Orange County Register

Photo by Bloomberg News

People who invested with Danny Pang’s Irvine-based Private Equity Management Group Inc. could lose up to $654 million, reports the Wall Street Journal today.

Court documents also revealed that Pang took “at least $83 million in allegedly inflated fees, loans and salary” from the company just before it was seized by federal regulators in April, said the paper.

The Wall Street Journal said a spokesman for Pang had no immediate comment, however, his attorneys in a court filing called the allegation he was paid $83 million “demonstrably false.”

Pang is accused of a massive investment fraud.

The Wall Street Journal cited several internal documents that were unsealed by the court including:

• A memo from the company’s then-general counsel saying he was “seriously concerned” about the practice of loaning investor funds to Pang and PEMGroup affiliates.
• An agreement signed by Pang April 9 pledging some of his personal properties to a PEMGroup affiliate as security for $9.6 million in loans previously taken from investors.
• A filing showed that PEMGroup transferred in late 2007 at least $10 million to an entity controlled by Mr. Pang, which he then used to buy a property in Newport Beach that is the site of Joe’s Crab Shack.

Read the full story HERE.(subscription required)

See these earlier on Pang and his legal problems …

• Receiver: Danny Pang misused millions
• Fund manager Pang’s lawyer: He’s no Madoff
• O.C. financier Pang to be freed
• O.C. financier Pang arrested

See these other stories on Orange County’s business legal problems …

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