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The Hsu Complaint

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from: Bonnie Goldstein

Posted Monday, Sept. 24, 2007, at 11:45 AM ET

On Sept. 20, the FBI charged 15-year fugitive and Democratic Party political donor Norman Hsu with mail fraud, wire fraud, and violation of federal campaign-finance laws (excerpts below and the following six pages; to read the complete complaint, click here).

In 1992, Hsu, then an importer of plastic gloves from China, pleaded no contest to grand theft charges in San Mateo County, Calif., for defrauding investors of $1 million (Page 3). Expecting a jail term of three years, Hsu skipped his sentencing hearing and went on the lam. With apparently scant effort by California law enforcement to apprehend him, he remained at large until late last month. That changed when news stories in the Wall Street Journal reported on the weird disconnect between Hsu's legal troubles and his recent success as a proficient fund-raiser for Democratic candidates, particularly Hillary Clinton. Soon after his story surfaced, Hsu surrendered in California on the outstanding case, posted $2 million bail, and was allowed to remain free until his bail hearing a few days later. Rather than show up for that, Hsu hopped an Amtrak train (Page 4). He didn't get far. The next day, Hsu was arrested in a Grand Junction, Colo., hospital room. His lawyer has told reporters his client had attempted suicide.

While California and Colorado worked out Hsu's extradition, Hsu—explicitly rejecting the presence of his lawyers, (Page 6 and 7)—told Federal Bureau of Investigation agents how in 2003 he developed a Ponzi scheme (Page 5). According to the charging affidavit, Hsu "recruited investors by making false promises of guaranteed short-term, high-return investments." In the beginning, he returned large profits to the "investors." Then "victims often agreed to roll-over their invested funds into new investments, contributing additional, larger sums of money … recruiting new friends to invest." In the end, Hsu "ceased paying the victims the promised interest and did not return the principal" (Page 4). The complaint also describes how Hsu, in "an effort to raise his public profile … pressured victims into individually contributing tens of thousands of dollars to various candidates for President of the United States, the United States Senate, and the United States House of Representatives." Hsu is currently being held in California, awaiting a trial on that state's charges, this time without bail.

Sen. Clinton's campaign has begun returning at least $850,000 to contributors who were "bundled" by Hsu.

Thanks to www.findlaw.com for posting the document.

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hot document
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from: Bonnie Goldstein

Posted Monday, Sept. 24, 2007, at 11:45 AM ET
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Bonnie Goldstein is a former special investigator to the U.S. Senate and investigative producer for ABC News.
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