'Flat broke' Clinton fundraiser pleads not guilty

Posted on Thursday, February 28, 2008 5:17 PM ET
Filed Under:

By Jonathan Dienst, WNBC Investigative Correspondent

Democratic fundraiser Norman Hsu pleaded not guilty today in federal court in New York to orchestrating a $60 million fraud and making illegal political donations. After the hearing, Hsu's lawyer told WNBC that the once high-flying entrepreneur is "flat broke."

In leg irons and handcuffs, Hsu was flown to New York last night by U.S. Marshals. In this exclusive video shot by WNBC in New York, Hsu appeared gaunt and dazed as he walked on the tarmac at a New York-area airport.

Hsu's multi-layered legal troubles caused embarrassment for presidential contender Sen. Hillary Clinton, and prompted her to return $850,000 in campaign contributions. Hsu was indicted in December for mail fraud, wire fraud and violating the Federal Election Campaign Act.

The clothing entrepreneur also was sentenced in January in San Francisco to three years in prison for stealing about $1 million from investors. In the New York case, prosecutors allege he swindled investors out of $20 million between 2000 and 2007 by getting them to invest $60 million in a Ponzi scheme and promising them high returns on short-term investments. If convicted, he faces 20 years on each fraud charge and five years on each campaign finance charge.

Hsu, 56, is accused of using straw donors to funnel money into Sen. Clinton's campaign, as well as those of other Democratic politicians. Clinton campaign officials have said they knew nothing of Hsu's alleged scheme and have turned his donations over to charity.

-The Associated Press contributed to this report.

Comments

Please do NOT say he's Hillary's contributor, he's also Obama's contributor as well. Why do you always treat Hillary so unfair?

Judy (Thursday, February 28, 2008 6:11 PM)

HILLARY AND HER CAMPAIGN MORE THAN LIKELY NEW OF NORMAN HSU AND HIS SCHEME AS WELL AS OTHER THINGS SUCH AS JENNIFER FLOWERS, WHY SHE WONT RELEASE HER TAX RETURNS,HER SCHEDULE AS FIRST LADY, THE RELEASE OF THE PHOTO OF OBAMA IN KENYA. HOW CAN WE HAVE A PRESIDENT WHO IS SNEAKY, SECRETIVE, AND SCANDALIST. HILLARY AND HER CAMPAIGN IS UP TO SOMETHING AND THE AMERICAN PEOPLE KNOW IT. HER AND BILL OBVIOUSLY HAD SOME TRICKS UP THERE SLEEVE DURING THERE TIME AT THE WHITE HOUSE. THE AMERICAN PEOPLE NEED ANSWERS AND I WANT THEM I WANT TO KNOW WERE SHE GETS HER MONEY FROM AND THE OVERSEAS BUSINESS HER AND HER HUSBAND HAS GOING ON. THE SAME TIME SHE WAS PRESSING OBAMA TO RELEASE HIS TAX RETURNS SHE SHOULD HAVE RELEASED HERS.

S.Brown, Phladelphia, Pennsylvania (Thursday, February 28, 2008 6:40 PM)

He is not the only one got in fraud who gave money to the Clinton's campaign, why is it that the news channels are not following up with the Peter Paul lawsuit against the Clinton's? Preparations for the trail in Los Angeles is in full gear know, and the trail is to be in October of 2008 with all three Clinton's.

Wilhemina Lewis, Windermere, Florida (Thursday, February 28, 2008 7:01 PM)

Clinton knew nothing about this?  I don't believe it for a second...

Lynn (Thursday, February 28, 2008 7:24 PM)

What kind of campaign is Sen Clinton running? Whenever something bad turns up they know nothing. Again Clinton scandles in the White House if elected President I can see it now.

Anthony, San Diego, CA (Thursday, February 28, 2008 7:44 PM)

Of course Hillary had no idea, anyone remember Peter Paul? The "charity" the money went to was probaly Bill Clinton's "charity" aka what rich people use to hide money from the government in order to avoid paying taxes and then funnel the money to other freinds who help them do things like win(steal) elections.

John (Thursday, February 28, 2008 8:22 PM)

This is why it's so important for Hillary to share her financial information with American citizens.  The American people want to believe her but without proof it seems business as usual going forward.  Please prove everyone wrong before March 4.  Afterwards, it will be to late.  All the experience in the world won't make up for character.  

LJ (Thursday, February 28, 2008 8:42 PM)

Nice.....

Love the company Hillary keeps... seems like there's a theme going on within this campaign.

Karen, NYC (Thursday, February 28, 2008 8:50 PM)

Doesn't look like a Clinton pardon is in the offing!

TSC, Western MD (Thursday, February 28, 2008 9:08 PM)

Hillary knew exactly who was contributing to her campaign and exactly where he got the money from. She's just ac rooked as Bill.

Eaton, Houston, Tx (Thursday, February 28, 2008 9:26 PM)

Any comment, Hillary supporters? Those who lives in glass houses should not throw stones. Hillary was attacking Obama about Renzko, but Obama have the presence of mind and integrated in not mentioning Hillary's involvement with shady characters like Hsu

mike@yahoo.com (Thursday, February 28, 2008 10:55 PM)

Hmmm, Isn't this the very same thing she was bashing Obama for??? Must be that it doesn't count when its in HER camp Plus hers is almost a $1,000,000. compared to his what was it $100,000. or so. In she own CLEVER way I guess if she just ignores this it will "go away"

John Dough,Chicago, Illinois (Friday, February 29, 2008 2:37 AM)

And I'll bet that the "Clintons" did not know anything about this man or how much money he gave them, sorry gave Mrs. Clinton

gary_levon@msn.com (Friday, February 29, 2008 3:21 AM)

It amazes me that Mrs. Clinton believes that she is qualified to be President.  Here in this article we have another example of her not even knowing what’s happening right next to here.  Perhaps her campaign should send some more letters or pictures that she does not know about.  Mrs. Clinton is not qualified to be President.

Mat Larson, Eau Claire, WI (Friday, February 29, 2008 10:29 AM)

I bet the Clinton's don't know anything about their tax returns either; you know, the one they refuse to release.  I wonder how much of the $5 million loan was from payments from outside the U.S.  

Wes Durham, N.C. (Friday, February 29, 2008 2:14 PM)

With Hillary's "35 years of experince"  she should have known where this money was comming from.  I am still waiting for Hillary to enlighten the voters of exactly what her "35 years of experience" involves and includes.

Mike Philadelphia, PA (Friday, February 29, 2008 3:17 PM)

Just one of MANY reasons whay Hillary doesn't need to be elected..She is and always has been a crook

Willey Ankeny, IA (Friday, February 29, 2008 4:04 PM)

You know everyone should read the column it said that he was both campaigns fundraiser so Obama's just as guilty.  So eat that Obama you should have know also.

kathygage@fairbanksparking.com (Friday, February 29, 2008 5:47 PM)

With Hilary, we do know what we are getting.  Experience.  She knows protocol, foreign policy,and is more experienced than Obama in the ways that ONLY someone that LIVED in the White House for 8 years can be experienced.  There is no way he has that experience. Obama would make a wonderful Vice President. This fundraiser stole for himself and he used some of the money in ways she would have no way of knowing. Be real. McCain sent the picture. If he can break down their campaigns and not have a finger pointed, why not.  He is the one the winner will run against.  He thinks he will beat them both because he is a white man.  By the way I am a white woman and I can tell you white men think they are top dog no matter what. I think having both a woman and a black person, in the White House, will be a great thing for our country. Colin Powell would have won against Bush if he had run.  I just pray that Obama is not too good to be true.  Sounds like it to me.  

noblushing@aol.com (Friday, February 29, 2008 6:59 PM)

Hildebeast is as crooked as any that have ever been in Washington. She knew it and thought she could sneak it by the naive americans

Julie Mayfield, Atl GA (Friday, February 29, 2008 8:48 PM)

You know everyone should read the column it said that he was both campaigns fundraiser so Obama's just as guilty.  So eat that Obama you should have know also.
kathygage@fairbanksparking.com (Friday, February 29, 2008 5:47 PM)
Kathy maybe YOU should read the entire column. Nowhere did it state that ANYONE FROM OBAMA'S CAMP ACCEPTED ANY MONIES FROM THIS PERSON!
Take another sip of kool-aid, light a cigar, and stick a fork in hillary because she's done.

Norman E. Hussein Harvey, Sr. VA (Friday, February 29, 2008 10:49 PM)

Yeah right!!
Come on before saying false statements people investigate the whole thing with PETER PAUL!! Hillary knew about all this!! She's corrupt!! Investigate her!! We DONT want another criminal in the white house!!

Kitty, SF, CA (Saturday, March 01, 2008 1:23 AM)

Yep, just because he gave $850,000.00 to Hillary, he did give to others, ALL Democrats! and Has ONLY Given These Ill gotten Contributions to Democrats, so c'mon, blaming just Hillary is wrong, Blame the Entire Democrat Party starting at the Top!

Allen, Rochester, Ny (Saturday, March 01, 2008 2:14 AM)

and lets all applaude the economy and the mortgage crisis now!  at least bill had our country moving forward, and, do not discount hillary. she was the brains behind that operation.

janethomas. phoenix, az (Saturday, March 01, 2008 6:50 AM)

Google seach 'The Power of Nightmares,' watch the videos the search points to, then ask yourself "Are there any US politicians with any integrity at all?" I think not. This issue cropped-up during a campaign, and well before the mantle of true power was bestowed, so you can imagine what happens after total power is achieved. Become politically active, get rid of the status quo before the government forgets that the constitution is simply a reminder to them that civil rights exist independently of government.

Charles, Indiana (Saturday, March 01, 2008 9:28 AM)

I was going to stop coming to the site cuz I get so disgusted at the yellow journalism.

But I think I better stay  to unmask this mess and advocate the truth!

MSNBC, are ratings that bad that you have to lose the outstanding journalistice qualities that have been nbc's legacy. You have a legacy of quality, factually accurate and objective journalism, but  you are marring that legacy.

Laurie Philadelphia, Pa (Saturday, March 01, 2008 3:35 PM)

Don't call this deep investigation. Call it sub-par journalism with a negative slant on ONE presidential candidate.

Laurie Philadelphia, Pa (Saturday, March 01, 2008 3:37 PM)

Why isn't anyone asking hard questions about the Clinton Foundation, the connection with Mr. Giustra and his business ventures being realized while traveliling with Bill under the guise of the Clinton Foundation, and connecting it all to tax returns?????  I kept waiting for those questions to come up in the debates and no one seems to want to open this line of questioning.

Janine Evansville, IN (Sunday, March 02, 2008 1:58 PM)

Well here we are.  Trying to decide which candidate has the better judgement to lead our nation?  This is the second article in the span of five minutes where Clinton has received campaign funds from people that are, to say the least, criminals.  Ok I realize that its impossible to do background checks on your donors, or to question every donation, however, we aren't talking about a 100 dollar donation here.  This is big money.  When questions arose about Rezko, and as soon as Barack found out about Rezko's dealings, he immediatly took Rezko's donations and gave them to charity.

In the previous article, about Hillary refusing to return donations from a firm that is being investigated for sexual harrassment of its female employees, allegedly one of the worse cases in recent history, Hillary has merely shrugged and said she's keeping the money until they prove the company guilty.  Which we all know, could be a long time.  Barack didn't wait for the verdict to come in on Rezko.  He acted with quick deciviness.  It is incumbant upon the candidates to avoid even the appearance of corruption.  Hillary needs to realize that her integrity is much more important than her wallet.  All the candidates really should take a lesson here.  I'm sick to death of corrupt politicians who are more interested in winning then they are in doing the right thing.  

Nickie Kalla, Moscow ID (Sunday, March 02, 2008 2:19 PM)

Why is this not getting the attention in the media that it should? I believe that the media should be all over these sinister acts, so that Americans can be very informed about who they are voting into office. CHALLENGE to all media oulets, Clinton thinks one way for her familys' lifestyle, and a totally different way for the rest of Americas' familys'.

Cheryle Harper - Atlanta, Georgia (Sunday, March 02, 2008 2:21 PM)

I’m not willing to play the Clinton games again. She should “reject and denounce” the money and the people who gave it to her. What if they end up being guilty and she has their money in her pocket?

Steadno Fenix (Sunday, March 02, 2008 3:42 PM)

All I can say is "character is what you do when no one is looking".  But someone is always looking, hence we have to look at the choices we make and then prepare suffer the consequences.

Karen Bishop, Grand Prairie, Texas (Sunday, March 02, 2008 7:00 PM)

Clinton fundraiser?  What a mis-leading headline!
Hsu was a DEMOCRATIC fund-raiser who contributed to both Hillary and OBAMA!
The media is so biased it's pathetic!  No wonder people don't know anything about Obama. The media covers Obama's rear the same way they have for G.W. Bush all these years. If the truth was put out there on BOTH candidates, people could make an intelligent decision on their own.  America does not need the media to decide who should be the next president!

M Rund, Las Vegas, NV (Sunday, March 02, 2008 7:33 PM)

YOU SEEM TO SCRUTINIZE DONATIONS TO HILLARY BUT NEVER OBAMA. HE HAS RAISED MORE MONEY THAN HER SUPPOSEDLY IN SMALL DENOMINATIONS. I WONDER HOW MUCH OPRAH HAS CONTRIBUTED SO FAR. MAYBE YOU CAN CHECK ON THAT.

ED DEE, SACRAMENTO, CALIFORNIA (Sunday, March 02, 2008 11:54 PM)

Barak Obama received $19,500 from Hsu and people he introduced to him.  Hillary Clinton received $850,000.  Obama returned the money and has sent letters to all donors that were related to Hsu to verify the ligitimacy of their donations.  Additionally, he has introduced legislation to require candidates to disclose the identity of bundlers like Hsu and the amounts they raise.  His commitment to transparency is what makes the difference between him and Clinton.

Scott Wahlstrom (Saturday, March 08, 2008 6:49 AM)



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