NEW YORK – A federal grand jury on Tuesday indicted Norman Hsu, a top Democratic fundraiser 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.
• Click Here to Read a Copy of the Indictment (FindLaw.com)
The government said Hsu also violated federal campaign finance laws by making contributions to various political candidates in the names of others.
Federal prosecutors said Hsu hoped his lavish contributions to campaigns would raise his public profile and convince more people to invest in his fraudulent financial scheme. To achieve his aims, prosecutors said, Hsu pressured many of his victims to contribute thousands of dollars to various candidates for president and Congress.
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.
He 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.
A message left with a lawyer for Hsu was not immediately returned.
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