Democratic Fundraiser Indicted

Former Democratic fundraiser Norman Hsu was charged this afternoon in a 15-count indictment for engaging in what Manhattan U.S. Attorney Michael Garcia characterized as a "massive fraud scheme" that involved not only bilking investors but also making illegal campaign contributions in other peoples' names to candidates—most prominently, Hillary Clinton.

The federal indictment charges Hsu, currently in custody in California, with bilking investors out of at least $20 million in illegal investment schemes. He used some of that money to make political contributions in 2005, 2006, and 2007, according to Garcia. Hsu contributed so much to Clinton's campaign that he emerged as one of the candidate's $100,000-plus donation bundlers known as "HillRaisers" and once cohosted a fundraiser for her. The campaign has since refunded his donations, which exceeded $850,000.

Today marks at least the second time that Hsu, 56, born and raised in Hong Kong, has faced fraud charges: In early 1991 while in California, he pleaded no contest to charges that he operated a Ponzi scheme. He fled to Hong Kong to avoid his sentencing hearing, but returned to the U.S. as a fugitive in the late 1990s. After news of his criminal past surfaced earlier this year, Hsu turned himself in, fled, and a short time later was recaptured. He is expected to be transferred to New York in the coming weeks, according to Garcia's office.

Other Democrats have also collected money from Hsu, including Sens. Barack Obama and Joseph Biden as well as Gov. Bill Richardson, though Clinton has been the biggest beneficiary.

—Liz Halloran