

On 1 September 2026 the Securities and Exchange Commission sued Mark D. Hanf, founder and former chief executive of Pacific Private Money Group LLC of Novato, California, and Hoai-Nam Chu Phan, known as Nam Phan, former chief operating officer of the subsidiary Pacific Private Money, Inc., in the U.S. District Court for the Northern District of California. The complaint alleges that from at least December 2021 to approximately November 2025 the two raised over $80 million from approximately 190 primarily retail investors, many of them senior citizens and retired, by selling membership interests in two real estate lending funds.

What distinguishes this case from the general run of private-fund enforcement is that the business underneath was real. The firm described itself on its team page, archived in June 2023, as "an alternative real estate finance provider specializing in short-term real estate loans for California borrowers since 2008." Pacific Private Money Fund I LLC launched in 2013 and Pacific Freedom Fund LLC in 2020, both writing bridge loans against California property.

Then, according to the complaint, the lending stopped and the fundraising did not. By August 2022 the Pacific Fund had ceased originating new real-estate-backed loans. Investors went on buying membership interests. Distributions and redemptions went on being paid until October 2025, when both funds stopped paying either.

What the funds told the regulator about themselves

While the conduct alleged was under way, both funds were filing their own figures with the Commission. Hanf signed a Form D amendment for each in late February 2025, both filed on 5 March 2025.

Pacific Freedom Fund reported a total offering amount of $150,000,000, an amount sold of $69,410,360 and $80,589,640 remaining, with 127 investors, all accredited, sales commissions of $0, finders' fees of $0, a first sale on 14 April 2020 and a minimum investment accepted of $1,000. Pacific Private Money Fund I reported a total offering amount of $100,000,000, an amount sold of $73,481,409 and $26,518,591 remaining, with 288 investors, all accredited, a first sale on 9 July 2013 and a minimum investment accepted of $50,000.

That thousand-dollar minimum is worth pausing on. A private fund willing to take a thousand dollars is not selling to the ultra-wealthy but to the mass-affluent retiree, which matches the investors the complaint describes.

How the money moved, as the complaint tells it

The Pacific Fund was unprofitable from the year ending 31 December 2021, much of its loan book non-performing, and the complaint says Hanf had lent large amounts of its capital to a single unnamed borrower who defaulted. From at least December 2021, it alleges, the Freedom Fund and other affiliates regularly moved cash into it, booked as short-term loans and in large part never repaid. The Freedom Fund was unprofitable from the year ending 31 December 2022. Both funds still paid tens of millions of dollars in distributions and redemptions, the Commission alleges, sourced predominantly from new investor money.

The Commission describes the conduct as an "offering fraud and Ponzi-like scheme" and the payments as "Ponzi-like payments." That is the regulator's own wording, not a finding.

Hanf is separately alleged to have misappropriated at least $7 million between at least April 2021 and July 2025, moving money from both funds to Hanf Capital LLC, an entity he created and solely controlled, to Pacific Realty Development LLC and to his personal bank account. Records cited in the complaint have it going on real estate holdings, a boxing match purse, a purported crypto asset venture and personal bills. The complaint further alleges Hanf directed the creation of false account statements and false Schedule K-1 tax forms, and Phan false account statements.

"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." — Jason Lee, Associate Director of the SEC's San Francisco Regional Office, 1 September 2026

Three sets of numbers, three responses

Three raise figures sit on the public record and do not reconcile. The Commission's complaint says over $80 million from approximately 190 investors across the two funds, December 2021 to November 2025. The criminal information brought by the U.S. Attorney for the Northern District of California, as that office and IRS Criminal Investigation describe it, says approximately $103 million from over 175 investors across all the group's funds, approximately December 2021 to December 2025. The complaint separately puts total outstanding investments in the two funds at almost $121 million. The documents do not show the arithmetic connecting them.

The two men have answered in three ways. Civilly, both consented on the day of filing, without admitting the allegations, to judgments imposing permanent injunctions and a securities bar, with disgorgement against Hanf and penalties against both left for the court to set. Criminally, both were charged by information on 31 August 2026 with conspiracy to commit wire fraud, and Hanf alone with money laundering; both waived indictment, pleaded not guilty and were released on $250,000 bonds. Third, both are calendared for change of plea hearings before U.S. District Judge Jacqueline Scott Corley, Phan on 23 September 2026 and Hanf on 30 September 2026. Neither hearing has taken place, and what either man will do at his is not something the calendar states.

The prosecutor's language is not the regulator's. Craig H. Missakian, the U.S. Attorney, said in announcing the charges: "As alleged, these defendants falsely assured investors that Pacific Private Money was successful and profitable, knowing that continued losses had turned it into a Ponzi scheme." That is an allegation, not a finding; the Commission's own filings keep to the softer word.

Where the money sits

There is no receiver, no asset freeze and no temporary restraining order in the Commission's prayer for relief; the money is in bankruptcy court instead. Thirteen Pacific Private Money entities, both funds among them, filed for Chapter 11 protection on 16 June 2026 in the Northern District of California. The claims agent is Verita Global and the general claims bar date is 19 October 2026, the operative date for anyone owed money by them. The firm's website carries a notice: "The Pacific Private Money ('PPM') companies have discontinued operations and are no longer providing loans of any type."

Much remains unestablished. The criminal case number has not been published, and whether the court has entered the consented civil judgments could not be confirmed. No disgorgement or penalty figure has been set. How much investors recover is unknown; the under-$17 million estimate is the Commission's, not the bankruptcy estate's. Hanf, whom the complaint gives as 65, appears elsewhere as 66. Only he and Phan have been charged.

Everything here is alleged. As the Justice Department's announcement puts it, "The information merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt."