Accused financier linked to property in Costa Rica

May 8, 2009

The turmoil on Wall Street has seemingly seeped a finger into Costa Rica, as the owner of a large tract of land here stands accused of fraud, the Wall Street Journal reports.

The assets of a company controlled by Danny Pang, a California-based financier who jointly owns a 2,000-acre oceanfront property in the southern Pacific zone, were frozen after the Securities and Exchange Commission (SEC) alleged he defrauded investors of hundreds of millions of dollars by misrepresenting investments, according to the Wall Street Journal.

The SEC ordered him to “repatriate assets sent overseas and turn to over to the court all of his passports” at the end of April.

The SEC alleges that Pang – who heads up Irvine-based Private Equity Management Group, Inc. – was involved in a so-called Ponzi scheme in which he falsely claimed that investor returns would come from proceeds on insurance policy investments, when in fact they came from money raised by new investors.

The SEC also alleged that Pang lured investors by presenting false credentials. He posed as a former vice president with Morgan Stanley & Co. with an MBA from the University of California at Irvine, when in fact he never worked with Morgan Stanley nor did he obtain a degree from that university.

“Pang´s alleged use of phony credentials and false insurance coverage to guarantee his investments underscores how critical it is for investors to exercise due diligence before entrusting their savings to promoters,” said Rosalind R. Tyson, Director of the SEC´s Los Angeles Regional Office in a statement.

Pang´s Costa Rica property, known as Punta Dominical, is one of the largest parcels of developable land in the area, boasting two miles of coastline. Previous owners had previously developed several residential communities.

Members of the development team were unable to be reached for comment at The Tico Times´ deadline.

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