Huffman calls for FBI, SEC probe of Pacific Private, Tiburon founder

Investors who say a Tiburon man’s lending company absorbed their retirement savings — and may never return them — gained a congressional ally last week.

U.S. Rep. Jared Huffman, D-San Rafael, called on the FBI and Securities and Exchange Commission on April 1 to investigate Pacific Private Money and its CEO, Tiburon resident Mark Hanf, over allegations of mismanaged funds and potential fraud.

In a letter to SEC Chair Paul Atkins and FBI Director Kash Patel, Huffman wrote that he had heard from “numerous constituents, most of whom are not wealthy individuals, who had invested their life savings or retirement funds with Pacific Private Money” and now face the possibility their money “has been negligently managed, or worse, perpetrated by a fraud.”

Huffman urged the agencies to “thoroughly investigate Pacific Private Money and their leadership, including CEO Mark Hanf, for any fraud that may have been committed,” and to pursue “whatever legal or enforcement actions — civil or criminal — are necessary and most likely to secure and recover remaining assets on behalf of the harmed investors.”

He also called for the immediate appointment of a court-supervised receiver to take control of company assets, halt further losses and conduct “an orderly review and potential recovery of the funds for investors.”

The Marin County District Attorney’s Office confirmed in February that it had opened a consumer fraud investigation into Pacific Private Money.

Deputy District Attorney Sean Ken­singer did not respond to a request for comment from The Ark by press time, but he reportedly told the Marin Independent Journal last week that his office has since coordinated with the FBI’s San Francisco division, which has also opened a separate investigation, and that the FBI has established a victims’ portal where investors can submit information directly to investigators.

On March 16, the state Department of Financial Protection and Innovation suspended Pacific Private’s lending license for 30 days pending investigation. Company representatives told regulators March 9 that the firm had experienced a “severe liquidity crunch” in December, leaving it without funds to continue investor distributions.

Pacific Private stopped payments to its more than 130 investors in October or November and shut down all operations in February. Investors have been told that most of the more than $100 million they invested with the firm is gone.

A notice on the locked door of the company’s Novato office directs account holders to contact restructuring adviser Bill Brinkman of Lafayette-based Jigsaw Advisors LLC. In a January email obtained by the San Francisco Chronicle, Brinkman wrote that net recoveries “will be a fraction of total capital provided by investors.”

Hanf founded Pacific Private in Novato in 2008, in the wake of the Great Recession. The firm offered bridge loans and other short-term financing to real-estate investors and borrowers who could not qualify for traditional loans, advertising returns of 7%-10% on at least one of its funds.

His financial history includes a Chapter 7 bankruptcy filing in 2007, a year before he founded the company. In 2014, the Bureau of Real Estate — now the California Department of Real Estate — suspended Hanf’s broker license and Pacific Private’s corporate license for 90 days each after a 2012 audit found he had commingled investor funds in non-trust bank accounts and loaned approximately $500,000 of client funds to a separate real-estate company of which he was a managing member, without disclosing the self-dealing to regulators, according to state records and contemporaneous reporting.

Under the settlement, 45 days of each suspension were served and the remaining 45 days were converted to a $4,500 penalty each; combined with investigation and audit costs, financial penalties on Hanf and Pacific Private jointly reached $19,617.

Reach Kevin Hessel at 415-435-2652.