Democratic fundraiser Norman Hsu reveled in his role as friend to Bill and Hillary Clinton.
As Hsu raised more than $800,000 for Sen. Hillary Rodham Clinton's presidential campaign, the couple praised him at star-studded events and showered him with thank-you notes. Hsu often wore a bomber jacket that bore the presidential seal, a gift from the former president, he told associates.
But Hsu's turn in the political limelight was about more than ego gratification.
Documents obtained by the Los Angeles Times show how Hsu's business associates traded on his connections -- going so far as to claim that former President Clinton was a Hsu client -- to lure investors into a scheme that took in tens of millions of dollars nationwide.
A marketing brochure distributed by an Orange County firm to attract investors to Hsu's business claimed the 56-year-old Hong Kong native's "extensive political investment community includes former President Bill Clinton, who continues to invest to this day."
Howard Wolfson, a Clinton spokesman, denied that the former president had invested with Hsu. And Sen. Clinton's financial disclosure statements show no investments or income from Hsu for her or her husband.
Still, as a marketing tactic, the claim may have worked all too well: A Southern California couple recently filed a lawsuit saying they lost more than $3 million in a Hsu-run Ponzi scheme -- based in part on the brochure's promises.
In September, federal prosecutors charged Hsu, saying he defrauded investors out of $60 million and violated federal election laws for reimbursing political donors for contributions made in their names.
Investigators and investors have alleged that Hsu used his status as an elite Democratic Party fundraiser to give the appearance of legitimacy to his investment scheme, which promised big profits from short-term bridge loans.
"Hsu's political campaign fundraising activities were part of an effort to raise his profile and induce more people to invest in the Ponzi scheme," FBI Special Agent David A. Cardona said when Hsu was charged.
Hsu invited business associates to fundraisers, where they rubbed shoulders with celebrities and Democratic Party luminaries. Their word of mouth helped establish Hsu's bona fides with potential investors.
But the brochure and the lawsuit filed in October by Gregory and Joyce Adams lay out for the first time how Hsu's network pitched the deals that allegedly turned his Clinton ties into gold.
