The FBI has arrested Orange County financier Danny Pang on money-laundering charges, as his firm, PEMGroup, faces an SEC investigation. It's a classic law-enforcement move, like when Eliot Ness caught Al Capone on tax evasion.

Over the last two years, an FBI affidavit claims, Pang and his assistants made 38 separate cash withdrawals below the $10,000 limit which triggers a report to the authorities; the rule is meant to track money-laundering activity. Evading the reporting requirement by making multiple transactions below the limit carries a penalty of up to 10 years in prison.

But that's a small crime compared to the one SEC officials are alleging: that Pang lied to investors about his background, falsely claiming he had an MBA degree and worked at Morgan Stanley, and that he ran part of PEMGroup's $4 billion money-management business as a Ponzi scheme.

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