Marin County lender faces new lawsuits as more regulators investigate

A Marin County real estate finance organization under increasing scrutiny from local, state and federal officials on how it handled funds is facing several new lawsuits from investors and borrowers.

In addition to a civil case from last year pending in Alameda County, four legal complaints have been filed in Marin County Superior Court in the past three months against entities and principals connected to Novato-based Pacific Private Money, court records show. These actions come after more than 100 investors lost access to their fund accounts in December and were informed by a restructuring company of financial problems. A state financial regulator last month suspended loan broker licenses for 30 days, ending April 15, while it looked into reports it had received.

And on Wednesday, Rep. Jared Huffman, D-San Rafael, sent a letter to the FBI and U.S. Securities and Exchange Commission calling for an investigation. The Marin County District Attorney's Office told the Marin Independent Journal on Thursday that "it has coordinated with the San Francisco Division of the Federal Bureau of Investigation who has also opened an investigation into the activities of PPM, its entities and funds."

The first Marin lawsuit this year was came in late January from Santa Cruz Imports Inc., naming Pacific Private Money founder and CEO Mark Hanf as well as several related entities. This investment venture led by David Hirsch, founder of Hirsch Vineyards in western Sonoma County, first invested in a membership position in Pacific Freedom Fund LLC in 2021 and started receiving distributions, according to the filing. But starting in November of last year, "it became evident PFF was suffering dire financial problems" as distributions stopped and would "remain paused."

Hirsch's investment company sent a written request on Christmas Eve to withdraw the entire equity balance of just under $1 million, the complaint said. That was the same day Pacific Private Money is said to have sent an email to investors saying it was "experiencing valuation and other challenges that are impacting the ability to operate under normal conditions."

A formal request was sent on Jan. 6 for financial records on the investments, the complaint said. Three days later, Santa Cruz Imports received an email from Bill Brinkman of Lafayette-based Jigsaw Advisors that he had been named chief restructuring officer for Pacific Private Money: "This situation is extremely distressed and PPM's future is uncertain."

Hirsch and his attorney, Jonathan Bowne of Sebastopol, couldn't be reached for comment.

The second Marin lawsuit came in late February from Marin residents Daniel and Kelly Descalso, represented by David Outwater and Randi Pinckes of Irvine. The couple claim they had invested over $1 million, starting with $400,000 in 2023. The pitch, they allege, was monthly dividends amounting to returns of 8%, followed by an offer in 2024 of returns as high as 10%.

The couple claim they tried to get $1 million out in January 2025 to pursue another investment and purportedly were told "redemptions are taking longer at the moment," the court filing said. They said they needed the money by early that March to avoid losing a half-million-dollar real estate deposit, but only received $200,000 by late May of last year. They claim they heard in October they might get $600,000 more by year-end but by early December supposedly hadn't received the first $50,000 of that.

In addition to Hanf, they name Nam Phan, chief operating officer until he resigned in late January, as well as investor contacts Edward Brown and Sam Thatcher.

On Dec. 3, Thatcher sent the Descalsoes an email saying, "At this time, the company has made the difficult decision to pause all redemptions until further notice. We are actively managing through a liquidity constraint," according to the complaint.

The third Marin case was filed March 2 by Berkeley residents Mikhail and Tatyana Brodsky, represented by Alexander Golovets of Richmond. The couple opted in October 2022 to loan Pacific Private Money $520,000 at 9% interest rather than invest, the complaint said. That December, Hanf allegedly terminated the financing document without authorization from the Brodskys and in April 2023 told them there was a "technical issue with the paperwork," issuing a restated promissory note and personal guaranty.

The couple claim the loan funds were used for purposes other than purchasing real estate that would secure the loan. The loan allegedly wasn't repaid at maturity on New Year's Day 2024.

The fourth Marin case was filed March 20 by Karen Green, represented by Benjamin Graves of Corte Madera. Green had borrowed $340,000 to buy a home in Sonoma and used a home in Santa Rosa also as collateral, the complaint said. The claim is that proceeds from the sale of one of the properties was supposed to go to pay off the loan from Pacific Private Money Fund I LLC, but that organization didn't record a reconveyance to remove its deed of trust, causing a problem for future sale of the Santa Rosa home.

Graves declined to comment.

Jeff Quackenbush joined North Bay Business Journal in May 1999. He covers primarily wine, construction and real estate. Reach him at [email protected] or 707-521-4256.