Skip to comments.Investors, prosecutors seek piece of disgraced fundraiser Hsu
Posted on 09/26/2007 4:44:04 PM PDT by NormsRevenge
Even as he sits in the suburban Bay Area jail that once housed condemned killer Scott Peterson, Norman Hsu is still a wanted man.
Jilted investors who sunk $63 million into Hsu's alleged Ponzi schemes are competing for whatever financial crumbs they can shake from the disgraced Democratic fundraiser. At the same time, state and federal prosecutors are wrangling over where he should be jailed.
"We have the body," California Deputy Attorney General Ronald Smetana argued last week outside San Mateo Superior Court after a shackled Hsu was ordered held without bail.
Hsu's fall from top-tier fundraiser has been swift: He turned himself in on a California fraud case last month after 15 years as a fugitive, then skipped the next court hearing, fled on an Amtrak train and was arrested at a Colorado hospital after attempting suicide on the train.
Now the man who once fashioned himself as a wealthy businessman capable of raising large amounts of campaign cash isn't wanted by politicians, but in the courts. Candidates are scurrying to return Hsu's money and distance themselves from him.
On Wednesday, a state judge in Manhattan refused to freeze the contributions Hsu made to several New York politicians, including Sen. Hillary Rodham Clinton, Gov. Eliot Spitzer and Attorney General Andrew Cuomo because their lawyers were not in court. But the judge did freeze Hsu's bank accounts and sealed his Manhattan apartment at the request of investors.
Earlier this week, state prosecutors said they intended to keep Hsu in the Redwood City jail on the fraud charges until he is sentenced in the 1991 case that alleged he stole $1 million from family, friends and others who thought they were investing in a clothing deal. Hsu pleaded no contest to grand theft in 1992 and agreed to a maximum prison term of three years. He fled California before he was formally sentenced. Investigators believe he went to Hong Kong.
But getting Hsu sentenced to state prison may take some time.
Hsu's defense attorney, James Brosnahan, has said he intends to exploit a California law that requires the same judge who takes a defendant's plea to mete out the sentence. The judge who took Hsu's plea has since retired.
Brosnahan also has said he will seek to undo the plea and force prosecutors back to square one.
Smetana said there's scant legal precedent to help guide a judge in deciding whether to let Hsu out of his more than decade old plea.
Smetana said he will argue it's simply not fair to let Hsu benefit from absconding from justice for 15 years.
Hsu is due back in court in Redwood City on Friday.
Federal prosecutors in New York, where Hsu is also charged with fraud, have said they will seek Hsu's transfer to federal custody. But state officials insisted he will remain in California for a while.
"The normal rule is if you have the body, you have primary custody," said Rory Little, a former federal prosecutor who is now a law professor at the University of California, San Francisco. "The state has primary custody."
Little said typically prosecutors try to informally negotiate who will first prosecute a person facing charges in both jurisdictions. Failing a negotiated resolution, Little said it appears California has the advantage.
Smetana said he has been talking to federal prosecutors, but declined to elaborate on those conversations. A spokeswoman for the U.S. attorney's office in Manhattan declined to comment.
The two sides are also dueling over the $2 million Hsu used to post bond when he turned himself in to California authorities on Aug. 31. A judge ordered the money forfeited when Hsu skipped a Sept. 5 court appearance.
Now that he's been found and jailed, Hsu wants his bail money back. But state prosecutors are fighting to keep the money with the government so it can be used to compensate victims of Hsu's early 1990s Ponzi scam.
Hsu's investors who are suing to recover their alleged losses are actually rooting for Hsu to win that battle for the bail money. They say it will be far easier to compel Hsu to fork over the money than the government.
"Once the state has its hands on the money, it's not really interested really in letting go of it," said Ronald Minkoff, a New York lawyer representing the East Coast investors who claim $40 million in losses.
Minkoff is also going after the hefty retainer Hsu presumably paid Brosnahan, his high-priced Silicon Valley criminal defense attorney.
Many of the investors on both coasts who claim they were duped by Hsu are pursuing the same assets. The problem is, there may not be much left to divvy out.
According the FBI, there's about $83,000 left in one of Hsu's bank accounts. He rented his luxury Manhattan apartment, and when he was arrested he was carrying about $8,000 in cash, the FBI says.
"To a degree, we are competitors," said William Bollard, the Irvine attorney representing a group of Orange County investors. "There is a little bit of a race to the finish line."
This Hsu affair could be going on a long time.. a real long time..
What’s with the lockstep repetition of the phrase “disgraced fundraser Hsu.”
I’m sure it’s being done, but investors and their corporations need to aggressive push the fact that a lot of STOLEN MONEY went to the Democrats and they want the money back. Those who accepted any funds from HSU need to be put on notice that they have received money derived from criminal activity!
Jim, he's not dead....yet.
This so going to be good.......
So maybe there really were investors and not just Chi-Coms. Do the investors’ claims add up. I wonder.
I believe that phrase was carefully chosen. It's pretty much the English translation of the legal expression habeas corpus.
These particular wild dogs are as guity as the cat.
Yup! They’re (politicians) trying to set themselves up as “victims” here. Couldnt see that coming! /sarc
The point is that this is stolen money from the investors or it is not! What makes this any different than if Hsu had been embezzling this money from a bank? Are they really saying that it makes a difference as to WHO receives the stolen money? Yikes!
Is this a case of whos’ on Hsu first?
I noticed that a couple of weeks ago - it's the MSM's way of helping out the Dem's. Hsu was labeled a "disgraced fundraiser" practically before there was any hard evidence that he was guilty of anything - pretty amazing. Jack Abramhoff was always referred to as a "top Republican fundraiser" - never as a "disgraced fundraiser".
What do you bet Hillary is putting pressure on old Jerry Brown not to hand Hsu over to the Feds? The last thing she wants is a federal trial in New York City. She is hoping this whole things blows over in California, far away from the glare of the Eastern media.
The Funny thing about that was Abramoff gave hundreds of thousands of dollars do Democrats, Hsu has only gave a total of $1,000 of his tainted money to one Republican.
re#10 If Hsu was raising money for the GOP, the presstitutes would have a little bit difference in their take. /severe understatement mode and *sigh* with head shaking sadly due to continued dashed hopes for an honest 4th Estate
This is a key point. The lack of aggressiveness on that angle by the investors' attorneys is puzzling. Rosenman's attorney rattles the Breshnahan retainer cage for what--$100k maybe?--while making ineffectual noises at the funds that went to politicians. I would think that going after the Breshnahan retainer has shakier legal basis than going after the donations. Defendant does have a right to counsel, So the argument is an esoteric one about fees, i.e.how much is too much.
From what's been reported, it looks to me that the lawsuits are more indignant theater than anything else, designed to protect Rosenman and Waters from individual investors in the funds--who, I believe, continue to be duped by Rosenman and Waters' singular focus on Hsu.
Man! You got that right!!
It’s not going to hurt their case by asking for the moon, because they knew going in that it was all a show and they weren’t getting anywhere with it...didn’t they?
This is definately a case that the feds should be all over. The question is...WHY AREN’T THEY??
I thought Hsu had 6 MILLION in his checking account...and now they say he had $8000???? What the hell gives?
ANY and ALL people associated with the Clintons are DIRTY!!! ALL.
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