NEW YORK -- Norman Hsu, a former top fund-raiser for the Democratic Party and convicted Ponzi-scheme operator, was found guilty Tuesday of illegally funneling tens of thousands of dollars to U.S. political candidates.
The conviction marks the finale to Mr. Hsu's unusual rise from a relatively unknown businessman to a prominent fund-raiser who pulled in hundreds of thousands of dollars for Hillary Clinton and other politicians. However, that fund-raising proved to be his downfall after an August 2007 article in The Wall Street Journal raised questions about whether the contributions violated campaign-finance laws.
On Tuesday, a jury convicted Mr. Hsu of four counts of campaign-finance fraud after about 2½ hours of deliberations. Each count carries up to five years in prison.
Norman Hsu was found guilty Tuesday (May 19), on four counts of campaign-finance fraud.
"I think he expected [the guilty verdict] because it was quick," said Alan Seidler, Mr. Hsu's lawyer.
Earlier this month, Mr. Hsu pleaded guilty to charges related to a Ponzi scheme that prosecutors said raised at least $60 million and swindled investors out of at least $20 million. He faces up to 20 years in prison on each fraud count.
Sentencing on all of the charges is set for Aug. 19. Mr. Seidler said Mr. Hsu plans to appeal.
Prosecutors had alleged that Mr. Hsu pressured some investors in the Ponzi scheme between 2004 and 2007 to individually contribute thousands of dollars to candidates for president and Congress whom Mr. Hsu supported. Mr. Hsu illegally reimbursed some investors for making those contributions, skirting campaign-finance laws, prosecutors said.
In 2007, Mrs. Clinton's presidential campaign agreed to return $850,000 in funds raised through Mr. Hsu. During the trial, the government introduced a voice-mail message of support to Mr. Hsu left by Mrs. Clinton. "What am I going to do with you, Norman? You are working so hard for me," Mrs. Clinton said. "I just don't even know what to say anymore. I've never seen anybody who has been more loyal and more effective and really just having greater success supporting someone than you."
In his opening statement last week, Mr. Seidler, Mr. Hsu's lawyer, argued that the investors were "blinded by greed" and made donations to candidates Mr. Hsu supported because they wanted to keep getting the outsize returns promised by Mr. Hsu.
Mr. Seidler said Mr. Hsu gave $850,000 of his own money and legitimately raised another $1 million for political candidates.
The Ponzi scheme unraveled in the summer of 2007 after investors learned Mr. Hsu was facing legal problems in California related to grand-theft charges from 1992, the government said.
He surrendered to California authorities in August 2007 and was released on $2 million bail. But the following month, after he failed to appear at a second bail hearing in California, he was found unconscious on a train in Colorado. Mr. Hsu said that he intended to kill himself by taking sleeping pills, authorities said at the time.
Later that month, he was charged by federal prosecutors in New York. He has been in custody since his arrest.
2009-05-20 The Wall Street Journal Politics