PEMGroup founder Pang arrested

Danny Pang, founder and ex-chief executive officer of Private Equity Management Group Inc, was arrested on federal charges that he evaded transaction-reporting laws by cashing checks for amounts of less than $10,000.

Pang, 42, either personally or through his personal assistant, cashed 38 checks, sometimes two a day, in amounts of $9,500 to $9,900 to avoid filing a currency-transaction report, US Attorney Thomas O'Brien said on Tuesday in a statement. Pang faces as long as 10 years in prison if convicted of "structuring" cash transactions, according to the statement.

The Securities and Exchange Commission filed a lawsuit on Friday against Pang and PEMGroup, accusing him of bilking investors by falsely portraying returns as coming from investments in timeshare real estate and seniors' life insurance policies. Regulators say the money in fact came from a Ponzi scheme in which he used funds raised from newer investors to pay earlier ones.