>> narrator: in this episode of "american greed"... danny pang is a high-rolling financier with a devil-may-care attitude. >> "i don't give a [bleep]" he didn't care. >> narrator: pang says he makes millions betting on when people will die, but pang has a shady past, a gambling habit, and a murdered wife. >> danny pang hasn't been able to stop crying since his wife, janie, was found shot to death in the couple's upscale home friday night. >> narrator: soon, this gambler's house of cards collapses. >> the whole thing was based on a false underpinning, and it obviously came crashing down.

[ siren wails ] >> narrator: september 11, 2009 -- an ambulance races to the posh newport beach, california, home of financier danny pang. >> he was only 42 and relatively thin. you had to kind of wonder what -- [ chuckles ] ...what was behind this. >> mr. pang was under electronic monitoring, and they saw his bracelet when they took him to the hospital, obviously. >> narrator: pang, who is on house arrest, is under investigation by the feds, accused of defrauding investors out of nearly a billion dollars. the embattled entrepreneur clings to life overnight, and with his silence comes more questions about his alleged dirty dealing. >> he left all these disturbing clues through his whole life where people who were close to him felt they'd been deceived.

>> narrator: danny pang is born in taipei, taiwan, on december 15, 1966. >> his father, he told people, was some kind of a trader. his mother's family owned some kind of furniture manufacturing business, and they were reasonably well-off. he went to a very prestigious middle school and elementary school in taiwan, and a large part of the family moved to the u.s. >> narrator: pang's family settles in las vegas, nevada, in the early '80s, where they own and operate two cheap motels on the edge of the strip. >> one of them was called the rummel, and the family lived in the studio apartment in the rummel, and he lived there with them, and he helped manage the motel, and he went to a high school in las vegas. >> narrator: it's here, in sin city, that pang develops a penchant for gambling, spending his free time at the glitzy

casinos on the strip. >> you know, he liked to gamble, always had a little bit of money that he was throwing around. kind of, you know, a guy who just liked the high life. >> narrator: in 2000, the 33-year-old pang establishes private equity management group, or pem group for short, with a few partners, including nasar aboubakare. jeff benice is aboubakare's attorney. >> the first focus of that business was life settlement contracts, that is buying these insurance policies. >> narrator: the pem group offers people a way to cash out a life-insurance policy before they die. pem offers a cash settlement in exchange for the right to collect on the policy later. >> he would give them the money up front, in return he would hold the policy. so when this person passed, he would get the proceeds of that policy. so that was how he was purportedly going to make money. >> narrator: pang, a gambler since his teenage years, is now literally betting on when people

will die, and from his perspective, the sooner, the better. but it's far from a safe bet. >> mr. pang was not a professional in this business. he really didn't know what he was doing. >> narrator: but pang's partner, nasar aboubakare, has a background in insurance, and together they make an interesting couple. >> nasar was kind of an operations person, also a very conservative, straight guy. danny was the salesperson. he had the relationships in taiwan and other asian countries with the investors, or so he said. >> narrator: pang uses his connections to court taiwanese banks to invest in pem group. >> danny was really good at this. i mean, he dressed in $3,000 suits, and he took the finest suite at the five-star hotels in taipei. he was sort of a guy who would try to convince folks that he had some substance and a track record. >> narrator: pang tells potential investors that he has

that mba from university of california, irvine, and that he was once a vice president at morgan stanley. >> no one ever took the time to make a simple inquiry into his background as to whether he really had that kind of experience, but it never came up as an issue. >> narrator: he also tells investors that pem group is backed by the irvine family, which owned a large part of orange county in the 19th century. >> danny found a member of the irvine family, whose name was morton irvine smith, to essentially serve as a front man for pem group, and they claimed in documents that he was the chairman of the holding company, that the family had a big share holding in pem group. >> narrator: irvine, which has a large taiwanese population, has a certain cachet overseas, and major taiwanese banks like standard chartered plc, hua nan, and sinopac are impressed by

pang's credentials and his connections. they persuade 16,000 individual investors to pour more than $800 million into pem group. >> people would, you know, wire $20 million, $30 million, $50 million, and pem group grew from having $20 million or $40 million of investment capital from a taiwanese bank or a consortium of banks. suddenly it had $500 million or $700 million. >> narrator: and for the next few years, pang spends it like water. >> he did get rich quick -- very quickly. he owned five cars, including very fancy ones, and he lived in this gated community in newport beach. he belonged to this club. he was flying around in jets, living the american dream. >> narrator: but the successful image is propped up with lies. next on "american greed," a reporter digs into pang's troubled past and discovers his a reporter digs into pang's troubled past and discovers his ex-wife has been murdered.

>> narrator: orange county, california. million-dollar mansions and mega-yachts dot the landscape along the pacific ocean. in irvine, financier and gambler danny pang is building his

empire on other people's graves, buying their life-insurance policies, betting when they'll die, then cashing out. to the outside world, it appears that pem group is on the up-and-up. but inside the company, there's a big problem -- life insurance is a bad bet. >> the mathematical calculation they were using was not correct because people are living for a longer period of time, which means the investor who buys that insurance policy isn't realizing anything in terms of a return until a much later date than was expected. >> narrator: one man's longevity is another man's shortfall, and pang needs a cash infusion from some other source. >> he started attracting new investors in order to pay old investors because the investments that his original investors had been placed in were failing. >> narrator: pang's partner, nasar aboubakare, grows increasingly uncomfortable with pang's handling of the business. >> this continuing out-of-control spending on large

and larger items, bigger parties, annual trips to taiwan, taking the whole business overseas to europe for some huge extravaganza. it was spiraling then out of control, from nasar's perspective. >> narrator: tensions between the two reach a breaking point in 2007, and pang pushes aboubakare out of pem group. >> pem group and danny elected to then oust him, essentially cut him off from any income from pem group. that's what created the explosion between them. >> narrator: aboubakare vows revenge. in a wrongful-termination lawsuit, he makes several claims. he says that pang lies about his past. he has no mba. he never went to u.c.-irvine, as he claims, and he never worked for morgan stanley. >> i laughed when i first read the résumé. it was hilarious in the sense that he would make up such a story. he created it, and you tell a lie, and you believe it.

he believed it. >> narrator: aboubakare also charges that pem group's life-settlement contracts are flatlining. >> so rather than telling the investors that things were not going so well, they would essentially take newoney from new investors in order to pay the first group of investors their money back. >> narrator: in other words, danny pang is running a ponzi scheme. >> i don't think he really believed he was stealing anybody's money. what he believed was if there was a shortfall during this first time segment, in the future, it'd be solved. >> narrator: last-ditch attempts to settle fail. >> he wanted to control the show. if he did not control the show, he would not play the game. >> narrator: but aboubakare still has one last card to play. since pang won't take him seriously, he threatens to contact the wall street journal. jeff benice recalls pang's reaction.

"i don't give a [bleep]" he didn't care. danny, at that time, had a huge ego. you know, he felt that he was untouchable. you raise the specter of the wall street journal, he didn't care, and danny's not responding to it. >> narrator: aboubakare makes good on his threat and calls writer mark maremont. >> we got word that this fellow who was running this purported $4 billion hedge fund in orange county did not have his degrees, and it sort of seemed intriguing. >> narrator: maremont digs into pang's past and discovers a shocking chapter. he learns that in may 1993, pang marries 29-year-old janie beuschlein, a stripper who he had met at a club. >> danny pang and janie pang had a very [chuckles] some would call it passionate, others would call it tumultuous. call it what you will, it was a marriage that brought a lot of attention to itself.

>> narrator: the police are summoned to the pang house at least four times over the next four years for domestic-disturbance complaints, and by 1997, divorce is imminent. >> she was going to visit an attorney to get a divorce -- the fact that she had had a private investigator, that she knew he was having an affair, or at least suspected he was having an affair. >> narrator: on may 29, 1997, the p.i. spots danny pang holding hands with another woman. the next day, as janie pang prepares to meet with the investigator, a well-dressed man with a pencil-thin mustache and a briefcase rings the doorbell. he pulls a gun and pushes his way in. chasing janie pang through the house, he finally corners her inside a master-bedroom closet and fires a single round at point-blank range. [ gunshot ] it's the pang's fourth wedding anniversary. when "american greed" returns...

murder is just one of many suspicious things that mark maremont uncovers about suspicious things that mark maremont uncovers about pang's past.

>> if there's anybody who knows anything about this, please contact the police. >> narrator: days after janie pang's murder, police release a sketch of the suspect,

who they say bears a striking resemblance to hugh mcdonald, danny pang's former attorney. >> an arrest warrant has been issued for an orange county attorney, hugh randy mcdonald. at the time of the homicide, he handled all the business affairs for the victim's husband. >> narrator: mcdonald remains on the lam for four years until 2001, when police finally track him down. michael molfetta is mcdonald's attorney. >> my client has maintained his innocence from the get-go. he has always told me, "i did not do this. i had no reason to do it," which is true -- he really didn't. >> narrator: at trial, molfetta argues that danny pang was responsible for janie pang's murder, that he was an abusive husband, and that he hired a hit man to kill his wife. >> the question of whether or not i think danny pang is guilty of the murder of janie pang, i think he's complicit in it. i think, at a minimum, he knows way more than he let on.

>> narrator: danny pang takes the fifth and doesn't testify, and on october 4, 2002, the jury returns a 10 to 2 "not guilty" verdict, and the case against mcdonald is dismissed. to this day, who killed janie pang is an unsolved mystery. murder is just one of many suspicious things that mark maremont uncovers about pang's past. when maremont examines pem group's investments, he discovers that pang is luring investors under false pretenses. turns out, pem group isn't backed by the wealthy and influential irvine family. pang has fabricated his entire past, and he's using the pem group as his personal piggy bank, taking out over $100 million in salary, fees, and bonuses. >> there was all kinds of loans, unauthorized loans or

undocumented loans, going from the company's funds, to danny personally, to companies that he controlled. every time they'd place an investment, danny would pay himself and other partners at pem group a pretty substantial fee. >> narrator: with those fees, pem group buys not one, but three private jets. pang uses one of them to take his employees to las vegas on a high-stakes gambling trip. maremont knows he can't sit on this story for long. >> eventually, these little pieces started coming into place, and it just seemed really intriguing. i mean, "who is this guy? how'd he raise this money? what was he doing with the investments? what did he tell the investors? was all this stuff that he looked like he fabricated, did he really fabricate it, and why?" >> narrator: when the wall street journal publishes the first of a series of articles about pang in april 2009, alarm bells sound at the s.e.c., and the heat comes down. >> there was no way there was

gonna to be a front-page article about an irvine company involved in a massive ponzi scheme where the s.e.c. is not gonna get in their car, come down here, and shut them down. >> narrator: when "american greed" returns... with pang's web of lies exposed, will he crack under the with pang's web of lies exposed, will he crack under the pressure?

>> narrator: in april 2009, the wall street journal blows the whistle on irvine, california-based financier danny pang. mark maremont's searing page-one article recounts pang's shadowy past -- his wife's murder, his

false credentials, and his alleged $800 million ponzi scheme. >> he was just a really, you know, interesting, colorful guy who obviously had lots of intelligence and maybe brilliance in financial matters, but he left all these disturbing clues through his whole life where people who were close to him felt they'd been deceived. >> narrator: 24 hours later, the s.e.c. launches its investigation into pang. s.e.c. attorneys paris wynn and david van havermaat allege that by falsifying his résumé, pang violated the investment advisors act. >> you're telling investors that, "look, based upon my background and my expertise, you should hire me." we would consider that a material fact. you're telling people one thing that's important in their decision-making process, when in fact there's no truth to your representation. >> narrator: they also look into the ponzi scheme that pang is accused of running, and they

file a civil suit against him. at the same time, the fbi begins its own criminal investigation into pang. they allege that he is illegally diverting more than $360,000 of investor funds for his own personal use. pang steals the money in amounts just under $10,000 to avoid federal scrutiny. it's a crime the feds call "structuring." >> it was the most egregious structuring case that i've certainly seen. when we normally see structuring, we see it to the tune of, you know, five, six, seven, eight transactions, and here you had more than 50 transactions to the tune of close to half a million dollars. >> narrator: within a week, the fbi arrests pang for the structuring offenses and he's placed on house arrest. the feds buy themselves time to look into the allegations that pang defrauded taiwanese investors out of at least $800 million. >> it's not a situation where you have unsophisticated investors that are being taken

in by mr. pang. these were all big taiwanese banks that got taken in by him and were convinced to invest their money with him in what turned out to be a fraud. >> narrator: but no one could imagine what pang would do next -- an act so shocking, it would stop the investigation in its tracks. september 11, 2009, just five months into the investigation, pang's mother finds him in bed. he's unresponsive. a family friend calls 911, and he's rushed to the hospital, where he's pronounced dead the next day. pang, the man who once believed he was invincible, has taken a cocktail of prescription drugs. more than five times the lethal dose is found in his system. >> it was strange. that was way out of character for him. >> he was not a guy who, you know, would give up easily, typically, so a lot of people just don't believe that he, you

know, could have or would have committed suicide. >> narrator: for such a mysterious man, pang's suicide poses the ultimate question, leaving everyone scratching their heads. this fbi agent is working undercover and asked that we protect his identity. >> that was obviously a big shock to me. i was preparing a case, and we had a trial date set. once he's no longer living, there really isn't a case against danny pang. >> narrator: a month later, pang's family releases a statement. but the s.e.c. continues with its civil suit and will sue pang's estate in an effort to get restitution.

in all, pang allegedly defrauded 8 banks and 35 individuals who had invested $823 million with pem group. only a small fraction of that amount has been recovered. >> these were very sophisticated financial institutions that were victimized by mr. pang, and if they can become victims of a fraud like this, it just goes to show that everybody needs to be careful with their investments. >> narrator: still, questions about pang's life and death remain. but for a man who gambled on other people's fate, controlling his own destiny was his safest bet. >> he's just this iconic type of figure in america of the immigrant who looks like he's making good, but in fact, you know, the whole thing was based on a false underpinning, and it know, the whole thing was based on a false underpinning, and it obviously came crashing down.

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