A federal grand jury on Tuesday indicted Democratic fund-raiser Norman Hsu, a former men's sportswear executive, on charges of duping investors of at least $20 million in a Ponzi scheme and using some of the money to make illegal contributions to presidential candidates.
The 15-count indictment, which was unsealed in U.S. District Court in Manhattan, charged Hsu with six counts of wire fraud, six counts of mail fraud and three counts of violating federal campaign finance laws.
Hsu, claiming to be the managing director of two New York-based apparel firms, Components Ltd. and Next Components Ltd., persuaded people to invest at least $60 million during a seven-year period beginning in 2000, the indictment said. The companies appear to have been fronts for his alleged scheme.
Invoking his fashion background, Hsu allegedly made "false promises" to investors, saying he would give them a "high return'' on short-term investments and, instead, used funds from the latest investors to pay off the older investors, according to the indictment.
Hsu, 56, has been jailed since September for grand theft in a separate Ponzi scheme in California. He had been a fugitive since 1992 after being sentenced to three years in prison.
In the latest case, Hsu perpetrated "a massive scheme that defrauded investors across the United States," Manhattan U.S. Attorney Michael J. Garcia said in a statement.
Hsu swindled his victims, who were not identified, "of at least $20 million," the indictment stated.
The Hong Kong native owned legitimate men's apparel companies in the Eighties, including H Two O Inc. and Laveno Sportswear, which eventually failed. Although a fugitive, he resurfaced and used his fashion credentials to work his way into the inner circles of Democratic presidential candidates. He became a member of the "Hillraiser" group, the top echelon of fund-raising for Sen. Hillary Rodham Clinton. Clinton's campaign has said it returned $850,000 in contributions from Hsu and his affiliated donors.
Hsu wanted to raise his profile and lure more investors to the scheme, the indictment said. He pressured them to give money to candidates of his choosing. If they failed to do so, Hsu allegedly told victims that their investment could be endangered. In addition, he violated federal campaign finance laws, which limit individual donations, by reimbursing investors for contributions to candidates he favored.If convicted, Hsu faces a maximum of 20 years in prison on each of the mail and wire fraud charges and five years in prison on each of the federal campaign finance charges. The indictment also seeks the forfeiture of all of Hsu's property, at least $20 million.
When Hsu was captured in September, a New York investment firm, Source Financing Investors, came forward with allegations of fraud against him. WWD reported that a source close to Source Financing Investors, run by Joel Rosenman, one of the creators of the 1969 Woodstock music festival, said Hsu promised $40 million from Source Financing would be used in the short-term to manufacture men's wear apparel in China for Prada, Gucci, Theory and Hugo Boss, as well as other brands, which would yield a 40 percent profit. The luxury brands Hsu named as clients all said they never did business with him.
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye