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Donor charged over $60m fraud
20/09/2007 23:22 - (SA)
New York - A Chinese-American businessman whose huge donations caused a major embarrassment to the Democratic Party last month has been charged over a $60m fraud scheme, prosecutors said on Thursday.
Norman Hsu, who was believed to be one of the top donors to Democratic presidential hopefuls Hillary Clinton and Barack Obama, was charged by New York prosecutors with fraud and violating federal campaign finance laws.
Hsu, 56, operated two companies through which he recruited victims by guaranteeing high rates of return on short-term investments, paying them with money handed over by newer investors in the scheme, prosecutors said.
He later pressured his investors to contribute tens of thousands of dollars to various politicians he supported, telling them their investment relationship with him depended on it.
"In committing acts of campaign finance fraud, Hsu corrupted a system in which transparency is paramount," New York Attorney Michael Garcia said.
"This case is about-self promotion and greed. Hsu perpetrated a massive Ponzi (fraud) scheme to support his lavish lifestyle and in the process stole tens of millions of dollars from unsuspecting investors," he added.
According to the Federal Bureau of Investigation, Hsu last week admitted to its agents in Colorado that he had used his two companies for "phony" deals and had pressured investors into contributing to political candidates he endorsed.
If convicted on the charges, Hsu faces up to 45 years in jail.
Clinton and Obama vowed last month to donate the campaign donations they had received from Hsu to charity after questions were raised about hundreds of thousands of dollars in donations linked to the disgraced businessman.
- AFP
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