Move over, Marc Dreier, Bernie Madoff and Sir Allen. There's a new financial villain on the scene, and this one makes ordinary (alleged) fraudsters look like Miss Manners at a tea party. What's more, his web has ensnared a Fulbright & Jaworski partner, who supposedly offered a $500,000 inducement to get a Wall Street Journal source to stop cooperating with reporters.
Happily, the Journal plowed on with its reporting on Danny Pang, which resulted in a doozy of a story in Wednesday's paper. Not only is Pang, the CEO of Private Equity Management Group Inc., accused of defrauding investors and running a Ponzi scheme, he was also at one point a suspect in the unsolved murder of his ex-stripper wife. Pang, whom the Journal also suggests may have ties to Taiwanese organized crime, has denied the allegations.
The central source in the Wall Street Journal story is the former president of Pang's firm, who was fired in 2007 for allegedly taking $3 million in kickbacks and engaging in sexual misconduct. The ex-president, Nasar Aboubakare, responded by filing an arbitration claim that accuses Pang of defrauding investors and misusing company funds. The company has since settled with Aboubakare for an undisclosed sum.
But not before Fulbright & Jaworski partner Charles Schmerler sent Aboubakare a letter we found extremely interesting. Schmerler, who represents PEMGroup, proposed that the company would fork over $500,000 as part of the arbitration settlement if Aboubakare could convince the Journal to kill its story.
Aboubakare's arbitration counterclaim also caught our eye, especially the part where he accuses Pang of double-billing his clients for $1 million in legal fees for -- you guessed it -- Fullbright & Jaworski.
We should point out that there's no indication, even if the allegations are true, that Fullbright knew Pang was using the law firm as a vehicle of fraud. Naturally, we called Schmerler for comment on Aboubakare's claims, but he didn't call us back.
Aboubakare may have credibility problems, but the Journal uncovered details about Pang that give his story some weight, including evidence that Pang lied about his past and accusations from a former boss that Pang was a compulsive liar who stole $3 million from his company. A companion article describes Pang's violent marriage to his murdered wife and the suspicions that her killing inspired.
This article first appeared on The Am Law Litigation Daily blog on AmericanLawyer.com.