Thursday, September 20, 2007

Hsu to Be Charged with Fraud and Campaign Finance Violations

Norman Hsu, previously known for his fundraising on behalf of Democratic party candidates and a bizarre train trip to Colorado, will be indicted on fraud and campaign finance charges, according to the Wall Street Journal (here).  The case involves millions of dollars of investments that are missing, and campaign contributions to a number of candidates, including Senator Hillary Clinton, that may involve improper reimbusements to donors.  Once documents on the case are available they will be posted. (ph)

                                                                                          

UPDATE #1:  U.S. Attorney Michael Garcia's remarks are available below.  Hsu is accused of perpetrating a ponzi scheme and also using straw donors, some of whom were also investors, to donate thousands of dollars to candidates.  According to Garcia: " This case is about self-promotion and greed.  Hsu perpetrated a massive ponzi scheme to support his lavish lifestyle and in the process stole tens of millions of dollars from unsuspecting investors."  Regarding the campaign contributions, Garcia asserts that Hsu made them "to purchase a place on the celebrity campaign circuit." (ph)

Download us_v_hsu_prepared_remarks_usa_garcia_sept_20_2007.pdf

                                                                                          

UPDATE #2:  The criminal complaint is below.  It charges Hsu with three counts: mail fraud, wire fraud, and campaign finance violations.  It is usually the case that a grand jury indictment will be issued in the near future outlining a wider array of charges, so the criminal complaint is just the first step to keep Hsu in the system.  The complaint alleges that Hsu defrauded investors of $60 million.  It describes the contents of his locked briefcase that was searched pursuant to a warrant that contained the following:

(1) HSU’s passport; (2) approximately $7,000 in cash; (3) checkbooks for bank accounts used by HSU to carry out his fraudulent scheme; (4) hundreds of thousands of dollars worth of checks from HSU’s victims; (5) bank receipts reflecting millions of dollars worth of financial transactions conducted by HSU; (6) hand-written ledgers reflecting specific amounts of campaign contributions to be made by specific victims on behalf of various candidates for Federal Office; (7) Federal Express shipping labels for materials sent by HSU via overnight mail from Components Ltd. in New York, New York; a Cartier watch and Tiffany jewelry; and (8) receipts reflecting HSU’s travel throughout the United States via a corporate jet service.

It also describes, in very general terms, a statement by Hsu confessing to the ponzi scheme, which he made while in a hospital in Colorado after waiving the right to counsel.  Needless to say, that waiver is likely to be challenged by his lawyers. (ph)

Download us_v_hsu_criminal_complaint_sept_20_2007.pdf

http://lawprofessors.typepad.com/whitecollarcrime_blog/2007/09/hsu-to-be-indic.html

Fraud, Prosecutions | Permalink

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Comments

wow,i learned a lot.
thanks.

Posted by: al | Sep 20, 2007 7:51:37 PM

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