A federal grand jury has indicted Democratic fund-raiser Norman Hsu in a massive 15-count fraud scheme

NEW YORK (CNN) — A federal grand jury has indicted Democratic fund-raiser Norman Hsu in a massive 15-count fraud scheme, including 12 counts of mail and wire fraud and violating various campaign finance laws, according U.S. Attorney Michael Garcia.

According to the indictment, unsealed Tuesday, Hsu, 56, persuaded his victims to invest at least $60 million in his fund-raising scheme from 2000 to August of this year. Hsu swindled at least $20 million from his investors, according to the unsealed documents.

Hsu had been a top contributor to Democrats, including presidential candidates Hillary Clinton and Barack Obama. But their campaigns and others said they have returned Hsu's donations or given them to charity.

Hsu made various donations of over $25,000 and in the names of others to candidates for the U.S. Senate, the U.S. House of Representatives and president, according to the indictment.

Read the rest of this entry »

Hsu appeared in court with his lawyer on Wednesday.

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.

Read the rest of this entry »

Clinton told CNN Thursday she doesn't think the Hsu matter will negatively affect her campaign.

NEW YORK (CNN) – Federal prosecutors have charged Democratic fund-raiser Norman Hsu with breaking campaign finance laws and creating a $60 million Ponzi scheme.

Federal prosecutors announced the criminal complaint 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.

Clinton told CNN's Jessica Yellin Thursday she is not worried Hsu's charge will have a negative affect on her campaign.

"Unfortunately none of us caught the problem that were there," she said. "This happened to a lot of campaigns, a lot of investors who made investments that unfortunately don't look like they were treated appropriately. The system of justice will work its course, and I think that's appropriate."

GRAND JUNCTION , Colo. (AP) – A Colorado judge has set bail at $5 million in cash for Democratic fundraiser Norman Hsu on a charge of grand theft.

Hsu, wanted in California on a 1991 grand theft case, appeared by video hookup at a hearing Thursday, one week after skipping a court date in Redwood City, Calif., and showing up in Grand Junction on an Amtrak train so sick he had to be hospitalized.

Authorities haven't disclosed the nature of his illness, but he was released from the hospital on Wednesday and booked into the Mesa County jail.

His next court date is Sept. 19. His attorneys said Thursday that he won't fight extradition to California.

District Attorney Pete Hautzinger had asked Judge Bruce Raaum for an unprecedented $50 million bail, noting that Hsu had skipped out on the hearing in California despite posting a $2 million bond.

Read the rest of this entry »

Hsu left a note saying he intended to commit suicide, according to the Wall Street Journal.

WASHINGTON (CNN) – Two days after The Wall Street Journal reported fugitive Democratic fundraiser Norman Hsu was found sprawled on the floor of a train cabin surrounded by pills, the newspaper reports Hsu drafted a suicide note before he went briefly missing.

The Journal reported in Thursday's edition that Hsu, who was convicted for investment fraud in the 1990's and failed to appear in court last Wednesday, sent copies of his suicide note to "several acquaintances and charitable organizations" before he boarded an Amtrak train bound for Chicago.

According to a recipient of the note who spoke with the Journal, Hsu "very explicitly said he intended to commit suicide," and also apologized if he put people "through inconvenience or trouble."

Hsu has raised campaign cash for several Democrats, but most significantly for Sen. Hillary Clinton, D-New York. On Monday, the New York Democrat's presidential campaign said it would return $850,000 raised by Hsu to individual donors. The Democratic National Committee also told CNN it is now re-vetting $47,000 worth of contributions raised by Hsu between 2004-2007 verifying them with the donors directly.

In a conference call with reporters Tuesday, Clinton said she would not actively ask the donors to make a new contribution to her campaign.

"We're not asking that that be done," she said, according to the Associated Press. "But I believe that the vast majority of those 200-plus donors are perfectly capable of making up their own minds about what they will or won't do going forward."

Earlier in the week, the Journal reported the peculiar condition in which Hsu was found on the train

Another passenger, Joanne Segale, told the newspaper she noticed several items spill out of his sleeping cabin, and when she peeked through the window and "saw a man who appeared to be in fetal position, bare-chested."

A crowbar was needed to open the Hsu’s cabin where he was found on the ground and unable to walk, the Journal reported.

Segale also told the newspaper she noticed "lots and lots of medication in that room. I could see pills on the floor and rolling around."

Hsu was taken to a Colorado hospital and then taken into custody by the FBI.

Hsu's attorney would not comment on his client's condition but he issued a statement last week describing Hsu as being under enormous and unbearable strain.

Related: Dems rush to dump donations from fugitive fundraiser

– CNN Ticker Producer Alexander Mooney

The Clinton campaign said Monday that it will return money solicited by Norman Hsu from more than 250 donors.

WASHINGTON (CNN) – A day after Sen. Hillary Clinton's presidential campaign announced it was returning $850,000 raised by fugitive fundraiser Norman Hsu, new details have emerged about his capture last week, according to reports from The Wall Street Journal.

The disgraced Democratic fundraiser, who is under investigation for investment fraud in the 1990's, failed to appear in court last Wednesday. He was later found on an Amtrak train headed for Chicago.

The Wall Street Journal reported on its Web site Monday night and in the newspaper’s print edition Tuesday, that it was not a pleasant trip for Hsu.

Another passenger, Joanne Segale, tells the newspaper she noticed several items spill out of his sleeping cabin, and when she peeked through the window and "saw a man who appeared to be in fetal position, bare-chested."

"It appeared this person had fallen out of bed," she told Journal.

A crowbar was needed to open the Hsu’s cabin where he was found on the ground and unable to walk, the Journal reported.

Segale also told the newspaper she noticed "lots and lots of medication in that room. I could see pills on the floor and rolling around."

Hsu was taken to a Colorado hospital and then taken into custody by the FBI.

Hsu has also given to other Democratic candidates, including Clinton's chief rival for the Democratic nomination, Sen. Barack Obama.

UPDATE: Democratic National Committee spokeswoman Karen Finney tells CNN's Shirley Zilberstein the DNC is now re-vetting those contributions that were raised for the committee by Hsu between 2004-2007 and verifying them with the donors directly. Hsu raised approximately $47,000 for the committee in that time.

Related: Dems rush to dump donations from fugitive fundraiser

– CNN Ticker Producer Alexander Mooney