Aretired partner of a big Five accounting firm was one of the biggest losers. Worse than being swindled out of $2 million, he says, is that he persuaded many friends to invest another $25 million in PinnFund USA which, according to a Securities & Exchange Commission complaint, was actually a Ponzi scheme sucking up $330 million. "I stood on Highway 680, next to my car," recalls this investor. "I was thinking about walking across in front of a big truck." Some of the more than 160 investors would like to make roadkill of Michael Fanghella, who ran the fund, and James Hillman, who raised the money. They put on a good show, claiming to invest proceeds in preapproved subprime mortgages that could be quickly flipped to a bank and produce 17% annual returns for investors. Corporate executives and partners of top law and accounting firms anted up. What they didn't know, says the SEC, was that the fund was losing money and covering those losses, as well as paying out 17% dividends, with new investor money―and that Fanghella diverted more than $100 million for his personal use, while Hillman was receiving undisclosed monthly commissions of up to $1 million.
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