Legal News

Danny Pang Case Takes a Turn Toward the . . . Salacious

By Ashby Jones

It’s funny: Had the Danny Pang story broken in 2005 (or, for that matter, 1995), we’re guessing it would have garnered repeated front-page attention. But the story — of an alleged fraud concerning hundreds of millions — has largely taken a back seat to those involving a string of A-Listers by the names of Madoff, Dreier and Stanford. The room is just too crowded.

But the Pang saga could be pushing its way to center stage, largely because a bit of salaciousness has found its way into the case. A legal battle has erupted in the U.S. government’s case against the financier, over whether a young Taiwanese woman was Pang’s girlfriend. Click here for the story, from the Journal’s Mark Maremont.

The quick backstory: Pang, 42 years old, has been accused by the SEC of masterminding an international securities fraud that fleeced investors, mostly in Taiwan, of hundreds of millions of dollars. (In April, Pang was arrested on charges of structuring cash transactions to keep them under the $10,000 figure that triggers a report to the federal government.) Click here, also, for a fun look at the Pang saga, from NY Magazine.

Pang has denied wrongdoing, though a federal judge found the SEC’s allegations had enough merit to justify the appointment of a permanent receiver, Robert Mosier, to run Mr. Pang’s former company, Private Equity Management Group Inc., or PEMGroup, of Irvine, Calif.

So where does this alleged relationship enter the picture? Mosier, the receiver, is attempting to wrest control of an entity in the British Virgin Islands that the receiver claims is an affiliate of PEMGroup. Pang and his attorneys argue the entity is independent of PEMGroup, claiming among other things that it is controlled by the Taiwanese woman, Su-Wei Yang.

So, in an attempt to prove that the companies are not run at arm’s-length from one another, the receiver filed a number of emails and photos sent from the Yang to Pang, who is married. Among the photos is one showing the woman resting her head on Pang’s shoulder.

In response to the allegations, One of Pang’s lawyers responded in a June 23 letter, filed in court, calling that an “inflammatory” and unsupported “piece of office gossip” that was defamatory. The lawyer wrote that Pang “reserves all his rights” — in other words, threatening a possible lawsuit — if the receiver didn’t withdraw the charge. (Pang is repped by David Schindler and others at Latham & Watkins.)

Yang, 30 years old, used to own a floral shop with her sister in downtown Taipei and formerly worked in a travel agency, according to a Web site for the floral shop. In last week’s filing, the receiver reiterated the claim that the pair had a romantic relationship and this time included copies of several emails in Chinese, sent from Yang to Pang from 2005 to 2008. One message, sent last December to celebrate Mr. Pang’s birthday, contained a subject line that translates as “Love you very much.” That email included 14 attached photos that weren’t filed in court. Other emails referred to Mr. Pang as “big brother,” a Chinese term of respect and endearment.

Full post as published by Law Blog - WSJ.com on August 12, 2009 (boomark / email).