May 7, 2009 -- Disgraced top Democratic Party fundraiser, Norman Hsu, pled guilty Thursday to charges of running a Ponzi scheme that defrauded investors of at least $20 million. The government asserted that Hsu intertwined his scheme with his political activity and pressured his investors to contribute to his favorite political candidates, including then Senator Hillary Clinton's presidential campaign.
Hsu was slated to stand trial on Monday in Manhattan's federal court, but according to long time court observers, Hsu was worried that fallout from the Bernard Madoff case could have resulted in a tough climate for the trial of an accused Ponzi-schemer, and the potential for a very stiff sentence.
Hsu, 58, has been in jail since his arrest in 2007. He told a federal judge that he is pleading to ten counts of mail and wire fraud.
Hsu was indicted after a suspicious pattern of bundled campaign contributions in 2007 raised alarms.
At that time it was also discovered that Hsu had been a fugitive from a 1992 warrant, a fact that had escaped notice for 15 years despite his high profile political fundraising. Hsu, an apparently wealthy apparel magnate, had pleaded no contest in 1992 for what authorities called a fraud scheme involving latex gloves that cost investors more than $1 million, but never showed for his sentencing hearing at the time.
Upon his arrest in California at the end of August 2007, Hsu met his bail and then fled the jurisdiction before a bail reduction hearing at which he was supposed to turn in his passport.
When he was rearrested in September 2007 in Colorado it was disclosed that Hsu had before his disappearance, mailed suicide notes before boarding the train.
Clinton, Obama and Biden Campaigns Returned or Donated Hsu Contributions
In the months prior to his arrest in 2007 he had become a top fundraiser for Hillary Clinton's presidential campaign and co-hosted a fundraiser with billionaire Clinton supporter Ron Burkle.
After his 2007 arrest, Clinton's presidential campaign announced it would refund the $850,000 in donations connected to Hsu saying that "out of an abundance of caution," all money raised by Hsu for the campaign would be returned to the approximately 260 individuals from whom Hsu reportedly raised the funds.