By Edvard Pettersson and Joe Sabo
Sept. 13 (Bloomberg) -- Danny Pang, the founder of Private Equity Management Group Inc., who U.S. regulators claim bilked Taiwanese investors, died yesterday, a spokesman for the Pang family said. He was 42.
Pang was taken from his Newport Beach, California, home to Hoag Hospital the afternoon of Sept. 11 by paramedics who had responded to a call from the house, said Sergeant Doug Jones of the Newport Beach Police Department.
Charles Sipkins, a Pang family spokesman, confirmed the death and declined to comment further. Pang’s lawyer, James Riddet, wasn’t available.
Pang, who was free on $1 million bail, pleaded not guilty on July 27 to charges in a separate criminal case that he structured cash withdrawals to avoid having to report them. He was charged in an indictment with two counts of making a total of about 50 withdrawals in amounts of as high as $9,900 to evade a U.S. law that requires reporting cash withdrawals of $10,000 or more.
A trial date was set for Sept. 15, though it was postponed last month to August 2010.
The U.S. Securities and Exchange Commission accused Pang of lying to Taiwanese investors about his credentials, forging insurance documents and paying existing investors with funds raised from new ones, while claiming the returns came from investments in life insurance policies.
$823 Million Invested
The financier was arrested in the criminal case in April, shortly after the SEC obtained an emergency order freezing the assets of Irvine, California-based PEMGroup.
PEMGroup’s investors, including eight financial institutions and about 35 wealthy individuals, have $823 million invested with PEMGroup, according to a May 6 report by the receiver. The underlying assets would be worth $193 million to $360 million, the receiver said in an August status report.
Thomas Mrozek, a spokesman for the U.S. Attorney’s Office in Los Angeles, said in an e-mail that his office didn’t have confirmation of Pang’s death. In past cases, U.S. prosecutors have dismissed the case against a defendant upon the receipt of a death certificate, Mrozek said.
The Wall Street Journal reported that Newport Beach police got a report that there was a dead body on Pang’s block yesterday. A spokesman for the department told the newspaper he couldn’t explain that report, though he told the Journal that Pang was alive when he was taken to the hospital.
The case is U.S. v. Pang, 09-00161, U.S. District Court, Central District of California (Santa Ana.)