Norman Hsu Found Guilty of Violating the Federal Election Campaign Act

NEW YORK—Lev L. Dassin, the Acting United States Attorney for the Southern District of New York, announced that Norman Hsu was found guilty today on all four counts in the superseding indictment charging him with violating the Federal Election Campaign Act by making contributions to various political campaigns in the names of others. Hsu was found guilty following a six-day trial before U.S. District Judge Victor Marrero in Manhattan federal court.

The evidence at trial established that every year from 2004 through 2007, Hsu asked other individuals to make contributions to designated federal candidates. Hsu directly reimbursed the individuals for the political contributions they had made on his behalf. Contributions amounted to in excess of $2,000, but rose to exceed $25,000 in each of the following three years.

On May 7, 2009, Hsu pleaded guilty to five counts of mail fraud and five counts of wire fraud in connection with an investment scheme in which he defrauded investors across the United States of millions of dollars.

Each of the mail fraud and wire fraud counts carries a maximum prison term of 20 years in prison and a maximum fine of the greater of $250,000 or twice the gross gain or less from the offense. Each of the four counts of federal campaign finance fraud of which Hsu was found guilty carries a maximum prison term of five years in prison and a maximum fine of the greater of $250,000 or twice the gross gain or loss from the offense.

Hsu, 57, is scheduled to be sentenced on the campaign finance, mail and wire fraud counts on August 19, 2009 at 9:30 a.m. by Judge Marrero.

Mr. Dassin praised the work of the Federal Bureau of Investigation and thanked the Department of Justice’s Public Integrity Section for its assistance in this case.

This prosecution is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Katherine A. Lemire, Alexander J. Willscher and Rua M. Kelly are in charge of the prosecution.

Note: The following text is a quote:

http://newyork.fbi.gov/dojpressrel/pressrel09/nyfo092909.htm

Former Political Fundraiser Norman Hsu Sentenced to 292 Months in Prison for Ponzi Scheme and Related Campaign Finance Crimes

Preet Bharara, the U.S. Attorney for the Southern District of New York, announced that former political fundraiser Norman Hsu was sentenced today to 292 months in prison for operating an $80 million Ponzi scheme and violating federal campaign finance laws. Hsu pleaded guilty on May 7, 2009, in Manhattan federal court to counts one through 10 of the superseding indictment. Hsu was then convicted of four counts of campaign finance fraud on May 19, 2009, following a six-day jury trial. U.S. District Judge Victor Marrero imposed the sentence today in Manhattan federal court.

As established by the evidence at trial and statements made during today’s sentencing proceeding:

Hsu, 58, of New York, was the managing director of two companies, Components Ltd. and Next Components Ltd. Hsu solicited investments in the companies by promising guaranteed short-term, high returns. Hsu claimed that companies would generate funds to pay these high returns by providing short-term financing to other businesses. After receiving money from victim investors, Hsu, for a time, paid interest and returned principal as promised. Believing Hsu to be trustworthy and the companies he controlled to be legitimate and based on Hsu’s public relationships with prominent political figures, victims often agreed to roll over their invested funds into new investments with Hsu; to invest more money with Hsu; and to recruit friends to invest with Hsu. In reality, money Hsu returned to earlier investors was paid with money Hsu received from subsequent investors. From 2000 through August 2007, Hsu convinced victims to invest at least $100 million in his fraudulent scheme. In the end, after making some payments intended to perpetuate the scheme, Hsu swindled his victims out of at least $80 million.

In addition to the wire and mail fraud charges, Hsu was found guilty by a Manhattan federal jury of four counts of violating the Federal Election Campaign Act by making contributions to various political campaigns in the names of others. The evidence at trial established that in 2005, 2006, and 2007, Hsu asked other individuals to make contributions, totaling more than $25,000 for each calendar year, to designated federal candidates. Hsu then directly reimbursed the individuals for the political contributions they had made on his behalf.

Hsu was sentenced to 240 months in prison for the wire and mail fraud charges and 52 months in prison, to run consecutively to the 240-month term, for the campaign finance fraud charges.

In imposing Hsu’s sentence, Judge Marrero stated: “Hsu’s dishonest use of political campaigns to perpetuate his fraud strikes at the very core of our democracy.” Judge Marrero also sentenced Hsu to three years of supervised release and extended the time for ruling on an order of restitution for 90 days from the date of sentencing.

“Norman Hsu betrayed the trust of his victims by stealing their money with false promises of fake returns in order to finance a luxurious lifestyle,” said U.S. Attorney Bharara. “He broke federal campaign finance laws to pump up his public profile and bolster his victims’ belief in his phony investment program. Today’s sentence underscores our commitment to stop swindlers like Hsu in their tracks and bring them to the bar of justice.”

Mr. Bharara praised the outstanding investigative efforts of the FBI.

If you believe you are a victim of the Components Ltd. and Next Components Ltd. investment fraud, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the U.S. Attorney’s Office for the Southern District of New York, at (866) 874-8900, or Wendy.Olsen@usdoj.gov. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.

This prosecution is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Alexander J. Willscher and Rua M. Kelly are in charge of the prosecution.

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