The Wall Street Journal drops an incredible story on its page one today. It’s one of the best stories I’ve read in a long time.

And it’s written by a reporter/editor Audit readers will remember: Mark Maremont, whom I interviewed a couple of months ago.

This has to have been one of the most heavily lawyered stories in years. It’s about an immigrant private-equity guy named Danny Pang, who’s left a long trail of deceit and shadiness, which the Journal and Maremont don’t shy away from detailing.

There are the accusations of a Ponzi scheme, the alleged embezzling of $3 million, the made-up résumé, the life-insurance battle after the hitman-style murder of Pang’s wife, the fraud accusations, the kickback-taking business partners, the prostitutes, the attempted bribes, and the devastating personality critiques that complete the Journal’s portrait of a consummate conman.

Helluva story, no? Yes. Don’t be surprised if Maremont gets a movie or a book deal out of this one.

Here’s one of the scams Pang tried to pull on an insurance company, according to an ex-employee, Nasar Aboubakare:

In early 2007, he says, a PEMGroup affiliate called GVEC Resource IV bought a $31.6 million policy from a unit of HCC Insurance Holdings Inc. to cover investments in time-share properties. But because the policy wasn’t large enough, Mr. Aboubakare says, Mr. Pang directed him and another executive to create a phony document raising the covered amount to $108 million. Mr. Aboubakare says he personally showed this fake policy to investors and sent it to PEMGroup’s Taiwan office.

HCC, shown documents, confirmed that the $31.6 million policy was genuine but said the $108 million policy was not. “It looks to me like a forgery,” an HCC official said.

The Journal’s problem here, one that must have been fretted over internally, is its reliance on dodgy characters as sources. Pang’s firm PEMGroup fired Aboubakare, it says, for sexual misconduct (Aboubakare admits an internal affair) and for taking a $3 million kickback (something Aboubakare also admits, though he says he wasn’t fired for months). The source-credibility problem here is one that’s probably inevitable with a character like Pang. Thugs don’t surround themselves with Boy Scouts, after all.

But as seen in the excerpt above, the paper has documentary evidence, and much of the allegations it is reporting on are from arbitration filings by Aboubakare against SEMGroup (Applaud the Journal for prominently linking to several of them on its website). Still, this stuff is not for the faint of heart.

The color is rich and helps to round out our view of Pang:

On July 12, 2007, Mr. Pang used the jet to take a group of women from PEMGroup’s California offices to Las Vegas for a party. Mr. Aboubakare says that on the return flight the next day, Mr. Pang, having won at a casino, “had a briefcase stuffed with cash and he started throwing money to the girls, stacks of $10,000. I thought it wasn’t right to treat the girls from the office that way, like we were pimps and gamblers.”

That paragraph is followed by an instant-classic PR response:

PEMGroup’s spokesman confirmed the firm took the women to Las Vegas — “as a reward for good work” — and said Mr. Pang “did show them his winnings.”

Yet even after all the nasty stuff that made it into the story, you get the feeling reading this that the Journal knows more or suspects more than it can print, something not uncommon in these types of stories. For instance, the Journal mentions a couple of times that PEMGroup paid investors higher-than-market rates:

Starting with its first fund in 2004, PEMGroup has raised hundreds of millions of dollars through Taiwanese banks. It offers them notes that pay above-market interest, notes the banks can reoffer to individual clients.

Aboubakare alleges that PEMGroup couldn’t cover the high interest and had to raise more money to pay off existing investors—a Ponzi scheme. Sound at all reminiscent of Stanford Financial?

Look at the great stuff Pang invested the proceeds in, too:

PEMGroup also invests in U.S. time-share properties and buys the rights to payouts on life-insurance policies…