Financier Danny Pang, who was accused by U.S. securities regulators of perpetrating a massive Ponzi scheme on mainly Taiwanese investors, has died, a family spokesman said on Saturday.

Pang, 42, was taken to a California hospital near his home on Friday and later died, spokesman Charles Sipkins said. The cause of death was related to a heart ailment, he said.

Pang was the founder and ex-chief executive of Private Equity Management Group Inc and Private Equity Management LLC, or the PEMGroup.

At the time of his death, federal civil and criminal charges were pending against Pang. He was also the subject of an ongoing federal investigation into the alleged Ponzi scheme.

In July, Pang pleaded not guilty in a Southern California federal court to two criminal counts of structuring cash transactions to avoid reporting them to the government. His trial date was recently pushed back until August 2010.

Our entire family is shocked and saddened by Danny's sudden and tragic passing, the spokesman said in a statement.

The family said Pang had been subjected to five months' worth of relentless attack of innuendo and false allegations, and was denied any opportunity to defend himself.

A representative from the U.S. Attorney's Office in Los Angeles could not be reached for comment.

Prosecutors say Pang used PEMGroup employees and family members to cash 38 checks in amounts just under $10,000 to avoid filing currency transaction reports, according to court documents.

If he had been convicted of the two charges, Pang could have faced up to ten years in prison.

The U.S. Securities and Exchange Commission also has a pending case against Pang in federal court in Los Angeles, accusing him of running a Ponzi scheme that defrauded Asia-based investors, mainly Taiwanese, of hundreds of millions of dollars.

Pang denied those allegations, saying the government has based its case on the word of a disgruntled employee.

(Additional reporting by Lisa Baertlein)

California