Norman Yung Yuen Hsu[1] (born October 1951)[2] is a convicted pyramid investment promoter who associated himself with the apparel industry.
His business activities were intertwined with his role as a major fundraiser for the Democratic Party, and he gained notoriety after suspicious patterns of bundled campaign contributions were reported in 2007.
[2] In 1990, Hsu, then living in Foster City, California, declared a bankruptcy,[13] stating that he was practically destitute, with no job, no income, and few possessions other than an SUV and a ring.
[2] That same year, he was also divorced[2] as well as allegedly kidnapped[13] by San Francisco Triad society gang leader Raymond Kwok Chow.
Specifically, authorities claimed Hsu had not engaged in any legitimate business activity, but instead was using funds from later investors to pay returns to earlier ones.
[10] In February 1992 Hsu pleaded no contest to one count of grand theft and agreed to serve up to three years in prison and pay a $10,000 fine.
[16] Hsu then returned to the United States in the late 1990s,[16] despite his fugitive status, and established several addresses in the San Francisco and Los Angeles areas.
[2] He became an investor in Silicon Valley,[13] invested in real estate in the San Francisco Bay Area,[2] and still had engagements in the garment industry.
[20] Democratic Party figures claimed they did not know much about him or his businesses, but appreciated his support;[2] and he became known to them as someone who could quickly raise large amounts of money,[16] and as someone who networked tirelessly and always found ways to be included in high-profile events.
[21] By 2007, Hsu's status within Hillary Clinton's 2008 presidential campaign had risen to the level where he was a "HillRaiser",[16][22] someone who had "bundled" more than $100,000 for her campaign, and to where he co-hosted a $1 million fundraiser at wealthy Democratic Party supporter Ron Burkle's Beverly Hills estate,[3] and in September, he was scheduled to co-host a major gala fundraising event featuring music legend Quincy Jones.
[10] In August 2007, an investigation by The Wall Street Journal revealed potential campaign finance irregularities involving Hsu, in his role as a "bundler", and his long-time associates, the Paw family of Daly City, California.
[6] One day after the release of The Wall Street Journal's investigation, it was reported that the warrant issued after Hsu's failure to appear for sentencing for his 1992 fraud conviction was still valid.
On 6 September, he was arrested by the FBI in Grand Junction, Colorado, after falling ill on the California Zephyr train headed for Chicago.
[2][25][26][27][28][29][30][31][32][33][excessive citations] It was subsequently revealed that Hsu mailed suicide notes to several acquaintances and organizations before boarding the train, and was discovered with prescription pills loose in his compartment.
[13] However, detailed financial records for Components Ltd, a Hsu-controlled entity with no obvious business purpose, reveal payments of $100,000 to nine political donors whose contributions were later bundled by Hsu.
However, investors were told few details about the operation and investigators are trying to determine whether the "bridge loans" involved bona fide business activity or were simply a front for a new Ponzi scheme.
According to the indictment, Hsu made "false promises" to private investors in his companies that they would be paid "guaranteed high rates of return on investments in the short term.
"[9] On 7 May 2009, Hsu pleaded guilty in federal court in New York to ten counts of mail and wire fraud in connection with the Ponzi scheme.
[45] Hsu was sentenced to 24 years in prison and is currently incarcerated in Federal Medical Center in Lexington, KY. His scheduled date of release is 12 August 2030.
[46] "Source Financing Investors LLC," an investment fund started by Joel Rosenman (a Woodstock founder), claims that Hsu owes it $40 million.
[49] It is not clear whether the recipients of Hsu's campaign contributions will be added as defendants to any of the lawsuits as the various funds seek solvent entities from which to recover their initial investments.
Mark Gorenberg, who sat on President Barack Obama campaign's national finance committee, remarked, "Despite it all, I still love the guy, despite everything you read, every experience I ever had with him was nothing but delightful, and I just scratch my head.
"[63] 1) Ianthe Jeanne Dugan (2015-8-11) Former Top Clinton Fundraiser Says 'I Was Greedy' Convicted in Ponzi scheme, Norman Hsu speaks in first prison interview about politics; denies he broke campaign-finance laws Wall Street Journal