Hsu Charged in $60 Million ‘Ponzi’ Scheme
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A disgraced Democratic fundraiser, Norman Hsu, has been charged with concocting a $60 million “Ponzi” fraud scheme and related federal campaign finance crimes, federal prosecutors said today.
Hsu was the managing director of two companies that lured investors beginning in 2003 and then operated a pyramid scheme in which Hsu would pay newer investors back with the money earned from the larger, older investors, according to the complaint.
Hsu also would ask his investors to donate money to various political campaigns and reimburse them, a violation of the Federal Elections Campaign Act, the complaint says.
“This case is about self-promotion and greed,” the U.S. Attorney for the Southern District of New York, Michael Garcia, said. “In committing acts of campaign finance fraud, he corrupted a system in which transparency is paramount in order to purchase a place on the celebrity campaign circuit.”
Hsu is charged with one count each of wire and mail fraud, and one count of violating the Federal Election Campaign Act. If convicted, Hsu faces up to 45 years in prison for the fraud charges, a $250,000 maximum fine for the campaign finance charge, and as much as twice the gross gain or loss from the financial fraud charges.
Hsu raised hundreds of thousands of dollars for presidential and congressional campaigns, including that of presidential front-runner Senator Clinton. On September 10, Mrs. Clinton said she would return $850,000 in his contributions.
Hsu was convicted of fraud in 1992 and evaded authorities in the years since. He recently emerged as a generous donor and fundraiser for the Democratic Party. He was also convicted in California for a business scheme that brought in $1 million from about 20 investors. He is set to be sentenced in coming days.