NEW YORK — Former top Democratic fundraiser Norman Hsu used his associations with famous political families like the Clintons and the Kennedys to polish his image and attract investors to his financial frauds, a prosecutor told a jury at the opening
NEW YORK — Former top Democratic fundraiser Norman Hsu used his associations with famous political families like the Clintons and the Kennedys to polish his image and attract investors to his financial frauds, a prosecutor told a jury at the opening of a trial Tuesday. Assistant U.S. Attorney Rua Kelly told the jury in Manhattan that it will see photographs of the Hong Kong-born Hsu with famous politicians and will hear his former investors describe being pressured by Hsu to make political donations in their names that they would be reimbursed for. The prosecutor said Hsu used that method to dodge campaign donation laws restricting how much a candidate can receive from a single contributor. Hsu’s trial comes just days after he pleaded guilty to 10 counts of wire and mail fraud, admitting that he cheated investors of at least $20 million in a pyramid scheme in which he paid off early investors with the proceeds he collected from later investors. His lawyer, Alan Seidler, described the plea to the jury and noted that his 58-year-old client, sitting in court in his blue prison uniform, faces 200 years in prison on those charges alone. The mention of the potential penalty drew an objection from prosecutors that was sustained by U.S. District Judge Victor Marrero. Seidler, though, had made his point and continued to cast his client in a more sympathetic light, saying the campaign contributions were made willingly by investors eager to impress Hsu "because they were greedy and frankly dumb." The prosecution told the jury that Hsu ripped off investors for nearly a decade with a variety of claims, including that he operated a business that provided short-term loans at high-interest rates to businesses and that he also invested in clothing and technology companies. Kelly said he failed to invest their money, instead using it to pay off earlier investors or to live a lavish lifestyle that included lots of jewelry, fine wines and champagne, vintage clothing and four-star restaurants. "There wasn’t any investment," Kelly said. "He was just shuffling people’s money around." Kelly said many of his victims had no idea they were violating the law when they allowed Hsu to reimburse them for their political donations. She acknowledged their ignorance, saying some investors "knew little about investing and even less about politics." Seidler said Hsu donated about $850,000 of his own money to political candidates and helped raise an additional $1 million for Democratic candidates through about 75 people he knew who also made contributions. He said Hsu gave some $3.5 million to charitable causes. After Hsu’s 2007 arrest, Hillary Rodham Clinton returned more than $800,000 to donors whose contributions were linked to him. He was accused of raising more than $1.2 million for Clinton and other Democratic candidates. His donations became an embarrassment for Clinton’s presidential campaign. An indictment in federal court in Manhattan in 2007 accused Hsu of causing $20 million in losses for victims in a $60 million pyramid scheme that lasted from 2000 until August 2007. ______ Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.