Fugitive fundraiser Hsu captured in Colorado

by gmony714 | September 7, 2007 at 03:11 am

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One of the Democrats favorite contibutors captured in Colorado. Hillary money man going to jail with no bail.

(09-06) 20:52 PDT SAN FRANCISCO -- Fugitive political fundraiser Norman Hsu, who skipped out on San Mateo County authorities this week rather than face sentencing for a 1992 fraud conviction, was apprehended Thursday night by federal and local lawmen in Grand Junction, Colo.

Authorities said Hsu n the past four years, Hsu raised more than $1.2 million for
Democratic causes and candidates, including the DNC and the campaign of
New York Gov. Eliot L. Spitzer. And in the past six months, Hsu became
a leading fundraiser for Sen. Hillary Rodham Clinton (N.Y.). A person
familiar with Clinton's fundraising, who spoke on the condition of
anonymity, said Hsu had raised "in the hundreds of thousands of
dollars" since January for Clinton's presidential bid.
was taken into custody at St. Mary's Hospital in Grand Junction at 7 p.m. local time. He had been on the lam for almost two days after failing to appear in a Redwood City courtroom Wednesday to surrender his passport.

Hsu was taken off a passenger train at the Grand Junction train station earlier in the day by paramedics who requested a backboard to move him, said Sgt. Lonnie Chavez with the Grand Junction Police Department.

Authorities received a request for medical assistance at the train station at about 11:15 a.m., but the exact nature of Hsu's condition was unclear, Chavez said. Staff at St. Mary's Hospital declined to comment.

FBI spokesman Joseph Schadler said Hsu will be returned to California on the 1992 conviction once released from the hospital.

Hsu's attorney told state prosecutors that Hsu had been on a charter flight that arrived at Oakland International Airport at about 5:30 a.m. Wednesday and then dropped out of sight, said Gareth Lacy, a spokesman for the state attorney general's office.

Amtrak's California Zephyr train offers service from nearby Emeryville to Grand Junction before heading to Denver and Chicago. The Zephyr left Emeryville at about 7:10 a.m. Wednesday and was scheduled to arrive in Grand Junction before noon Thursday.

Hsu's disappearing act seemed to be a reprise of a move he pulled 15 years ago, when he failed to show up for sentencing in the same grand theft case. Hsu was facing up to three years in state prison, a $10,000 fine and restitution payments after pleading no contest to a single count of grand theft in what prosecutors described as a $1 million fraud scheme.

But while free on bail after his plea, Hsu dropped from sight for 15 years, apparently spending time in Hong Kong, the Philippines and Taiwan, only to emerge in recent years as a seemingly wealthy New York resident who donated generously to Democratic political campaigns, regularly attended fundraisers and was photographed with party leaders.

A week ago, Hsu, 56, surrendered to San Mateo County sheriff's deputies in Redwood City after press accounts linked him to the earlier grand theft case. He spent a few hours in county jail before posting $2 million bail and agreeing to surrender his passport.

The state attorney general's office, which is prosecuting the case, initially sought bail of $1 million, but San Mateo Superior Court Judge James Ellis doubled that to $2 million - the amount specified in the arrest warrant.

After Hsu posted bail, his attorney, Jim Brosnahan, sent a legal assistant to Hsu's New York condominium Monday to retrieve the passport but was unable to find it after a 90-minute search.

Before Hsu was captured Thursday night, Pennsylvania Gov. Ed Rendell became the latest Democratic figure to distance himself from the fundraiser, announcing earlier in the day that he would donate to charity almost $40,000 Hsu contributed to his campaign.

"Though Norman is my friend, and remains so, his failure to appear casts a new light on his assertions regarding the original case," Rendell said in a prepared statement. "As a result, I will follow other elected officials and donate the money he contributed to me to charity."

Hsu, listed as a "Hillraiser" committed to bringing in $100,000 or more to the presidential campaign of New York Sen. Hillary Rodham Clinton, has given an estimated $600,000 of his own money to candidates ranging from San Francisco Mayor Gavin Newsom and Assemblywoman Fiona Ma to presidential hopeful Sen. Barack Obama of Illinois. Hsu has helped raise hundreds of thousands more through high-profile events in New York and California and served on the board of trustees of New York City's New School university at the request of Bob Kerrey, the university's president and former Democratic senator from Nebraska.

The size and scope of Hsu's contributions made him one of the party's largest individual contributors. While he gave $23,000 to Clinton and $7,000 to Obama, he also gave $62,000 to New York Gov. Eliot Spitzer, $50,000 to New York Attorney General Andrew Cuomo, and $50,000 to the New York State Democratic Party.

His contributions also included $38,000 to the Tennessee Democratic Party, $750 to Newsom, $1,250 to San Francisco District Attorney Kamala Harris, and $3,500 to the 25th Ward Democratic Organization in Chicago.

In the 1991-92 grand theft case, Hsu was charged with bilking about 20 investors, including his ex-girlfriend, out of about $1 million in connection with a business that was supposed to provide latex gloves to another firm - only no gloves were ever bought or sold, prosecutors said.

"What Mr. Hsu was in the business of was running a Ponzi scheme," prosecutor Ron Smetana said at a preliminary hearing, according to the transcript. "He was taking money and spending part of it on himself and returning it as it was available. As with any Ponzi scheme, the first ones in and the first ones out always do quite well. Those (who) hope that their investment will continue and stay to the end tend to lose their shorts."

After the glove business collapsed in April 1990, Hsu was kidnapped four months later in San Francisco by a Chinatown gang leader in an effort to collect a debt from him, police said. The abduction was foiled after the car they were riding in ran a red light in Foster City and was pulled over by police, who rescued Hsu, authorities said.

[q
url="http://www.washingtonpost.com/wp-dyn/content/article/2007/09/06/AR2007090602748.html?hpid=topnews"]Last
week, before his world came crashing down, Norman Hsu helped organize a
breakfast meeting in San Francisco with prospective donors. The
featured attraction was Democratic National Committee Chairman Howard
Dean.

The meeting was hardly unusual for Hsu, a New York apparel
manufacturer for much of his career whose success at raising money had
propelled him into the upper echelon of Democratic politics.

In the past four years, Hsu raised more than $1.2 million for
Democratic causes and candidates, including the DNC and the campaign of
New York Gov. Eliot L. Spitzer. And in the past six months, Hsu became
a leading fundraiser for Sen. Hillary Rodham Clinton (N.Y.). A person
familiar with Clinton's fundraising, who spoke on the condition of
anonymity, said Hsu had raised "in the hundreds of thousands of
dollars" since January for Clinton's presidential bid.

But his association with Clinton cast an unwanted national spotlight
on Hsu, leading to the discovery last week that there was an
outstanding warrant for his arrest stemming from a 15-year-old felony
theft conviction.

Now, instead of finalizing plans to headline a Sept. 30 Clinton
fundraiser in Woodside, Calif., where Quincy Jones is scheduled to
perform, Hsu is under arrest, after being captured as a fugitive. FBI
agents took him into custody last night at St. Mary's Hospital in Grand
Junction, Colo., the Associated Press learned from FBI spokesman Joseph
Schadler.

On Wednesday, he failed to appear at a court hearing related to the
warrant, forfeiting $2 million in bail. Hsu's attorney James Brosnahan
told a San Mateo County judge he did not know where Hsu had gone. The
office of California's attorney general said it had not expected Hsu to
flee and had not collected his passport.

Another attorney for Hsu, E. Lawrence Barcella Jr., said yesterday
the suggestion that Hsu raised money improperly -- including more than
$290,000 from one family whose members live in a small bungalow and
hold middle-class jobs -- is off base. "I have looked at financial
records that clearly show they have the wherewithal to make those
contributions," he said.

But Justice Department officials are reviewing the allegations to
determine whether an investigation is warranted, according to two
federal law enforcement officials who spoke on the condition of
anonymity.

For many people who crossed paths with Hsu in politics, his
disappearance left them wondering whether they ever really knew him. "I
think a lot of us are scratching our heads," said Hassan Nemazee, a
Clinton fundraiser in New York.

Facts about Hsu are hard to come by. Twenty-year-old clippings from
apparel industry publications say he was born and raised in Hong Kong
and arrived in the United States in 1969 to attend the University of
California at Berkeley. The computer science major went to the
University of Pennsylvania's Wharton School for an MBA. In 1982, with a
group of Hong Kong-based partners, he formed Lavano Sportswear.

The business went bankrupt. Describing that time to a Bay Area
newspaper, Hsu said he was young and "made a lot of stupid mistakes."
But Hsu moved on to form a series of new clothing ventures before going
back to Hong Kong, from 1992 to 1996, for unknown reasons. Returning to
the United States, Hsu invested in several new wholesale apparel and
import ventures that collectively generate about $2 million a year,
according to Dun & Bradstreet estimates.

Hsu's first appearance on the political scene came in September
2003, when a Los Angeles area physician, Stanley Toy, introduced him to
a major Democratic fundraiser who at the time was collecting money for
Sen. John F. Kerry's presidential campaign.

Hsu made a $2,000 donation, the maximum allowed, and the Kerry
fundraiser, who spoke on the condition of anonymity, said it was after
that introduction that Hsu began not only donating but also raising
money for Kerry. Toy did not return calls seeking comment yesterday.

Once Hsu made that first imprint as a big donor, other campaigns
quickly came knocking. Campaign finance records show which candidates
-- including those running for Los Angeles city attorney, California
comptroller, Ohio secretary of state and Massachusetts treasurer --
sought and received his financial help. Starting in 2004, he gave to an
array of federal candidates, including the Senate campaigns of Barack
Obama (D-Ill.) and Clinton.

Nemazee, who was helping head the Kerry fundraising effort in New
York when he met Hsu, said Hsu's attraction from a fundraising
perspective was that he delivered and did so consistently.

When 2008 presidential candidates began recruiting donors, several
reached out to Hsu. But in an interview with The Washington Post in
July, Hsu said he had no doubts where he would land. "I committed
myself [to Clinton] way before she announced," he said. "No caution at
all. I told her I would support her."

The Clinton campaign stood by Hsu until the Los Angeles Times
reported his outstanding arrest warrant. At that point, the campaign
reversed course, announcing it would donate to charity the $23,000 in
direct contributions Hsu made to Clinton's presidential campaign, her
Senate reelection bid and her political action committee. The campaign
does not plan to return any money Hsu raised from other donors.[/q]