Top Dem donor charged in 'massive' scam

— -- Federal prosecutors Thursday charged Democratic fundraiser Norman Hsu with violating campaign-finance laws and conducting a fraud scheme that swindled investors out of $60 million.

The criminal complaint says that Hsu — a major fundraiser for Democratic presidential candidate Hillary Rodham Clinton — contributed tens of thousands of dollars to federal candidates in the names of other donors. Under federal law, an individual donor cannot give more than $4,600 to a candidate for the primary and general elections.

Hsu, 56, of New York also is charged with mail and wire fraud in what Manhattan U.S. Attorney Michael Garcia called a "massive" Ponzi scheme that persuaded investors to pump money into phony companies over the past five years.

At a news conference, Garcia said Hsu's plot was aimed at supporting "a lavish lifestyle." Hsu also gave money to political candidates in an attempt "to purchase a place on the celebrity campaign circuit," he said.

In the complaint, FBI agent Patricia O'Connor said Hsu has confessed to making the phony deals.

Hsu's spokesman, Robert Emmers, declined comment. Hsu attorney James Brosnahan did not return a telephone message.

On Thursday in Colorado, the Mesa County Sheriff's Office released Hsu to officials from California, where he faces sentencing for his 1992 guilty plea in a similar but unrelated fraud case. He fled before he could be sentenced in that case, and turned himself in last month.

The legal troubles of Hsu highlight the perils candidates face as they rely on a far-flung group of top donors to raise campaign cash.

Clinton last week pledged to refund $850,000 to 260 contributors associated with Hsu. Clinton spokesman Howard Wolfson said the campaign, like more than a dozen others that received money from Hsu, were unaware of his legal troubles.

The Clinton campaign is also in the process of returning $9,200 in contributions after a donor, Pamela Layton, said she and her husband were reimbursed by her husband's employer, William Danielczyk, Wolfson said. The employer runs a private-equity company based in suburban Washington.