Legal News

Law Blog Obituary: Danny Pang

By Ashby Jones

The Danny Pang case took a turn for the tragic over the weekend. Pang, a 42-year-old Southern California businessman accused of a large fraud by federal securities regulators, died over the weekend in a Newport Beach, Calif., hospital after being rushed from his nearby home by paramedics. Click here for the WSJ story; here and here for the LAT’s.

An autopsy was done on Sunday; A coroner spokesman said a cause of death wouldn’t be given until the results of toxicology tests are known, which usually takes two to three months. He said there wasn’t evidence of foul play.

A neighbor said he saw police remove four or five small bags of evidence from the Pang house. Sgt. Evan Sailor, a spokesman for the Newport Beach police, said procedures call for an investigation if authorities suspect suicide or foul play. Sailor said the police hadn’t found evidence of foul play but didn’t know if Pang’s death was due to natural causes or was self-induced.

A front-page WSJ article in April raised questions about Pang’s business activities as well as past educational and employment claims. A former president of the firm Mr. Pang headed — Private Equity Management Group Inc. in Irvine, Calif. — told the Journal that the Taiwanese immigrant had admitted to him that part of the enterprise involved a Ponzi scheme. Click here, here, here for earlier LB posts about Pang, following the initial WSJ story.

Two weeks after the Journal story appeared, the SEC filed suit against Pang in Santa Ana, Calif., federal court. The SEC suit alleged that Pang defrauded investors, mostly in Taiwan, of hundreds of millions of dollars. The SEC said Pang told investors he would produce profits by buying life-insurance policies at a discount. The SEC alleged the insurance policies didn’t generate enough profit to cover costs or meet the promised investor returns. Instead, some investors were paid from money obtained from new investors, the SEC said.

A federal judge froze Pang’s assets and appointed a receiver. In late April, federal prosecutors charged him with illegally structuring cash transactions to avoid reporting requirements. Pang pleaded not guilty and was confined to his Newport Beach home by a judge.

A statement released by Pang’s family said they were “shocked and saddened by Danny’s sudden and tragic passing. Danny was a wonderful husband, loving father, and honest businessman. For the past five months, Danny was subjected to a relentless attack of innuendo and false allegations, and was denied any opportunity to defend himself.”

Full post as published by Law Blog - WSJ.com on September 14, 2009 (boomark / email).