Originally Posted by WSJ

The Talented Mr. Pang

From his boyhood in a Las Vegas motel to his final days in a California mansion, Danny Pang charmed and deceived. He left a trail of clues: gambling debts, a murdered wife and investors crying fraud.

With its vintage neon sign advertising "Heated Pool," the Rummel Motel in the early 1980s was the sort of place budget travelers would bunk down while they tried their luck at the slots in the nearby Las Vegas Strip. It also was home to a young Taiwanese immigrant, Danny Pang, who as a teenager lived in the motel owned by his relatives. Unlike the other immigrant teens he hung around with, Mr. Pang seemed to have a lot of money and frequently gambled at the casinos.

"He'd take you to the steakhouse, a show, pay everything," says Jeffrey Liu, whose family co-owned a neighboring motel. "Everybody wanted to be with him."

One day, Mr. Liu and another friend spotted Mr. Pang taking money from the cash register at a motel owned by the friend's family, Mr. Liu says. They confronted Mr. Pang and he denied stealing. The boys let it slide, but made Mr. Pang pay for their dinner, says Mr. Liu.

For Mr. Pang, it would become a pattern for the rest of his life—a flashy lifestyle that drew people to him, along with repeated accusations of deception that progressed from petty theft to a final, trans-Pacific heist. At the time of his death in September at age 42, Mr. Pang was battling charges by federal regulators that he ran a massive Ponzi-like scheme from his Irvine, Calif., investment firm. A court-appointed receiver accused him of using the firm as a "personal piggy bank" to help finance lavish habits that included private jets, luxury cars and gambling.

The still-unraveling scandal cost his investors, most from his native Taiwan, as much as $600 million, according to estimates from the receiver. The coroner's report is expected by early January and with it, a ruling on whether the financier committed suicide.

Mr. Pang steadfastly maintained that he was innocent of the charges against him. In a statement earlier this year, he said he had "conducted himself lawfully in his business and in his personal life." A spokesman for his family said, in a statement Friday, "Danny Pang was a wonderful husband, father, son and brother and his family misses him dearly. It is unfortunate he will never have the opportunity to defend himself against the rash of sensational, and completely unproven, allegations that were trumpeted by the government with tremendous fanfare." He added, "It is time to let Danny rest in peace."

Danny Pang was born in Taipei on Dec. 15, 1966, the oldest of three children. His father, he told associates, was in the trading business, while his mother hailed from an affluent furniture-manufacturing family. He went to a prestigious private school, where he frequently got into fights, recalls a classmate at the time, Joyce Mao.

He arrived in Las Vegas as a teenager and went to high school there. After graduating in 1984, he roomed for a period with Mr. Liu at the University of Nevada, Reno. They once sat next to each other in a Nutrition class, says Mr. Liu, now an obstetrician-gynecologist in Las Vegas, who recalls Mr. Pang boasting about acing a test in the class.

While in Reno, a friend's bank ATM card went missing soon after she had withdrawn cash with Mr. Pang standing next to her. She told others that a bank security camera showed that Mr. Pang had used the card. "Danny, after he heard it, he said he found the ATM card on the floor," Mr. Liu says, adding that Mr. Pang returned the cash.

A spokeswoman for the University of Nevada, Reno, says that Mr. Pang never completed his application to the school and "we have no record of him ever attending classes."

Mr. Pang resurfaced at the University of California, Irvine, a sun-dappled campus popular with students from immigrant families. Mr. Pang drove a BMW, friends say. He also became a student leader, elected chairman of the Asian Pacific Student & Staff Association for the 1988-89 school year.

In the spring of 1989, the Tiananmen Square democracy protests in China broke out, and the 22-year-old Mr. Pang was a visible pro-democracy activist. In an article in the Los Angeles Times on the campus protests, he argued the Chinese government wouldn't dare crack down on such a high-profile protest movement, and was quoted as a "UCI senior." A fellow student leader, Paul W. Wong, says Mr. Pang was "the point person" on a petition drive and other activities around the Tiananmen protests, and was involved in numerous meetings with faculty members and the school's administration.

Danny Pang lashes out at a photographer outside a federal courthouse in Santa Ana, Calif., in April after posting a $1 million bond. He was charged with structuring large cash transactions to avoid currency-reporting rules.
University records show Mr. Pang wasn't enrolled at the time. School officials say he was never officially enrolled except for a single 1986 summer term, and never received the undergraduate and MBA degrees he later claimed.

In the years after his supposed graduation, Mr. Pang worked trying to bring deals to a small real-estate development firm in Santa Ana, Calif. R. Lang Cottrell, then a partner at the firm, says another partner brought in Mr. Pang, saying he could "sell snow to an Eskimo." Mr. Pang often spoke about how wealthy his family was and how much money he could bring to various deals. But after associates saw Mr. Pang labor for hours over a short letter, the firm checked with the university and discovered Mr. Pang had faked his resume. "It got to the point where I didn't believe anything he told me," Mr. Cottrell says.

Mr. Pang severed his ties with the office after confessing that he had gambled away $2 million sent by relatives in Taiwan that was supposed to be used to pay off the mortgage on the Rummel or another Las Vegas motel owned by his family, says another partner, Jay Meehan.

Elaine Fan first met Mr. Pang while she was in college in California, and again when she was 25 on a flight back to her native Taiwan. They dated for less than a year when he asked her to marry him, she says. He threw an engagement party at the Ritz-Carlton Laguna Niguel, a resort on a bluff overlooking the Pacific Ocean. Several dozen guests dined in the hotel's executive dining room.

Unknown to Ms. Fan, her fiancé was dating another woman, Janie Louise Beuschlein, whom he had met at a strip club, where she worked to help support two children.

Mr. Meehan asked him, "Danny, are you going to break it off with Janie?" He says Mr. Pang replied, "No problem. I can get married and still have a girlfriend.'"

Not long after the party, Ms. Fan began receiving phone calls from a woman she knew only as Janie, who said she was living with Mr. Pang and recently had his child, Danny Pang, Jr. She confronted Mr. Pang, who promised he had broken up with Janie, Ms. Fan says. But Janie kept calling. Ms. Fan broke off the engagement. "I just couldn't take it," says Ms. Fan, who still lives in the Los Angeles area.

In May 1993, Mr. Pang married Ms. Beuschlein. The marriage was tempestuous. The police were called to their home four times for domestic-disturbance complaints, including a 1993 incident in which Ms. Pang said she was afraid Mr. Pang "was going to kill her." Telling friends she wanted a divorce, Ms. Pang in May 1997 hired an investigative agency, which observed her husband holding hands with another woman in Northern California. She confronted Mr. Pang over the phone, according to a law enforcement official involved in the case.

Around noon the next day, as Ms. Pang was leaving to meet with the investigator, an elegantly dressed stranger rang the doorbell of their Orange County home, court records show. Ms. Pang came to the door with her young son by her side. The man produced a gun and started chasing her through the house. He shot her dead in a mirrored closet off the master bedroom. It was the Pangs' fourth wedding anniversary.

The trial of a suspected gunman, a onetime lawyer of Mr. Pang's, ended in a hung jury years later. Mr. Pang denied any involvement. He didn't testify at the trial, citing his Fifth Amendment rights.

The glitzy suburban sprawl of Orange County, Calif., is home to more than its share of financial scams. The anonymous glass-and-concrete office buildings of Irvine and Newport Beach are filled with the latest can't-miss ventures, some legitimate, some not. This was the milieu in which Mr. Pang operated, as he bounced from one business to another.

Mr. Pang, whom associates say could be charming and persuasive despite his choppy English, wore expensive suits even during the times he was near broke. A heavy gambler, he was repeatedly pursued for gambling debts and beat up on occasion, former colleagues say.

In the early 1990s, Mr. Pang reported to police being the victim of a convoluted extortion plot involving a few hundred thousand dollars in property. The police report isn't clear on the outcome. A few years later he became a partner at a Silicon Valley venture capital firm backed by Taiwanese money, in part because his family put up some of the fund's money, the firm's then-chief executive Michael Hsu has said. He left in 1997 under circumstances that remain in dispute. Mr. Hsu said Mr. Pang stole $3 million by forging signatures on bank accounts, which Mr. Pang denied.

Mr. Pang was sued several times. In one suit, an investor claimed he was fleeced of $80,000 in an abortive high-tech venture, and in another, his stepson accused Mr. Pang of defrauding him out of the insurance proceeds from Janie Pang's death. Both cases were settled out of court.

Mr. Pang's luck started to turn in the late 1990s, when he met an Orange County entrepreneur named Chas Radovich at a Laguna Beach nightclub, Club M. A Serbian immigrant who came to the U.S. as a child, Mr. Radovich has been involved in a series of ventures, from a now-defunct telecom firm to an allergy treatment company.

For two years starting in 2000, Mr. Radovich says he let Mr. Pang use office space and phones, free of charge, in return for a promise he'd be cut in on any deals. Instead, Mr. Pang persuaded many of Mr. Radovich's associates, including his then-chief operating officer, to join his own financial firm, says Mr. Radovich, now 50 years old. Mr. Radovich says he never saw a dime.

Mr. Radovich also says Mr. Pang once called him in a panic, saying he owed $300,000 on a stock margin call. Mr. Radovich says he loaned Mr. Pang the money from his parents' account, on the promise it would be repaid in a week. It wasn't. Last year, he says, with his parents in need of cash, he finally received a check from Mr. Pang—for $9,000. "Danny was unscrupulous, nothing more than a fast-talking con man," Mr. Radovich says.

The financial firm Mr. Pang incubated at Mr. Radovich's office turned into Private Equity Management Group Inc., or PEMGroup. Based in Irvine, the firm set out to raise money in Taiwan by promising above-market interest rates on notes. Buyers were told that the money was to be invested in assets in the U.S., including in buying up the rights to collect on life insurance policies owned by elderly people.

Although the firm had no money at the start, Mr. Pang told associates that the only way to win over investors was to project an air of success. Nasar Aboubakare, PEMGroup's No. 2 executive who was fired in 2007, says Mr. Pang on one early trip insisted on staying at the presidential suite at the Grand Formosa Regent Taipei, where he ordered up lavish banquets and spent $10,000 on a night at a local karaoke bar. Mr. Aboubakare, the only one with any money, says he was stuck with an $80,000 American Express bill from the trip.

Mr. Pang dropped names of important people he was supposedly doing business with and boasted about deals he had done or money he controlled, associates say. He falsely claimed on his resume to have been a senior Morgan Stanley executive, and told Mr. Radovich he had once worked with the famous junk bond trader Michael Milken at Drexel Burnham. PEMGroup investors also were promised that any losses would be covered by special insurance policies taken out from major international firms. But PEMGroup bought only a fraction of the insurance it promised. At one point it forged a fake insurance policy and sent it to the Taiwan unit of Standard Chartered PLC, according to court documents.

Eventually, major Taiwanese banks persuaded 16,000 individual investors to put more than $800 million into Mr. Pang's firm.

As part of Mr. Pang's pitch to some Taiwanese investors, he said PEMGroup was backed by the wealthy Irvine family, which traces its fortune to an ancestor who bought up a large part of the land in Orange County in the 19th century. Although the family has long since sold Irvine Co., which owned the land, the Irvine name still has cachet in parts of Asia.

In marketing presentations to Taiwanese banks, PEMGroup claimed a major shareholder was "Irvine Capital Holdings LLC," whose chairman was listed as Morton Irvine Smith, described as a "representative of the USA's renowned Irvine family." Mr. Pang brought Mr. Smith on a marketing trip to Taiwan, where he was introduced to local bankers.

Irvine Capital was a Nevada-registered company created by Mr. Pang and his associates, while Mr. Smith was paid a nominal salary by Mr. Pang. Mr. Smith, 44 years old, says he didn't have any real role in the company and never saw any of the marketing presentations that claimed otherwise. He also says he didn't know details of Mr. Pang's business dealings.

His mother, Joan Irvine Smith, 76 years old, says her son doesn't control any of the family's money. "We had not one red cent in this venture," she says. "I would no more put any money in a project of Morton's like that than I would go to the moon." Ms. Smith says she believes Mr. Pang used her son as an unwitting "front guy."

Mr. Aboubakare, the former PEMGroup executive, says Mr. Smith's main contribution was to greet Taiwanese bankers when they came to visit the firm's Irvine headquarters, and show them around the nearby Irvine Museum.

Mr. Pang ratcheted up his already free-spending lifestyle after the money started pouring into PEMGroup. Court records from the Securities and Exchange Commission suit against Mr. Pang show PEMGroup diverted investors' money into buying three jets, including a Gulfstream IV that Mr. Pang used for overseas jaunts and trips to Las Vegas. Mr. Pang extracted an additional $67 million from the firm in salary, fees and loans, the court-appointed receiver estimates. The receiver traced $360,000 to a girlfriend of Mr. Pang's and $1.7 million to a bookie. Mr. Pang sent $1 million to a Las Vegas casino, according to a person familiar with the matter.

As of April, Mr. Pang and his second wife together owned five vehicles, including a $189,000 Aston Martin and a $215,000 Mercedes coupe, state vehicle records show. Mr. Pang turned in a sixth vehicle, a leased Bentley, after stepping down from PEMGroup.

PEMGroup made a number of more mainstream investments, including loans to a start-up hotel venture, eSuites Hotels LLC, and a martial-arts apparel maker, Tapout LLC. Executives at both firms praised Mr. Pang as a savvy financier.

But many of PEMGroup's deals went sour, leading to what federal authorities later described as a Ponzi-like scheme in which original investors were repaid, or their investments supported, with money from new investors.

The party came to a screeching halt in April. The Wall Street Journal published a page-one article raising questions about Mr. Pang's credentials and about whether his firm might be swindling investors with a Ponzi scheme. He vehemently denied all the allegations, but stepped down the next day. The SEC obtained a court order seizing control of his firm. Mr. Pang later was charged with a criminal count of arranging cash transactions to keep them under the $10,000 federal reporting requirement designed to combat money laundering.

Amid an outcry after the scandal broke, the Taiwanese banks have agreed to cover any losses sustained by their customers in PEMGroup.

In the middle of the afternoon on Friday, Sept. 11, police say Mr. Pang's mother discovered the financier lying in bed, not breathing, at his home in a gated oceanfront community in Newport Beach, Calif. A family friend called 911. He was pronounced dead at a local hospital early the next morning.

Mr. Pang's second wife, Sheanna, is caring for a young daughter and Mr. Pang's now college-age son. The SEC and official receiver are continuing to try to reclaim what remains of the financier's wealth. Mr. Pang also died without a will, requiring a separate court action to look after his affairs.

At the time of his death, Mr. Pang was confined to his home most of the time, wearing an electronic monitoring device around his ankle. He told several associates the charges were false and he was going to be vindicated.