Mark D. Hanf, 65, of Belvedere-Tiburon, California, founded Pacific Private Money Group in 2013 and built it into a family of real estate lending funds that promised investors steady monthly income from loans secured by property. Hoai-Nam Chu Phan, 58, of Novato, known as Nam Phan, joined the operating company in 2016 and became chief operating officer in 2020, running the day-to-day operations of the funds and talking directly to the people who put money in. According to the SEC, from December 2021 through November 2025 the two men raised more than $80 million from approximately 190 investors, many of them senior citizens and retirees, for two funds that had already stopped making money. The Pacific Fund was unprofitable from the end of 2021. The Freedom Fund was unprofitable from the end of 2022. Both kept paying out tens of millions of dollars in distributions and redemptions anyway, and the SEC alleges those payments came predominantly from new investor money. On September 1, 2026, the SEC sued both men in the Northern District of California.
The SEC’s complaint charges Hanf and Phan with violating Section 10(b) of the Exchange Act and Rule 10b-5 and Sections 17(a)(1) and (3) of the Securities Act, and charges Hanf additionally under Section 17(a)(2). It seeks permanent injunctions, civil penalties, orders barring both men from participating in any securities offering, and disgorgement from Hanf. The funds and their affiliated entities filed for Chapter 11 bankruptcy protection on June 16, 2026. Against almost $121 million in outstanding investments across the two funds, the total recoverable assets were estimated in February 2026 at less than $17 million.
Ranking Redemptions by Who Was Most Likely to Complain
The detail that captures the last months of the scheme comes from the complaint’s account of the autumn of 2025. By then the two funds were running out of money to pay distributions and redemptions even with new investor capital coming in. Hanf and Phan maintained a spreadsheet of outstanding investor redemption requests. Whenever new money arrived, the complaint says, internal discussions followed about which outstanding redemptions that new capital should be spent on, and those discussions included prioritizing redemptions for the investors most likely to complain. The queue was not ordered by who had asked first. It was ordered by who was most likely to cause a problem. In October 2025 both funds stopped paying anything at all.
The mechanics underneath had been in place for years. The Pacific Fund held a large portfolio of non-performing loans, and Hanf had lent a substantial share of its capital to a single borrower who later defaulted. Because the fund could not generate enough cash to cover even its expenses, the Freedom Fund and other affiliates began transferring money into it from at least December 2021. Those transfers were recorded on the books as short-term loans accruing interest. The principal and interest were, in large part, never repaid. By August 2022 the Pacific Fund had stopped originating new real estate loans altogether, while its offering memorandum continued to tell investors that all fund assets would be mortgage loans secured by real estate.
9% Returns, Never Below 6%, and a Webinar Called Consistent Income
The selling continued throughout. In a February 2023 email to a prospective investor, Hanf wrote that the Freedom Fund paid 9% on deposits over $1 million with 30-day liquidity and monthly distributions. At an in-person meeting in December 2024 he told prospective investors they would receive 9% and that he would never go below 6%. During a 2024 webinar he said the firm had delivered what he called reliable above-market returns regardless of market cycle, and presented a graph titled Freedom Fund Performance showing returns rising steadily from 2020 to 2023. The complaint states that by then most of those returns were being paid with new investor money rather than from any lending activity.
Phan’s contribution to the pitch was more granular. He hosted a 2024 webinar titled “How Investors Earn Consistent Income from Short-Term Real Estate Bridge Loans,” in which he walked through case studies of the kinds of loans the Freedom Fund typically funded, three examples all secured by real estate with strong borrower credentials. According to the SEC, by far the largest category of loans the Freedom Fund actually held at that point was unsecured loans to other Pacific Private Money entities, which remain largely outstanding. In an October 2024 email, an investor considering putting in more money asked Phan what the projected return would be. Phan replied that the investor was earning 8% annualized and that the rate might be increased above $600,000. He did not mention where the 8% was coming from.
$7 Million for Hanf, Including the Purse for a Boxing Match
Separately from the Ponzi payments, the SEC alleges that between April 2021 and July 2025 Hanf misappropriated at least $7 million by moving money out of the two funds and into Hanf Capital LLC, an entity he created, owned, and controlled, which provided no services to the funds. He also diverted money to Pacific Realty Development LLC, another entity he owned that had no connection to the business, and at times directly into his personal bank account. The funds’ internal records characterized these transfers as loans to Hanf’s personal entities. As of the June 2026 bankruptcy filings, those loans remained largely unpaid.
The complaint itemizes where the money went. Hanf used it to acquire, construct, service debt on, and pay property taxes for various real estate holdings. He used it to increase his personal equity stake in a new Pacific Private Money fund. He used it to pay his home mortgage and his personal credit card bills. He invested some of it in a purported crypto asset venture. And he used investor money to fund the purse of a boxing match. None of this was disclosed to the retirees whose money was supposed to be secured by deeds of trust on California property.
False Account Statements and Fabricated K-1 Tax Forms
What elevates the case beyond misleading marketing is what the SEC says both men did to keep investors from finding out. The complaint alleges that Hanf directed the creation of false account statements and false Schedule K-1 tax forms that were provided to investors, purporting to reflect returns and income generated by the funds’ activities. Phan is alleged to have directed the creation of false account statements as well. A Schedule K-1 is the document a partnership issues to report each investor’s share of income for tax purposes, and investors file their returns based on it. Fabricating one does not merely mislead an investor about performance. It puts a false document into that investor’s tax filing. The SEC describes these documents as having helped perpetuate and conceal the scheme by giving investors a false sense that their investments were performing and their returns were legitimate. The pattern of paying old investors with new money while reporting invented performance is the same structure documented in the case against Leor Moshe of Capital Funding ASAP, who raised $47 million from members of his own community.
Conclusion
Mark Hanf spent a decade building a reputation as a real estate lender and told investors their money would be secured by property. By the end of 2021 his first fund was losing money and by the end of 2022 so was his second, and he and Nam Phan kept selling both, raising more than $80 million from around 190 people, many of them retired. They paid the old investors with the new ones, sent out account statements and tax forms the SEC says were false, and Hanf took $7 million for himself, spending part of it on a boxing match purse. When the money ran short they sorted the redemption queue by who was most likely to complain. In October 2025 the payments stopped. The funds owe almost $121 million and can recover less than $17 million.
