September 21, 2007
Posted: September 21st, 2007 09:06 AM ET
NEW YORK (CNN) - Federal prosecutors have charged Democratic fund-raiser Norman Hsu with breaking campaign finance laws and cheating investors out of millions of dollars in a $60 million Ponzi scheme. The criminal complaint was announced Thursday at a press conference in Manhattan. Hsu has raised money for several Democratic candidates, but most substantially for Sen. Hillary Clinton's, D-New York, presidential bid. Clinton's campaign has said it will return the $850,000 Hsu raised to the individual contributors. Hsu is charged with one count of violating the Federal Election Campaign Act after using investors in his companies as straw donors, making various political contributions greater than $25,000, which Hsu then paid back to the straw donors. Other charges include one count each of wire fraud and mail fraud. "In committing acts of campaign finance fraud" said U.S. Attorney Michael Garcia, "Hsu corrupted a system in which transparency is paramount in order to purchase a place on the celebrity campaign circuit." Hsu contributed to political campaigns to raise his profile and draw more investors to his Ponzi scheme, prosecutors allege. "It doesn't appear the Ponzi scheme was devised in order to generate money for the political contributions," Garcia said. Hsu persuaded his investors to contribute tens of thousands of dollars to various campaigns in order to build his public profile and lure more investors to his scheme, prosecutors say. Investors were made to fear that if they failed to contribute they would jeopardize their relationship with the company and risk losing their money.
However, the companies, Components Ltd. and Next Components Ltd., never conducted any legitimate business and were nothing more than an instrument to conduct the Ponzi scheme, prosecutors say. Hsu, whose phony companies guaranteed high return rates on short term investments, was actually paying older investors with money coming in from new investors, the allege. When the scheme fell apart investors were left holding millions of dollars worth of bad checks. Hsu is being held in Denver on charges of fleeing San Mateo, Calif., to avoid prosecution. When he was arrested, authorities seized a laptop, a blackberry, and a suitcase filled with thousands of dollars. Also seized were checks from Hsu's victims as well as bank receipts for millions of dollars in transactions made by Hsu and a lists of specific campaign contributions made by investors on Hsu's behalf. He would face 45 years in prison, as well substantial fines, if convicted on all charges. – CNN's David Miller Filed under: Hillary Clinton Norman Hsu
|
The latest political news from CNN's Best Political Team, with campaign coverage, 24-7. Sign up for our twice daily Ticker emails. Got a news tip or feedback? For complete political coverage, bookmark CNNPolitics.com. CNN=Politics Screensaver
New in the Ticker
@edhenrycnn: Joe Klein of Time mag joining me on "44" at cnn.com 18772664189 right now
Updated: Fri, 04 Dec 2009 08:05:09 -0800 @psteinhauserCNN: Two very different takes on the November jobs report - http://bit.ly/6SDZHO
Updated: Fri, 04 Dec 2009 07:18:30 -0800 @PrestonCNN: @TheJayJMan I need to head to the Bahamas and find an island without Internet access.
Updated: Fri, 04 Dec 2009 06:45:34 -0800 @PrestonCNN: @TheJayJMan I grew up in Mass. I moved south to minimize my long winters. I should have kept driving!
Updated: Fri, 04 Dec 2009 06:34:56 -0800 @PrestonCNN: "Poll shows Democratic leader in trouble" - http://bit.ly/7DJblA
Updated: Fri, 04 Dec 2009 06:32:19 -0800 Categories
Archive
Popular Posts
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loading weather data ...