Taiwanese-American financier Danny Pang (彭日成), accused by US federal regulators of defrauding investors out of hundreds of millions of dollars, was arrested on Tuesday by the FBI on charges he withdrew about US$360,000 from a company account through dozens of small transactions so he would not have to report the sum to federal regulators.
The US attorney’s office said the founder and former chief executive of the Private Equity Management (PEM) Group was arrested at his lawyer’s office in Santa Ana, California.
The Securities and Exchange Commission filed a lawsuit on Friday against Pang and Private Equity Management Group LLC, accusing him of bilking investors by falsely portraying returns as coming from investments in timeshare real estate and seniors’ life insurance policies. Regulators say the money in fact came from a ponzi scheme in which he used funds raised from newer investors to pay earlier ones.
A federal court froze his assets and those of his two California companies, Private Equity Management Group Inc and Private Equity Management Group LLC. The judge also appointed a receiver responsible for safeguarding assets held by Pang’s firms.
Pang founded a US$4 billion investment firm and has lived lavishly in Newport Beach.
He was to spend the night in jail and face arraignment yesterday, prosecutors said. He faces a maximum of 10 years in federal prison if convicted of structuring the cash transactions.
About 16,000 Taiwanese investors purchased more than US$700 million in securities sold by the PEM Group, Financial Supervisory Commission (FSC) Chairman Sean Chen (陳沖) said yesterday.
The legislature’s Finance Committee later passed a resolution requiring the FSC to prohibit banks from selling foreign securities until an investigation into the PEM Group’s activities has been completed.
The FSC chief agreed to the temporary ban, but persuaded lawmakers to limit the restriction to sales of foreign investment products to individual clients so that companies could continue to buy foreign securities.
Chen said the FSC had approached an international agency for assistance in its investigation in the hope of minimizing the impact on Taiwanese investors.
The banks that sold PEM Group products have until tomorrow to file applications for assistance in protecting their clients’ rights, Chen said, but added that he was not certain whether investors would be able to get their money back.
“As long as their life insurance policies and other papers are valid, they will probably not lose their entire investment,” Chen told the Finance Committee.
He dismissed local media reports that as many as 20,000 investors had been affected.
Chen told the committee that the PEM Group had sold its products through six local banks: Standard Chartered Bank (渣打銀行), EnTie Commercial Bank (安泰銀行), Bank SinoPac (永豐銀行), Cosmos Bank (萬泰銀行), Hua Nan Commercial Bank (華南銀行) and Taichung Commercial Bank (台中商銀).
Standard Chartered sold about US$221 million in PEM Group securities, Hua Nan US$205 million, Bank SinoPac US$146 million, Taichung Bank US$70 million, EnTie Bank US$52 million and Cosmos Bank US$48 million, Chinese Nationalist Party (KMT) Legislator Alex Fai (費鴻泰) said.
Bank SinoPac said it would not rule out joining forces with other banks in seeking to claim compensation for their clients.
Standard Chartered Bank said late last night it would repurchase all the PEM Group products it had sold at full face value plus accrued interest.
FRIDAY, SATURDAY: While Typhoon Champi might weaken, officials warned about large waves, while some transport services and tourist spots have been affected Typhoon Champi is forecast to have the greatest effect on Taiwan tomorrow and on Saturday, with a sea warning issued late last night and a land warning expected afternoon today, the Central Weather Administration (CWA) said yesterday. The storm’s projected track has shifted slightly westward and it could begin moving away from Taiwan toward Japan’s Kyushu island on Saturday, with the warnings potentially lifted as early as Saturday afternoon, CWA forecaster Chang Cheng-chuan (張承傳) said. As of yesterday afternoon, Champi was about 910km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, CWA data showed. Its maximum sustained winds had weakened slightly to
The Coast Guard Administration (CGA) yesterday urged China not to exploit typhoons to assert jurisdiction over the Taiwan Strait. The CGA issued the remarks after it found that China was shadowing eight Japan Coast Guard ships that sheltered in Taiwan proper’s western waters due to Typhoon Champi. Eight Japan Coast Guard (JCG) vessels sailed southward along the Taiwan Strait median line from 6am on Thursday, reaching waters southwest of Penghu County’s Cimei Island (七美島), outside Taiwan’s contiguous zone, which extends 24 nautical miles (44.4km) from the territorial sea baseline, it said. As the Japanese ships prepared for the typhoon, they were followed by
STAY CAUTIOUS: Rain is expected to begin easing this afternoon, but a CWA forecaster said that if the storm stalls or loops on its approach, heavy winds are likely Typhoon Champi, which caused widespread damage and injuries, and prompted road closures and evacuations across Taiwan yesterday, is expected to continue to bring heavy rain this morning, with up to 900mm of rain forecast for mountainous areas of New Taipei City, Taoyuan and Yilan County, the Central Weather Administration (CWA) said yesterday. At one point a super typhoon and one of the strongest storms in the Pacific this year, Champi was packing gusts of about 191kph near its center as of 8:30pm, the CWA said. Taipei, New Taipei City, Keelung, Taoyuan, Hsinchu city and county, Taichung; and Yilan, Miaoli, Changhua, Nantou, Yunlin
TOTAL COVERAGE: Champi’s outer band is expected to blanket the entire nation, with the center coming closest tonight or tomorrow before leaving tomorrow evening School and work across most of the nation has been canceled today, as Typhoon Champi is expected to skirt the northeast edge of Taiwan proper. As of 9pm, all municipalities except for Kinmen County had announced cancelations. Taitung County last night announced closures on Green Island (綠島) and Orchid Island (Lanyu, 蘭嶼), but did not announce for the rest of the county until 6am today. Stock market settlements scheduled for today would be postponed to the next business day, the Taiwan Stock Exchange said. The announcements came after the Central Weather Administration (CWA) yesterday expanded its land warning for Champi to 19 regions
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