LOS ANGELES — The U.S. Securities and Exchange Commission charged Democratic fundraiser Norman Hsu with operating a $60 million Ponzi scheme in a civil lawsuit filed here Monday.
Hsu, one of the biggest fundraisers for Sen. Hillary Rodham Clinton, D-N.Y., is in federal custody, awaiting trial on federal criminal charges that he defrauded investors out of millions of dollars in the scam and made illegal campaign contributions to Clinton and others.
The SEC charges that Hsu raised $60 million from investors by promising high returns on short-term loans to businesses. Instead of making the loans, Hsu allegedly used investors’ money to support his luxury lifestyle, make political donations and pay returns to early investors.
Hsu raised more than $800,000 for Clinton’s presidential campaign. Clinton returned the money after the Los Angeles Times revealed that Hsu was a fugitive from a 1991 theft charge in California in an earlier scheme that defrauded investors. He turned himself in on Aug. 31, 2007, posted $2 million in bail then fled again. He was recaptured in September 2007 in Grand Junction.
Hsu is serving a three-year sentence on the 1991 fraud charges and is scheduled to go on trial in the federal criminal case on Jan. 12.
