Democratic Fund raiser Norman Hsu Indicted on Federal Fraud Charges
Norman Hsu Accused Of Cheating Investors, Making Illegal Donations to
Clinton, Others Tuesday, December 04, 2007
Associated Press
(AP) A federal grand jury on Tuesday indicted Norman Hsu, a top Democratic
fundraiser and former fugitive accused of cheating investors of at least $20
million and using some of the money to make illegal donations to political
candidates including Hillary Rodham Clinton
In the 15-count indictment returned in U.S. District Court in Manhattan, the
government accused the 56-year-old clothing-industry entrepreneur of duping
investors nationwide with a massive Ponzi scheme.
The government said Hsu also violated federal campaign finance laws by making
contributions to various political candidates in the names of others. A message
left with a lawyer for Hsu was not immediately returned.
Federal prosecutors said Hsu hoped his lavish campaign contributions would
help draw money to his scheme by raising his public profile. To achieve his
aims, prosecutors said, Hsu pressured many of his victims to contribute
thousands of dollars to various candidates for president and Congress
Hsu was once a valued supporter of Clinton, raising more than $1.2 million
for her and other Democratic candidates in recent years. He turned into a
scandal when it was revealed he had been hiding from the law in plain sight.
He had been wanted in California since 1992, when he fled after pleading no
contest to grand theft charges in a fraudulent clothing import business. He
posted $2 million bail in August, and his lawyer said his fugitive status was
just a misunderstanding. But Hsu missed a court date Sept. 5, fled by train and
was arrested at a Colorado hospital after attempting suicide.
Hsu's work on Clinton's behalf has been an embarrassment for her presidential
campaign, which has returned more than $800,000 to donors whose contributions
were linked to him.
The indictment said Hsu from 2000 through August 2007 convinced his victims
to invest at least $60 million in companies that supposedly extended short-term
financing to businesses.
It said Hsu used the money instead to further his fraudulent aims, sometimes
paying the large interest gains he had promised to those who had invested
earliest in the scheme. Prosecutors said he eventually cheated the investors
out of at least $20 million.
The government said he broke election laws by reimbursing donors to federal
candidates in 2005, 2006 and 2007. The indictment said Hsu asked individuals to
make contributions totaling more than $25,000 to designated federal candidates
and then reimbursed them from his fraud proceeds. Federal election law requires
that donors give their own money, for which they cannot be repaid; in addition,
an individual can only give up to $25,000 in total contributions to federal
candidates in a calendar year.
U.S. Attorney Michael Garcia has said there was no evidence that the
campaigns were aware of the scheme or acted criminally. He said the Clinton
campaign was cooperating with the investigation.
Hsu faces six counts of mail fraud, six counts of wire fraud and three counts
of violating the Federal Election Campaign Act.
If convicted, he faces a maximum penalty of 20 years in prison on each of the
mail and wire fraud charges, and five years on each of the federal campaign
finance charges. He also could face millions of dollars in fines.
Hsu is in custody in California on unrelated charges and was expected to
appear in federal court in Manhattan in several weeks, prosecutors said.
FOR MORE ON HILLARY CLINTON'S CRIMINAL FUND RAISERS like Sant Singh Chatwal,
fugitive Dr Sabharwal, Vinod Gupta, Marc Rich
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