There was some confusion in the comments about what was meant by Taiwanese scammer Danny Pang’s being “charged.”
This should be pretty straightforward now.
Pang has been arrested by the FBI.
More on the scam (bigger than Dreier, smaller than Madoff) and the BigLaw involvement, after the jump.
Where does Pang fit in the hierarchy of Ponzi schemers? According to the Wall Street Journal,
Sean Chan, chairman of Taiwan’s Financial Supervisory Commission, said in testimony before a regularly scheduled legislative session that his agency has instructed local banks that distributed securities from Private Equity Management, or PEMGroup, to come up with plans by May 1 to help protect those investors.
He said the investors paid a total of about $700 million for those securities, confirming an earlier estimate by another regulator.
But in the arrest papers, Pang is only accused of “smurfing” (also known as “structuring”), which is the practice of breaking large cash transactions into smaller transactions so as not to trigger various financial-reporting obligations. It’s particularly common among gamblers, as Pang is reported to be.
The smurfing is low-level money laundering, but it’s a good enough crime to get Pang in custody right away. Expect the FBI and other agencies to add more charges soon. That follows on the heels of an asset seizure in the wake of the civil charges filed by the SEC. Pang’s lawyer wasn’t happy about that:
David Schindler, a lawyer for Pang, said he was troubled that the SEC sought an asset freeze without getting in touch with his client first.
“There’s no reason why this needed to be litigated in secret,” Schindler said in a telephone interview. Schindler declined to comment on the specific allegations against Pang.
As we previously reported, Schindler (Berkeley BA ‘83, UCLA JD ‘87) is a litigation partner at Latham & Watkins.
Latham isn’t the only LA firm in on the action, though: Gibson Dunn & Crutcher has been retained by the board of directors to conduct an “investigation of the operations of the company.”
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