12/07/2007

News / Norman Hsu Indicted in N.Y.

The U.S. Attorney in Manhattan formally indicted one-time Hillary Clinton fundraiser Norman Hsu today, laying out what prosecutors described as a "massive fraud scheme" that allegedly left investors in Hsu's fictitious clothing businesses taken to the tune of $20 million.

The indictment charges Hsu with six counts of mail fraud, six counts of wire fraud, and three counts of violating the Federal Election Campaign Act for allegedly squeezing contributions out of his investors, and in some cases, repaying donors who wrote checks to Hsu's chosen political candidates.

Hsu remains in a California jail on separate fraud charges there, but prosecutors in New York said they expect Hsu to be transferred there "in coming weeks."

Hsu's California attorney, James J. Brosnahan, was tied up in meetings today and was not available for comment.

The 13-page indictment offered few new details about the litany of allegations leveled against Hsu after news reports first revealed this summer that the major Clinton fundraiser was wanted on outstanding fraud charges in Northern California. The document describes a complex Ponzi scheme in which Hsu allegedly collected more than $60 million in investments for a clothing business, using each new investment to pay off a previous one.

When victims learned that Hsu was a fugitive several of them contacted him expressing concern, the indictment says. Hsu "falsely reassured many of the victims, stating in sum and substance that their investments were not in danger but that Hsu might need additional time to ensure that checks maturing during the next several days would be covered." The indictment went on to say that millions of dollars worth of checks from Hsu were not honored by banks when his victims attempted to cash them.

In all, the indictment said, the victims lost at least $20 million. In addition to leveling the indictment, prosecutors sought to seize all of Hsu's assets. Among the items specifically listed in the indictment, "A saxophone autographed by a former President of the United States."

--Matthew Mosk
Sources: http://blog.washingtonpost.com/the-trail/2007/12/04/norman_hsu_indicted_in_ny.html?hpid=news-col-blog

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