updated 9/12/2009 9:51:55 PM ET 2009-09-13T01:51:55

Danny Pang, an Orange County financier accused by federal regulators of defrauding investors out of hundreds of millions of dollars, died Saturday. He was 42.

Pang died at about 5 a.m. at Hoag Hospital in Newport Beach, Supervising Deputy Corner Larry Eslinger said.

Police had been summoned to his house in a gated community at about 3:30 p.m. on Friday on a medical emergency call, and paramedics took him to the hospital, said Newport Beach police Sgt. Doug Jones.

The cause of death was not immediately available, Esslinger said. An autopsy was scheduled for Sunday.

Pang pleaded not guilty in July to federal charges of evading currency reporting laws. The case had been set to go to trial next week, but was delayed until next August.

Ponzi scheme alleged
Pang, a Taiwanese immigrant, is accused of bilking investors in his $4 billion firm by falsely portraying returns as coming from investments in timeshare real estate and life insurance policies of seniors. Prosecutors said he in fact he ran a Ponzi scheme, using money raised from newer investors to pay earlier ones.

Pang's companies, Private Equity Management Group Inc. and Private Equity Management Group LLC, are based in Irvine, Calif.

"Danny was a wonderful husband, loving father, and honest businessman," Pang's family said in a statement released through spokesman Charles Sipkins. "It is distressing that Danny had to endure such a mean-spirited assault on his character without ever having a chance to defend himself. "We remain steadfast in our believe that Danny would have been vindicated if he had been given that opportunity."

The Securities and Exchange Commission froze Pang's assets in April, ordered him to surrender his passports and bring back to the U.S. any assets he had sent overseas. He stepped aside as chairman and chief executive officer.

Pang was arrested days later by the FBI on charges of gradually withdrawing about $360,000 from a company account so he wouldn't have to report the transactions to regulators.

‘Personal piggy bank’
Robert P. Mosier, a court-appointed received in charge of Pang's companies, said in court documents that Pang managed his investments as a "personal piggy bank" to fund a lavish lifestyle, including spending $35 million on a fleet of jets, $1 million on a cruise for employees and $1.5 million on a China vacation for his staff.

In a separate civil lawsuit, the SEC alleged Pang and his companies have been engaged in the fraudulent offering of securities for at least five years, raising hundreds of millions of dollars from investors mostly living in Taiwan. In one case, investors were presented with a forged $108 million insurance policy to support a false claim that an investment was guaranteed, while the actual insurance policy was valued at $31 million, according to the SEC.

Pang first appeared in the news when his wife, 33-year-old former topless dancer Janie Louise Pang, was shot and killed in their home in 1997.

Pang's attorney, Hugh "Randy" McDonald, was charged with the killing but his jury could not reach a verdict and prosecutors did not attempt to try him again.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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