CBSN

Former Dem Fundraiser Hsu To Plead Guilty

booking photograph of Norman Hsu, from the San Mateo County Sheriff's Office. Usage is free and unrestricted.
San Mateo County Sheriffs Office
Former top Democratic fundraiser Norman Hsu pleaded guilty in federal court Thursday to charges he cheated investors out of at least $20 million in a massive Ponzi scheme.

The 58-year-old Hsu (CHOO) pleaded guilty to 10 counts of wire and mail fraud before U.S. District Judge Victor Marrero. "I knew what I was doing was illegal," Hsu told the judge.

Before accepting the plea, the judge warned Hsu that the charges carry a maximum potential penalty of two hundred years in prison and hundreds of millions in fines.

Hsu did not enter a plea to additional charges of violating federal campaign-finance laws by making contributions to political candidates in the names of others. He is expected to go to trial on those charges next week.

Prosecutors say he pressured the victims of his Ponzi scheme to contribute to political candidates as a way to raise his public profile so he could attract more investors.

Hsu was once a valued supporter of Hillary Rodham Clinton, raising more than $1.2 million for her and other Democratic candidates.

His work on Clinton's behalf became an embarrassment for her presidential campaign, which returned more than $800,000 to donors whose contributions were linked to him.

Hsu was indicted in 2007 on charges of swindling $20 million from victims in what the government described as a $60 million Ponzi scheme that lasted from 2000 until August 2007.

Prosecutors said Hsu sought investors for two companies purporting to offer short-term financing to businesses. The government said Hsu recruited hundreds of victims by guaranteeing them high rates of returns on short-term investments.

The government said he also broke election laws by contributing more than $25,000 to federal candidates in the names of others from 2005 to 2007.

The indictment said Hsu asked individuals to make contributions to designated federal candidates and then reimbursed them from his fraud proceeds.

Federal election law requires that donors give their own money, for which they cannot be repaid; in addition, an individual can only give up to $25,000 in total contributions to federal candidates in a calendar year.

Prosecutors have said there was no evidence that any campaigns were aware of the scheme or acted criminally.

Hsu has been jailed since he was arrested in Colorado in 2007.