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.
He persuaded his investors to contribute tens of thousand of dollars to various campaigns in order to build his public profile and lure more investors to his scheme, prosecutors said. Investors were made to fear that if they failed to contribute they would jeopardize their relationship with Hsu's companies and risk losing their money.
However, Hsu's companies, Components Ltd. and Next Components Ltd., never conducted any legitimate business and were nothing more than an instrument to conduct his scheme, according to the indictment documents. 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 documents say. When the scheme fell apart the investors were left holding millions
of dollars in bad checks.
Hsu could receive a maximum sentence of 20 years in prison for each count of mail and wire fraud, and a maximum of five years for each Federal Campaign Finance violation. In addition to the prison time, Hsu also faces a maximum fine of twice the losses resulting from his fraud crimes, along with a maximum of $250,000 for the campaign finance crimes.
In addition to financial penalties, Hsu would have to forfeit various bottles of wine and champagne from his New York City apartment, along with a saxophone autographed by former President Clinton.
In September, Hsu was en route from California to Denver when he became ill on an Amtrak train and was taken to a hospital. Later that day FBI agents arrested him on charges of unlawful flight to avoid prosecution. He is now in custody in California on unrelated state charges.
U.S. Attorney Garcia expects him to be extradited to New York in coming weeks.
- CNN's Laura Batchelor