Exactly, that is the story. Even al-media has started to back off from "Ponzi scheme", but has not [yet] made the leap to real shenanigans - money-laundering. One simply cannot do a "massive Ponzi scheme" with a series of short term loans bearing interest of 20%-40% (and/or 60%-120% annually without even counting compounded interest) without "sugar daddy" on the other end.
Also, the "primary investors" (Martin Waters and Joel Rosenman) being astute businesspeople couldn't possibly think that "bridge loans" of this kind could legitimately bring in this kind of money in the era of easy money available at far lower rates and for longer periods of time to scrapped manufacturers who don't have such fat gross margins to afford these loans. So they had to be assured by someone (with better financial history or the ability to pay back money than Norman Hsu) that their "loans are secure", as Hsu himself put it, before they invested money and they themselves had to assure people that it's a "no-lose" proposition to put money in their hastily formed funds - otherwise who would sell their businesses or get mortgages on their houses or put their life savings on such a scheme, as the article documents.
Mr. Waters says he asked few questions before investing. "I figured if Hillary trusted him, I could trust him," Mr. Waters says.Really???? That's all it took for Waters? A self-identified Republican so trusted Hillary!? That reminds me of Wall Street classic : "Bluestar, Mr Mannheim.Put all your clients in it."
From a guy (Hsu) who sported a chocolate-brown leather bomber jacket with the presidential seal. "Bill Clinton gave this to me," he told Mr. Waters.? I don't think a liberal Democrat like Joel Rosenman would put a $40 million fund together just based on the trust of Hsu's association with Clintons, and not even think of possibility of losing money. Has anyone ever lost money and their good name dealing with Clintons?
From Hsu's email:
"Some people lie when they have to; and I can understand that because all of us may have force into those situation sometime in our lives...some people are just born liars...lying when they have no reason to lie...it is their habit....AND BECOME PART OF THEIR LIVES."
There is also an interesting graph of Hsu's financial history in US with some gaps from 1992 through 2003:
