California Congressman Demands FBI Probe of Lending Firm That Lost Investors' Life Savings

A California congressman is demanding federal investigators probe a Marin County lending company that appears to have lost more than $100 million in investor funds — much of it retirement savings from working-class Americans.

Rep. Jared Huffman, D-San Rafael, sent a letter April 1 to FBI Director Kash Patel and Securities and Exchange Commission Chair Paul Atkins urging them to investigate Pacific Private Money and its CEO, Tiburon resident Mark Hanf, for potential fraud and mismanagement. Huffman called for immediate appointment of a court-supervised receiver to secure remaining assets and pursue recovery for harmed investors.

"I have heard from numerous constituents, most of whom are not wealthy individuals, who had invested their life savings or retirement funds with Pacific Private Money," Huffman wrote. He said investors now face the possibility their money "has been negligently managed, or worse, perpetrated by a fraud."

The company stopped making payments to its more than 130 investors in October or November and shut down all operations in February. A restructuring adviser hired by the firm told investors in January that net recoveries "will be a fraction of total capital provided by investors," according to an email obtained by the San Francisco Chronicle.

Pacific Private Money, founded in Novato in 2008, offered bridge loans and short-term financing to real-estate investors who could not qualify for traditional loans. The firm advertised returns of 7% to 10% on at least one of its funds.

The company's collapse has triggered multiple investigations. The Marin County District Attorney's Office confirmed in February it had opened a consumer fraud investigation. Deputy District Attorney Sean Kensinger told the Marin Independent Journal his office has coordinated with the FBI's San Francisco division, which has opened a separate investigation and established a victims' portal for investors to submit information.

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

The firm's locked Novato office now displays a notice directing account holders to contact restructuring adviser Bill Brinkman of Lafayette-based Jigsaw Advisors LLC.

A History of Financial Troubles

Mark Hanf's financial history raises serious questions about how he was able to operate an investment firm handling nine figures in client funds.

Hanf filed for Chapter 7 bankruptcy in 2007 — just one year before founding Pacific Private Money in the wake of the Great Recession.

In 2014, the Bureau of Real Estate (now the California Department of Real Estate) suspended both Hanf's broker license and Pacific Private's corporate license for 90 days after a 2012 audit uncovered serious violations. Investigators found Hanf had commingled investor funds in non-trust bank accounts and loaned approximately $500,000 of client funds to a separate real-estate company he managed — without disclosing the self-dealing to regulators.

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 reached $19,617.

That a lending company CEO with a recent bankruptcy and a documented history of commingling client funds and self-dealing was permitted to continue operating — and to attract more than $100 million in new investments — represents a regulatory failure that demands answers.

Investors Left in Limbo

The victims are not wealthy speculators. According to Huffman, most are ordinary people who entrusted their retirement savings to what they believed was a legitimate investment vehicle offering modest but reliable returns.

Now they face the prospect of losing everything while waiting to learn whether federal investigators will pursue criminal charges or civil enforcement actions that might recover some portion of their funds.

Huffman's letter urges the FBI and SEC 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."

Whether Kash Patel's FBI — an agency now led by a Trump loyalist with no law enforcement experience — will prioritize investigating financial fraud against working-class investors remains to be seen. The same question applies to the SEC under Trump appointee Paul Atkins, a longtime advocate for reducing financial regulation.

For the more than 130 investors who trusted Pacific Private Money with their life savings, the wait for answers continues.