Real Estate Loans or Ponzi Payments? SEC Says Bay Area Fund Executives Took $80 Million From Mostly Retired Investors

Published Oct. 12, 2026. Case statuses are current as of that date, based on SEC records.

For years, investors in two private funds run by a Novato, California, real estate lender were told their money would go into loans secured by real estate, and that they could expect preferred or fixed returns. The Securities and Exchange Commission now says much of what they were paid came from the next investor's money.

On Sept. 1, 2026, the SEC charged Mark D. Hanf, the former CEO of Pacific Private Money Group LLC (PPMG), and Hoai-Nam Chu Phan, also known as Nam Phan, the former chief operating officer of a PPMG subsidiary, with orchestrating an offering fraud that raised more than $80 million from about 190 mostly retail investors, "many of whom were retired senior citizens" [1].

What the SEC alleges

According to the SEC's complaint, filed in the U.S. District Court for the Northern District of California [1][2]:

• The pitch. From about December 2021 to November 2025, Hanf and Phan told investors in two PPMG private funds that their capital would be used to originate or purchase loans secured by real estate, and that they could expect preferred or fixed rates of return from that lending.
• The alleged reality. The SEC says the two regularly used new investor capital to make Ponzi-like payments to earlier investors, and that the touted returns came largely from new investor money rather than from fund earnings.
• Alleged misappropriation. The SEC alleges Hanf took more than $7 million of investor funds for his own personal benefit.

The scheme "began to unravel in the fall of 2025 as numerous investors demanded to withdraw their money and the defendants did not have sufficient funds to satisfy those requests," said Jason Lee, associate director of the SEC's San Francisco Regional Office. "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" [1].

The charges and the settlement

The SEC charged Hanf with violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5, and charged Phan with violating Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) and Rule 10b-5 [1].

Without admitting the allegations, Hanf and Phan each consented to a judgment, subject to court approval, that would permanently bar them from violating those provisions and from participating in the issuance, offer or sale of securities other than for their own personal accounts. Any disgorgement, interest and penalties against Hanf, and any penalties against Phan, are to be decided by the court later on the SEC's motion [1]. The SEC's litigation release on the case is LR-26627 [3].

In a parallel action, the U.S. Attorney's Office for the Northern District of California announced criminal charges against both men [1]. We did not review the criminal filings for this article. Hanf and Phan are presumed innocent of any criminal charge unless proven guilty. We found no public statement from either man or their lawyers in the SEC materials.

Why this matters to retirees

Private real estate lending funds are often marketed to retirees as steady income. The SEC's description of this case shows the risk: fixed payouts can continue for years even when the underlying business can't support them, until withdrawal requests expose the gap.

What an SEC civil case is (and isn't)

The SEC is a civil regulator. When it "charges" someone, it files a lawsuit in federal court or brings an administrative proceeding asking for remedies such as injunctions, repayment of allegedly ill-gotten gains (disgorgement), civil money penalties and industry bars. It cannot send anyone to prison. Criminal charges, when there are any, are brought separately by federal prosecutors, and a defendant in a criminal case is presumed innocent unless and until proven guilty.

Allegations in an SEC complaint are claims the agency must prove in court unless a defendant settles. When a defendant settles "without admitting or denying" the allegations, the court or the Commission enters an order, but the defendant has not conceded that the allegations are true. Throughout this article, statements about what happened are allegations or findings as described by the SEC, not established facts, unless we say a court entered a judgment or a defendant pleaded guilty.

Red flags in this case

• Preferred or fixed returns promised from a private fund, with little independent verification of loan performance.
• Payouts that continue smoothly until many investors ask to withdraw at once.
• A sales base of mostly retirees investing savings in private, illiquid funds.

How to check an investment before you hand over money

• Look up the person and the firm on Investor.gov and FINRA BrokerCheck. A clean search is not proof of legitimacy, but a missing or mismatched record is a reason to stop.
• Read the offering documents yourself, and ask a fee-only professional you found independently to read them too.
• Be skeptical of "guaranteed" or fixed high returns. Real investments carry risk, and promises of safety plus high yield are a classic warning sign.
• Be wary of pressure. Deadlines, "limited allocations" and repeated calls are sales tactics, not investment analysis.
• Don't let trust in a group replace due diligence. Fraud often spreads through churches, ethnic and professional communities, online chat groups and friends-of-friends referrals.

If you think you were affected

1. Keep everything: account statements, emails, texts, wire and payment records, and any marketing material.
2. Report it to the SEC at sec.gov/tcr. If a criminal case is involved, you can also contact the FBI at ic3.gov or the prosecutors' victim-witness office.
3. Watch for a receiver or fair fund. In some SEC cases, money is later returned to harmed investors through a court-appointed receiver or a distribution fund. Notices are posted on sec.gov.
4. Beware of "recovery" offers. People who lost money are often targeted again by scammers promising to recover it for an upfront fee. Legitimate receivers and the SEC do not charge you to file a claim.

Case status (as of Oct. 12, 2026)

Defendant	Court	Status as of Oct. 12, 2026	Source
Mark D. Hanf (former CEO, Pacific Private Money Group)	U.S. District Court, N.D. California (SEC civil)	Sued Sept. 1, 2026; consented, without admitting allegations, to judgment subject to court approval; money remedies to be set later. Parallel criminal charges announced; presumed innocent	[1], [3]
Hoai-Nam Chu Phan (aka Nam Phan), former COO of a PPMG subsidiary	U.S. District Court, N.D. California (SEC civil)	Sued Sept. 1, 2026; consented, without admitting allegations, to judgment subject to court approval; penalties to be set later. Parallel criminal charges announced; presumed innocent	[1], [3]

Statuses can change. SEC allegations are claims, not findings of wrongdoing, unless a court has ruled.

Sources

1. U.S. Securities and Exchange Commission, Press Release 2026-82, "SEC Charges San Francisco Bay Area Private Fund Executives with Multimillion Dollar Ponzi-Like Scheme," Sept. 1, 2026. https://www.sec.gov/newsroom/press-releases/2026-82-sec-charges-san-francisco-bay-area-private-fund-executives-multimillion-dollar-ponzi-scheme
2. SEC complaint, SEC v. Hanf and Phan (N.D. Cal.). https://www.sec.gov/files/litigation/complaints/2026/comp-pr2026-82.pdf
3. SEC Litigation Release No. 26627, Sept. 4, 2026. https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26627

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Corrections and updates: If you are named in this article, or represent someone who is, and believe anything here is inaccurate or out of date (including a dismissal, judgment, settlement or change in case status), please contact us at editorandchief@scammers.com. We will review it and update the article promptly.