December 4th, 2007
03:57 PM ET
15 years ago

Democratic fund-raiser Hsu indicted on 15 counts

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

soundoff (26 Responses)
  1. Surrealist, Fort Myers, FL

    I'm embarassed for my party! This guy deserves everything they give him. And any other DNC leadership or candidates who were aware of his actions–should go down as well. My trust is not broken–but dented a little. This kind of scheming back door stuff is why I'm no longer a Republican. Any party that Cheney and Bush are in–I'm not in. If further revelations reflect the same images on the DNC or Presidential candidates–I'll probably become an independent–even though I can't vote in any primaries in my state.

    December 4, 2007 05:18 pm at 5:18 pm |
  2. William

    I am glad this time the reporter is more honest than most, including Obama's name in the report.

    Can you imagine Obama has tipped reporters for Hsu's downfall to embarrass Clinton? Now it backfires on himself.

    December 4, 2007 05:29 pm at 5:29 pm |
  3. Charles, Austin

    shame on you CNN. Hsu han't been a top contributor to Barrack. Hsu is Hillary's problem, not the democrats and neither Barracks....

    December 4, 2007 05:29 pm at 5:29 pm |
  4. Ca Native

    Nothing to see here... Move along...

    – $850,000 to Hillary Clinton's campaign
    – Personal Photos of Hsu and Hillary
    – Saxophone autographed by Bill Clinton

    Nope ... nothing to see ... just the same old Clinton Campaign Scandals happening again.

    December 4, 2007 05:30 pm at 5:30 pm |
  5. Davis, NJ

    C'mon CNN !!
    "top contribution for Clinton and Obama"?

    Clinton = $800,000
    Obama = $19000.

    But you can bet on CNN to conflate and dilute to favor or at least palliate the Clinton campaign.
    Congrats CNN – you are getting good at this !!

    December 4, 2007 05:50 pm at 5:50 pm |
  6. haha, orance county, ca

    hahahahaha!!! Unthical practices will not go unnoticed forever, no matter who you are!!

    December 4, 2007 06:06 pm at 6:06 pm |
  7. Bill W, Coatesville, PA

    Are all you people who claim to support the Clintons paying ATTENTION???

    December 4, 2007 06:27 pm at 6:27 pm |
  8. Perry Holz

    Why isn't this on the front page like on other news outlets? CNN is not doing much to counter the charge that they are the Clinton News Network. Quite a difference between this coverage and that of Katrina Leung, the Republican fundraiser.

    December 4, 2007 06:33 pm at 6:33 pm |
  9. DefendTheConstitution

    Well surprise, surprise. So Clinton and Obama both received large sums of illegal campaign funding. Even if they gave it back or gave it to charity it still boosted their funds (along with all of their corporate sponsors) to make them look like top tier candidates.

    Meanwhile, Ron Paul receives real support from the people (and receives the most from serving military) with minimal media attention and now leads the Republicans in campaign financing and the media STILL IGNORES HIM!!!

    I don't care what CNN says – Ron Paul is a top tier candidate!!

    Where is the justice here? Is CNN really interested in informing the people of America or is it only interested promoting the candidates that Time Warner has financed? Can CNN be any more blatantly biased?

    http://rabbit-hole-journey.blogspot.com/

    December 4, 2007 06:34 pm at 6:34 pm |
  10. Joan, Boston MA

    Will Hillary bail him out?

    December 4, 2007 07:16 pm at 7:16 pm |
  11. Larry Olson, Seattle, WA

    Ron Paul is a looney. If he'd keep his mouth shut on foreign affairs he might garner more support, but otherwise he's just flat crazy.

    Now, as far as Clinton, Obama and Hsu go; it's about time something comes of this. The DNC is just as corrupt as the RND. Wake up folks! People like Fred Thompson are the way to go. Small government, more control to the local populace and municipalities!

    December 4, 2007 07:34 pm at 7:34 pm |
  12. Tom, Dedham, Mass

    I love how CNN puts Sillary and Obama in the same sentence as Hsu gave to both of them.

    Hsu bundled $850,000 to Clinton and gave peanuts to Obama.

    Which candidate SHOULD have vetted the contributor a "little bit more"?

    Nice try CNN, not buying your deceitful stories anymore.

    Yes, Billboy, I am being tough on your "wittle ol' wife" and the media on your payroll, isn't.

    December 4, 2007 08:02 pm at 8:02 pm |
  13. mary chicago

    oh they got him who cares put him away he gave hillary money obomba,all of them,demos and yes he critc Hillary Obama took his money faithfully now his name is in the report backfired BO...

    December 4, 2007 08:44 pm at 8:44 pm |
  14. susan philly pa.

    Im voting Biden hopefully he wins Iowa and upsets everyone and all there money.

    wake up Iowa the man is BIDEN BIDEN BIDEN.truth is BIDEN with more expierenced than all.

    December 4, 2007 08:48 pm at 8:48 pm |
  15. Mark, Shreveport, LA

    Didn't the Clintons teach this guy anything?
    If you're illegally raising money for the Clintons and get caught, you flee the country or take the fifth!

    December 4, 2007 10:49 pm at 10:49 pm |
  16. KEITH JAMES LOUTTIT

    Will Hillary bail him out?

    Posted By Joan, Boston MA

    Absolutely! It will be her privilege were she to actually become President! After all, she's already had many of her friends and family members pardoned, why not HSU?

    December 4, 2007 10:57 pm at 10:57 pm |
  17. AN, Fairfax, VA

    I could only imagine the repercussions if Hsu were a Republican fund raiser. The haters would be coming out of the woodwork demanding that heads would roll...including any candidate's that received contributions.

    December 4, 2007 11:07 pm at 11:07 pm |
  18. Darrel @Lone Rock Iowa

    Well if hillary gets in Hsu will get one of those pardons that Bill Clinton so shamed the county and himself on his way out the white house door. If the 800 to 19 figures are correct CNN is not telling it like it is. The press is to be free in America/ not tainted or tilted to give advantage to one party or person over another.

    December 4, 2007 11:57 pm at 11:57 pm |
  19. mike, dallas, TX

    CNN, stop the misinformation. Hsu did NOT contribute to Obama's PRESIDENTIAL campaign. But he has contributed to Hillary's PRESIDENTIAL campaign.

    December 5, 2007 12:30 am at 12:30 am |
  20. mark wilkes barre pa

    How do you spin out of this mess ? I cant believe such an obvious scam by the dnc is not headline political news,, and even worse than that ,I cant believe people aren't screaming mad over there party being part of somthing like this. just another page in the clintons how to succeed in politics handbook

    December 5, 2007 06:13 am at 6:13 am |
  21. Thomas, St. Petersburg, FL

    If Norman Hsu donated to a REPUBLICAN presidential candidate, this story would be splattered all over the media.

    However, since Hsu has donated hundreds of thousands to Hillary Clinton, it has been barely mentioned.

    Perhaps this is yet another "Vast Right Wing Consipiracy" ?

    December 5, 2007 07:38 am at 7:38 am |
  22. Doug, New Jersey

    Ha ha, the libs who would be foaming at the mouth if this were not Hillary and a republican are dead silent here. Almost as silent as the lib NOW when women would speak about being raped by Bill Clinton (sure it was probably bogus but that didn't stop them with the bogus crap from Anita Hill) and NOW with their dead silence over the teacher who named a bear Mohammad who has millions in the Middle East calling for here to be killed.

    Funny how the libs are so silent when the Hsu is on the other foot.

    December 5, 2007 10:57 am at 10:57 am |
  23. RightyTighty

    Bill and Hillary will look great in yellow jup suits too. It's only a matter of time..

    December 5, 2007 11:07 am at 11:07 am |
  24. Eric, from THE Republic of Texas

    Move along. Nothing to see here. Move along. These aren't the droids you're looking for...

    December 5, 2007 03:05 pm at 3:05 pm |
  25. Jose Card

    Hsu + Clinton = scandal

    before the election.

    Can you imagine what kind of scandals we will face if she is elected?

    December 6, 2007 12:20 am at 12:20 am |
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