May 7, 2009 / 5:45 PM / 8 years ago

Democrat fundraiser Hsu pleads guilty to fraud

<p>Norman Hsu (L) speaks with his attorney, James Brosnahan, inside a courtroom in Redwood City, California, September 21, 2007. REUTERS/Paul Sakuma/Pool</p>

NEW YORK (Reuters) - A former Democratic Party fundraiser whose arrest in 2007 prompted Hillary Clinton to return $850,000 in campaign contributions, pleaded guilty on Thursday to fraud charges in an investment scheme.

Norman Hsu, who was sentenced to three years in prison by a California state judge in January 2008, pleaded guilty in Manhattan federal court to charges of mail fraud and wire fraud in running a Ponzi scheme of up to $60 million.

“I knew what I was doing was illegal,” Hsu, 58, said in the hearing in Manhattan federal court. In addition to the California sentence, he faces at least 30 years in prison.

U.S. prosecutors said that from 2000 through August 2007, Hsu convinced investors to put up to $60 million into the scheme, in which early investors are paid with the money of new clients. After making payments, he profited by at least $20 million, according to prosecutors.

He still faces trial on Monday in New York for violating federal campaign laws for making political campaign contributions in other people’s names.

His lawyer, Alan Seidler, said after the hearing that Hsu was innocent of those charges, adding he was just a political “groupie” who did not ask for anything in return for contributions and did not ask others to make contributions on his behalf.

Hsu’s arrest in September 2007 after 16 years as a fugitive prompted Clinton’s presidential campaign to return contributions linked to Hsu. Clinton, then a New York senator, lost her bid for her party’s presidential nomination last year to Barack Obama and is now secretary of state in her former rival’s administration.

Hsu had been considered a fugitive in the California case since 1992 when he pleaded no contest to one count of grand theft in relation to a business fraud but failed to show up for sentencing.

U.S. Securities and Exchange Commission regulators filed civil charges against Hsu, accusing him of using investor funds to compensate sales agents, make political campaign contributions and support his luxurious lifestyle.

Additional reporting by Grant McCool; Editing by Peter Cooney

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below