The Securities and Exchange Commission says the two Pacific Private Money Group funds at the center of a Northern California fraud case still owe investors almost $121 million, and by February 2026 those funds held less than $17 million in recoverable assets to pay any of it back. Roughly 190 people invested in the funds, many of them already retired, after being told their money would fund loans secured by real estate and pay steady, preferred returns. The SEC’s September 1 complaint alleges former chief executive Mark D. Hanf and former chief operating officer Hoai-Nam Chu Phan ran the enterprise as a Ponzi-like operation instead, and neither the agency nor the court has yet decided how much of the shortfall investors will ever see.
The Recovery Math Behind a $121 Million Shortfall
According to the SEC’s civil complaint, filed in the U.S. District Court for the Northern District of California, Hanf and Phan misrepresented to investors between December 2021 and November 2025 that their capital would originate or purchase real estate-secured loans and generate fixed or preferred returns. Instead, the agency alleges, new investor money was regularly used to make Ponzi-like payments to earlier investors, and the returns the two men touted came largely from that recycled cash rather than from any actual lending profit. The SEC separately alleges Hanf diverted more than $7 million of investor funds for his own personal benefit, a figure investigators reached before turning to the harder question of what remains to recover.
Jason Lee, associate director of the SEC’s San Francisco Regional Office, put the recovery gap in blunt terms: despite total outstanding investments across the two funds of almost $121 million, the total recoverable assets were estimated at under $17 million as of February 2026, a shortfall Lee called devastating for so many investors. Hanf and Phan each consented to a judgment, without admitting the SEC’s allegations, that would permanently bar them from the securities business; the amount of disgorgement, interest and civil penalties was left for the court to determine later, on a future motion from the Commission.
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Two Private Funds, a 2021 Pattern, and a Chapter 11 Filing
Pacific Private Money Group operated out of Novato, California, running real estate lending funds marketed on steady, preferred returns rather than market speculation. The SEC’s complaint names roughly 190 mostly retail investors, many of them already retired, as the people who put money into those funds on that pitch. A separate criminal information filed by the U.S. Attorney’s Office for the Northern District of California describes the same core conduct from the prosecutors’ side: Hanf and Phan knew as early as 2021 that several of the enterprise’s largest projects were losing money and value, yet kept soliciting new investors without disclosing it.
Starting in December 2021, prosecutors allege, Hanf and Phan moved money between Pacific Private Money’s investment funds to keep them afloat and used new investor cash to cover distributions and redemptions owed to earlier investors. Prosecutors put the fundraising total at approximately $103 million from more than 175 investors between December 2021 and December 2025, a separate accounting from the SEC’s $121 million outstanding-balance figure but describing the same underlying enterprise. Hanf, prosecutors add, also transferred enterprise money to an entity he controlled to cover personal expenses, including credit card bills and mortgage payments.
The financial strain became public in June 2026, when Pacific Private Money entities filed for Chapter 11 bankruptcy protection in the Northern District of California. U.S. Attorney Craig H. Missakian tied the criminal charges directly to that filing, saying they came soon after the collapse of Pacific Private Money and that Hanf and Phan had falsely assured investors the enterprise was successful while knowing continued losses had turned it into a Ponzi scheme.
Parallel Criminal Charges and September Court Dates
The criminal case, filed as an information rather than a grand jury indictment, charges both Hanf and Phan with wire fraud conspiracy, a count that carries a maximum sentence of 20 years in prison. Hanf alone faces an additional money laundering charge carrying up to 10 years. Both men waived indictment and made initial appearances in federal court in San Francisco on the day the charges were announced, the same day the SEC filed its separate civil complaint over the identical conduct.
Phan is scheduled to appear before U.S. District Judge Jacqueline Scott Corley on September 23 for a change-of-plea hearing, with Hanf’s hearing set for September 30 before the same judge. Waiving indictment in favor of a filed information is typically a sign a plea agreement is already in place, though the Department of Justice notes that an information merely alleges crimes and that defendants remain presumed innocent until convicted. The FBI and IRS Criminal Investigation led the underlying probe, with assistance from the SEC’s San Francisco office and the Marin County District Attorney’s Office.
None of the filings resolve the question that matters most to the roughly 190 investors named in the SEC’s case: what happens to the gap between what they are owed and what is actually left. The SEC has not yet asked the court to set a disgorgement or penalty amount against Hanf, and no distribution plan for the funds’ remaining, under-$17-million asset pool has been made public.
Until the district court rules on disgorgement, penalties, and any restitution tied to the criminal pleas expected later this month, the roughly $104 million difference between what the SEC says investors are owed and what regulators believe can actually be recovered remains an open number, not a loss already absorbed by any insurance or reserve fund. For investors who put retirement savings into loans they were told were backed by real estate, that gap, not the criminal docket, is the figure still unresolved.
This article was produced with AI assistance and reviewed by The Money Overview editorial team.
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