Top Democratic Party fundraiser pleads guilty to running a Ponzi scheme
On May 8th Norman Hsu, a former top fundraiser for the Democratic Party, pleaded guilty Thursday to running a fraudulent investment scheme, but continues to fight charges of making fraudulent political contributions.
Hsu, 58, pleaded guilty to five counts of mail fraud and five counts of wire fraud at a hearing in New York federal court, admitting that he used new investor money to pay off older investors in order to give the impression his investment scheme was legitimate. “I knew what I was doing was illegal,” Hsu said. It feels like so many years ago, but Hsu’s the guy who skipped town after a warrant for his arrest was issued, only to resurface on an Amtrak train in Colorado after having injured himself.
Jury selection is scheduled on the four remaining counts of campaign finance fraud beginning on Monday. Hsu faces up to 20 years in prison on the mail and wire fraud charges. Alan Seidler, Hsu’s lawyer, said he made the plea without having a plea agreement with the government.
Prosecutors had alleged Hsu falsely represented to investors that his companies - Components Ltd. and Next Components Ltd. - were in the business of extending short-term financing to companies and promised short-term, high-return investments.
Between 1997 and August 2007, the government claims Hsu convinced investors to entrust him with at least $60 million in a Ponzi scheme. After repaying some investors their principal and interest, Hsu allegedly swindled other investors out of at least $20 million, prosecutors said.
