Mark D. Hanf built Pacific Private Money around a familiar proposition in American real estate: investors provide the capital, borrowers put up property as security, and everyone gets paid through the interest generated by short-term loans. The business grew into a network of companies and investment funds, marketed as a way to earn steady returns without directly managing real estate loans. But federal prosecutors and the Securities and Exchange Commission now say that behind the polished investment pitch was a much different financial operation, one in which new investor money was used to keep older investors paid while losses mounted.
Hanf, 66, of Tiburon, California, is the founder and former chief executive of Pacific Private Money Group LLC. Hoai-Nam Chu Phan, 58, also known as Nam Phan, worked at Pacific Private Money Inc. beginning in 2016 and became chief operating officer in 2020. The two are now at the center of parallel federal civil and criminal cases over what authorities describe as a multimillion-dollar, Ponzi-like investment scheme. Hanf faces charges of conspiracy to commit wire fraud and money laundering, while Phan faces the wire-fraud conspiracy charge. Neither has been convicted.
The scale of the collapse is substantial. According to the U.S. Department of Justice, Pacific Private Money funds raised approximately $103 million from more than 175 investors between December 2021 and December 2025. The SEC’s civil complaint focuses on two funds, Pacific Private Money Fund I and Pacific Freedom Fund, which together raised more than $80 million from approximately 190 primarily retail investors during roughly the same period. Many were retirees or older investors looking for regular income rather than speculative gains.
Pacific Private Money was not a newly created operation when the alleged misconduct began. Hanf founded the business in 2008 after building a career in real estate, and the company promoted itself as an alternative lender specializing in private and hard-money loans. Its own historical material described Hanf as a broker and private-money specialist who had spent decades working in real estate. At one point, the company’s website presented testimonials from investors praising the reliability of its monthly distributions and the professionalism of Hanf and his team.
The investment model appeared straightforward. Money was pooled into funds and was supposed to be used to originate or acquire loans secured by real estate. Investors were promised preferred or fixed returns generated by interest and fees from those loans. The SEC complaint says the Pacific Fund was launched in 2013 and the Freedom Fund followed in 2020. Both were controlled within the wider Pacific Private Money Group structure, with Hanf at the top and Phan handling day-to-day operations.
According to the SEC, the critical break came in 2021. The Pacific Fund had become unprofitable, with a significant portion of its loans no longer performing. One particularly large borrower defaulted after Hanf had committed substantial fund capital to the borrower. By December 2021, the fund did not have enough operating cash to cover expenses, investor distributions and redemptions. Instead of confronting investors with the deteriorating position, regulators say money began moving between Pacific Private entities.
The transfers were recorded internally as short-term loans, but the SEC says much of the principal and supposed interest was never repaid. Meanwhile, the Pacific Fund continued paying existing investors tens of millions of dollars. The fund also continued taking money from new investors. The SEC says approximately $7.3 million was raised from more than 60 investors in the Pacific Fund during the relevant period, despite its underlying financial problems.
The newer Freedom Fund developed a similar problem. The SEC says it became unprofitable in 2022, with non-performing loans and rising interest rates hurting its ability to originate new business. Yet the fund continued accepting new capital and paying investors. Regulators allege that approximately $76.5 million was raised from about 130 investors in the Freedom Fund, with tens of millions of dollars paid out while the fund itself was unable to generate enough cash to support those distributions.
That is where the government’s description of the operation becomes especially serious. Rather than returns being generated primarily through successful real estate lending, the SEC says new investor money was used to make distributions and redemptions to earlier investors. In other words, money coming into the system helped create the appearance that the funds were performing even as their underlying businesses were losing money. The agency describes the arrangement as “Ponzi-like,” while prosecutors say the conduct ultimately amounted to a conspiracy to defraud investors.
The allegations go beyond moving money between funds. The SEC says at least $7 million of investor money was diverted for Hanf’s personal benefit. According to the complaint, funds moved into entities controlled by Hanf, including Hanf Capital LLC and Pacific Realty Development I LLC. The money was allegedly used for real estate acquisitions and construction, property taxes and debt, an increased personal stake in another Pacific Private fund, a purported cryptocurrency venture, a boxing-related payment, credit-card bills and Hanf’s mortgage.
The SEC also alleges that internal records characterized much of the money transferred to Hanf’s personal entities as loans even though those loans remained largely unpaid when the companies entered bankruptcy. The regulator says Hanf also directed the creation of false account statements and Schedule K-1 tax forms that showed investors returns and income that the funds had not actually generated.
Public statements made to investors are now another important part of the case. In one example cited by the SEC, Hanf told a prospective investor in 2022 that Freedom Fund capital was primarily used to fund loans that would be sold to third parties. At a 2024 webinar, he reportedly described the fund as producing “above-market returns” and presented performance figures showing increasingly strong returns. The SEC says those presentations failed to disclose that much of the money being paid to investors was coming from new investors rather than legitimate lending profits.
By the fall of 2025, the structure was becoming increasingly difficult to sustain. The SEC says Hanf and Phan maintained a spreadsheet tracking outstanding redemption requests and discussed how incoming investor capital should be used, including prioritizing investors who were more likely to complain. In October 2025, distributions and redemptions stopped. Two months later, Pacific Private Money brought in a chief restructuring officer.
The numbers that emerged after the collapse were stark. The SEC says investors had almost $121 million outstanding in the Pacific and Freedom funds, while recoverable assets were estimated at less than $17 million by February 2026. That gap does not automatically translate into a final investor loss because bankruptcy proceedings and asset recoveries are still underway, but it shows why investors could face substantial losses.
California regulators had already taken action before the federal charges were announced. The California Department of Financial Protection and Innovation suspended Pacific Private Money’s lending license in March 2026 after the company reported a severe liquidity crunch. The license was subsequently revoked in April after the company failed to file a required annual report. A May state order also accused Hanf, Phan and affiliated entities of using misleading statements in securities sales and said the broader enterprise had raised at least $139 million from more than 400 investors across five funds beginning in 2013.
Hanf’s regulatory history is also relevant. California’s public real estate licensing records show a 2014 disciplinary action involving his broker license. Contemporary reporting and state records say a prior audit found investor funds had been commingled in accounts under his control rather than maintained in required trust accounts. The discipline resulted in a suspension that was stayed in part and financial penalties. Hanf had also filed for Chapter 7 bankruptcy protection in 2007, reporting more than $2 million in debt and about $24,000 in assets, according to reporting based on court records.
The current legal picture is now considerably more serious. On September 1, 2026, Hanf and Phan appeared in federal court in San Francisco after prosecutors filed an information charging them with wire-fraud conspiracy. Hanf also faces money-laundering charges tied to an alleged transaction involving criminally derived property. Both waived indictment. Prosecutors say each could face up to 20 years in prison on the conspiracy count if convicted, while Hanf faces a potential additional maximum of 10 years on the money-laundering count.
The defendants’ position is important to the story. They have not been convicted, and criminal allegations remain allegations unless proved beyond a reasonable doubt. The Ark reported that both pleaded not guilty at their September 1 appearance. At the same time, both Hanf and Phan agreed to settle the SEC’s civil case without admitting the allegations. The proposed judgments would permanently bar them from participating in the securities business, with monetary penalties, disgorgement and other amounts to be determined by the court.
The corporate side of Pacific Private Money has also entered bankruptcy. Thirteen related entities filed Chapter 11 protection on June 16, 2026. The company’s own current notice confirms that operations have been discontinued and directs creditors and account holders to the bankruptcy claims process. Bankruptcy proceedings are now central to determining what assets can be recovered and how much investors and other creditors ultimately receive.
The fallout has produced additional civil litigation. One federal lawsuit filed in April by investment entities accused Hanf, Phan and affiliated companies of routing roughly $75.8 million among entities controlled by the defendants. The case names Hanf Capital, Pacific Realty Development I, Pacific Mortgage Capital, Pacific Private Money Fund, Pacific Freedom Fund and other related entities. The allegations in that civil case remain disputed and have not been established by a final judgment.
The bankruptcy case is still digging into what happened. Recent bankruptcy filings show the official committee of unsecured creditors has sought permission to examine Hanf, Phan and other people and companies connected to the failed enterprise, including Hanf Capital and Pacific Realty Development I. That means the financial story is not finished. Investigators and creditors are still attempting to trace assets, understand transfers and determine how much money can ultimately be returned to investors.
For Hanf, the business he built has effectively ceased operating. Pacific Private Money says its companies have discontinued operations and are no longer providing loans. Hanf’s professional profile and older company material remain online, but his current role is dominated by the federal criminal case, the SEC enforcement action and the bankruptcy fallout rather than the private-lending business he once promoted.
The broader warning is difficult to miss. Pacific Private Money did not sell investors a lottery ticket or an obviously exotic product. It sold a familiar financial story built around real estate, recurring income and professional management. Some investors reportedly placed retirement money and life savings into the funds. The allegations now suggest that the appearance of steady performance survived long after the underlying economics had deteriorated. That is precisely why this case matters beyond one failed lender: when investment returns look dependable, the most important question is not simply what the return is, but where the money actually comes from.
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