Report: $40 Million Borrowed by Dirty Democratic Fundraiser Norman Hsu is Missing

NEW YORK – The mystery of where a dirty Democratic fundraiser got the money to lead a lavish lifestyle, fund political campaigns and post a $2 million bond to get out of jail appears to have a Woodstock connection, according to a report published in Wednesday's Wall Street Journal.

The newspaper reports that a company run by Norman Hsu, who donated nearly $2 million to Democratic candidates since 2004 — including presidential hopeful Sen. Hillary Clinton — recently received $40 million from a Madison Avenue investment fund run by Joel Rosenman, one of the creators of the fabled Woodstock rock festival in 1969.

Now, that $40 million is missing, Rosenman reportedly told investors this week.

Hsu reportedly told Rosenman the funds provided by Source Financing Investors would be used to manufacture apparel in China for top designers such as Gucci and Prada, and would yield a 40 percent profit, according to documents examined by the newspaper.

Rosenman now says that when Source Financing tried to cash checks from Hsu's company, Components Ltd., the checks bounced.

Rosenman reportedly now wants Hsu to repay the entire $40 million.

Source Financing's dealings with Hsu appear similar to the 1991 fraud case in which Hsu was convicted of grand theft for failing to repay investors in a Chinese latex gloves deal.

He was scheduled to be sentenced in 1992, but fled before the hearing. He turned himself in Aug. 31 after 15 years on the run, only to become a fugitive once again last week when he failed to appear for a bail reduction hearing.

He was arrested last Thursday in Colorado.

Rosenman told his investors that the Manhattan District Attorney's office is looking into the case. The Wall Street Journal, however, reported that a spokesman for the district attorney did not respond for comment.

The newspaper reported that its analysis of Hsu's campaign finance reform records shows he has links to more than $1.8 million in donations to Democrats since 2004.

He also is credited with raising $850,000 for Clinton's presidential campaign, which announced Monday that it would return all donations linked to Hsu.