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1DAVID
J.
VANHAVERMAAT,Cal.BarNo.175761Email:vanhavermaatdcmsec.
gOY
2LORRAINEB.ECHA"\iARRIA,Cal.BarNo.191860Email:echavarria1cmsec.g()v3PARIS
WYNN
h
Car
BarNo.224418Email:
w y n n p ~ s e c . g o v
4
AttorneysforPlaintiff5SecuritiesandExchangeCommissionRosalind
R.
T:xson,
RegionalDirector6MicheleWeinLayne,AssociateRegionalDirectorJohnM.McCoyIII,RegionalTrialCounsel75670WilshireBou1evara,
11
thFloorLosAngeles,California900368Telephone:(323)965-3998FacsImile:(323)965-39089
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11
UNITED
STATESDISTRICT
COURT
CENTRAL
DISTRICTOF
CALIFORNIA
CaseNo.
.CV09-2901
PSG
(Ex)
COMPLAINT
FOR
VIOLATIONS
OF
THE
FEDERAL
SECURITIESLAWSPlaintiff,
12
SECURITIESANDEXCHANGECOMMISSION,
13
14
vs.
15
16
PRIVATEEQUITYMANAGEMENTGROUPINC.;PRIVATEEQUITYMANAGEMENTGROUP,
tLC;
and
17
DANNYPANG,
18
19
20
21
22
23
24
25
2627
28
Defendants.
 
1PlaintiffSecuritiesandExchangeCommission("Commission")allegesas2follows:3
JURISDICTION
AND
VENUE
4
1.
ThisCourthasjurisdictionoverthisactionpursuanttoSections20(b),520(d)(l)and22(a)
of
theSecuritiesAct
of
1933("SecuritiesAct"),
15
U.S.C.
§§
6
77t(b),77t(d)(l)
&
77v(a)andSections21(d)(1),21(d)(3)(A),21(e)and27
of
the7SecuritiesExchangeAct
of
1934("ExchangeAct"),
15
U.S.C.
§§
78(u)(d)(l),878u(d)(3)(A),78u(e)
&
78aa.Defendantshave,directlyorindirectly,madeuse
of
9themeansorinstrumentalities
of
interstatecommerce,
of
themails,or
of
the
10
facilities
of
anationalsecuritiesexchangeinconnectionwiththetransactions,acts,
11
practicesandcourses
of
businessallegedinthiscomplaint.
12
2.
VenueisproperinthisdistrictpursuanttoSection22(a)
of
the
13
SecuritiesAct,
15
U.S.C.§77v(a),andSection27
of
theExchangeAct,
15
U.S.C.
14
§
78aa,becausecertain
of
thetransactions,acts,practicesandcourses
of
conduct
15
constitutingviolations
of
thefederalsecuritieslawsoccurredwithinthisdistrict,
16
anddefendantDannyPangresidesinthisdistrict.
17
SUMMARY
18
3.
Thiscaseinvolvestheongoingfraudulentofferandsale
of
securities
19
by
DannyPang("Pang")andtwoentitieshecontrols:PrivateEquityManagement20Group,Inc.("PEMG,Inc.")andPrivateEquityManagementGroup,LLC
21
("PEMG,LLC")(collectively,the"EntityDefendants,"andcollectivelywith22Pang,"Defendants").
23
4.Sinceatleast2003,PangandtheEntityDefendantshecontrolshave24beenengagedinafraudulentoffering
of
securities.Defendantsclaimedto
25
investorsthattheywoulduseinvestorfundsprimarilyforthepurpose
of
26purchasinglifeinsurancepoliciesfromseniorcitizensatadiscounttotheface27value
of
thepolicies,andtoinvestintimesharerealestate.Defendantsclaimthat
28
bothprincipalandinterestareinsuredand"guaranteed."Defendantshaveraised
-2-
 
1hundreds
of
millions
of
dollarsfrominvestors,primarilylocatedin
Taiwan;-
2Defendantshavemadethreematerialmisrepresentationstoinvestors:(1)the3source
of
thepurportedreturnswasclaimedtobeprofitsgeneratedbytheir4investmentsinlifeinsurancepoliciesandtimesharerealestate,when,infact,some5
of
thepurportedreturnswerepaidout
of
fundsraisedfromsubsequentinvestors;6(2)inatleastoneinstance,Defendantspresentedinvestorswithaforgedinsurance7policyinwhichthecoverageamounthadbeenalteredfrom
$31
millionto$1088milliontosupportafalseclaimthataparticularinvestmentwasentirelycoveredby9insurance;and(3)theDefendantsmisrepresentedtheeducationalandemployment
10
history
of
Pangbyfalselyclaimingthathehadreceivedbachelor'sandmaster
of
11
businessadministrationdegreesandthathehadworkedatthewell-known
12
brokeragehouse,MorganStanley.
13
DEFENDANTS
14
5.
PrivateEquityManagementGroup,Inc.isaNevadacorporation
15
locatedinIrvine,California.Pang,
as
itspresidentandadirector,controlsand
16
directstheactionsandoperations
of
thisentity.PEMG,Inc.servesastheparent
17
companyofPEMG,LLC,andthroughPEMG,LLCpurportstoinvestinlife
18
insurancepoliciesandinterestsintimesharerealestate.PEMG,Inc.offersand
19
sellsdebenturesissuedbyvariousentitiesitcontrols.
20
6.
PrivateEquityManagementGroup,LLCisaNevadalimitedliability
21
companylocatedinIrvine,California.Pang
as
amanagingmembercontrolsand
22
directstheactionsandoperations
of
thisentity.PEMG,LLCoffersandsells
23
debenturesissuedbyvariousentitiesitcontrols.PEMG,LLCpurportstoinvestin24lifeinsurancepoliciesandinterestsintimesharerealestate.
257.
DannyPangresidesinNewportBeach,California.Pangisthe26presidentand
is
adirectorofPEMG,Inc.Pangisalsoamanagingmember
of
27
PEMG,LLC.Panghassolecontrol
of
andaccesstoatleastsome
of
thebank
28
accountsintowhichinvestorfundshavebeenplaced.
-3-
of 00

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