Hsu under Federal indictment for $60 million fraud, campaign finance violations

Reuters/ABC News:

Democratic fund-raiser Norman Hsu was charged on Thursday with fraud and campaign finance violations in a case that has prompted presidential candidate Sen. Hillary Clinton to return $850,000 in contributions.

U.S. Attorney Michael Garcia unsealed a criminal complaint in New York charging Hsu, 56, with perpetrating a $60 million "pyramid" fraud scheme and committing related federal campaign finance crimes.

He was charged on one count of mail fraud and wire fraud and one count of violating the Federal Election Campaign Act. If convicted he could face 20 years jail for each of the fraud charges, and five years on the campaign finance charge.

Hsu, who was arrested in Colorado this month, had been a donor to several candidates including Clinton. On September 10, the Clinton campaign said it would return about $850,000 in campaign contributions from Hsu.

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The complaint said Hsu was the managing director of two companies that purported to extend short-term finance to businesses, attracting investors with promises of high returns. As new investors came in, their money was used to pay the original investors.

In an effort to raise his public profile, Hsu pressured investors to contribute tens of thousands of dollars to various presidential and congressional candidates, the complaint said.

"Hsu made victims believe that failure to make political contributions to candidates he supported would jeopardize their investment relationship with him, and put their money at risk," the complaint said.

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There is more. The swiftness of this investigation is encouraging. It is also probably disheartening for Democrats who benefited from the contributions. This is quite a comedown from their Spring action line that Democrats were out raising Republican candidates for President at a rapid pace. Now there is reason to question the validity of many of those contributions. These cases will also take the Democrats off message as they keep having to explain how they got all that dirty money. They also should have to explain how they wound up as props in a giant fraud scheme. It does not say much about their vetting process or their judging of character. The case also so what a sham campaign finance reform was.