They settled the same day the SEC sued – but the penalty is still unset.
On September 1, the SEC accused two California fund managers of running an $80 million “Ponzi-like” scheme. Both agreed to settle the same day.
The case is the kind of file advisors keep for the cautionary details. It landed in federal court in the Northern District of California, and it came with an unusual coda: the two men settled before the ink on the complaint had dried.
Here is what the SEC says happened. From at least December 2021 through about November 2025, the pair raised more than $80 million from roughly 190 investors, many of them senior citizens and retired, through two real estate loan funds. Mark Hanf founded Pacific Private Money Group and led it as chief executive. Nam Phan ran the funds’ day-to-day operations as chief operating officer. Together, the complaint says, they sold stakes in the Pacific Private Money Fund I and the Pacific Freedom Fund, promising steady returns from lending backed by real estate.
The lending story was mostly a story, the SEC alleges. The complaint says both funds ran at a loss for most of the period, and that the managers leaned on new investor money to cover what it calls “Ponzi-like payments” to earlier investors – making the funds look profitable when they were not. The Pacific Fund took in about $7.3 million from more than 60 investors, the filing says; the Freedom Fund raised about $76.5 million from around 130.
Some of the money, the SEC alleges, never went near a loan. The complaint says Hanf “misappropriated at least $7 million,” moving much of it through an entity he controlled and spending it on real estate holdings, the purse of a boxing match, a crypto venture, and his own household bills.
The sales pitch, meanwhile, stayed upbeat. In a 2024 webinar, Hanf told investors the fund delivered “reliable above-market returns regardless of market cycle,” according to the filing. Asked about returns, Phan told one investor they were “currently earning 8% annualized,” the SEC says.
The math caught up in the fall of 2025. The complaint says the managers kept a running list of unpaid redemption requests and paid out first to the investors most likely to complain. Payments stopped in October 2025. The funds and related Pacific Private Money entities filed for Chapter 11 bankruptcy on June 16, 2026. By February 2026, funds that owed investors almost $121 million had less than $17 million in recoverable assets, the SEC says.
Rather than fight, both men consented to judgment. The proposed settlements would bar them from the antifraud rules they were charged under and from selling securities, apart from their own personal accounts. Hanf faces an order to give back ill-gotten gains, plus interest and a civil penalty; Phan faces a civil penalty. The court will set the amounts later, on the SEC’s motion. As part of the deal, both agreed not to contest liability and, for the penalty phase, to let the court treat the complaint’s allegations as true.
For anyone running a practice, the tells are worth noting: fixed-return promises on illiquid private funds, cash moving between related entities, and performance claims that outran the actual books.
The case did not go to trial, and no court has ruled on the SEC’s claims. Both men consented to judgment, and the proposed judgments have not yet been entered. The court will set any monetary penalty later, on the SEC’s motion.
