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Democratic donor Hsu is caught in Colorado

He falls ill on a train; the FBI arrests him in a hospital. He didn't show in court this week on a 1992 arrest warrant.

September 07, 2007|Dan Morain and Chuck Neubauer | Times Staff Writers

SACRAMENTO — Democratic fundraiser Norman Hsu, the patron to would-be presidents who found himself staring at the prospect of imprisonment and federal investigation, was arrested in Colorado on Thursday.

Hsu, 56, was on an eastbound Amtrak train about noon when he fell ill, and Amtrak personnel took him to St. Mary's Hospital in Grand Junction, Colo., a hospital spokesman said.

There, he was arrested by the FBI a few hours later on a federal charge of unlawful flight to avoid prosecution. He was expected to appear before a federal magistrate-judge as early as this morning, pending his likely extradition back to California.

"He has to be brought before a federal magistrate judge as quickly as practicable," FBI spokesman Joseph Schadler said.

The warrant for his arrest remained under seal. Federal sources said last week that the FBI had opened an investigation into Hsu's fundraising activities.

The strange case dates back to 1991, when Hsu pleaded no contest to grand theft in San Mateo County south of San Francisco in a scheme in which he bilked investors out of $1 million. He was supposed to be sentenced in 1992 to as many as three years in prison, but he failed to appear.

He resurfaced a decade later as a well-heeled apparel business owner based in New York who often traveled to Los Angeles and the San Francisco Bay Area.

Starting four years ago, Hsu became a benefactor to Democratic politicians nationally, giving hundreds of thousands and raising far more.

He has been among New York Sen. Hillary Rodham Clinton's most aggressive fundraisers, generating more than $100,000 for her presidential run and regularly appearing as co-host of her galas, including ones put on by billionaire Los Angeles investor Ron Burkle and San Francisco Democrat Susie Buell.

Hsu also gave to some of Clinton's rivals for the presidential nomination, including Illinois Sen. Barack Obama and New Mexico Gov. Bill Richardson. Politicians have returned the money or are donating it to charities. They distanced themselves in recent days, after Hsu's past was revealed by The Times and after questions were raised about his fundraising activities, first by the Wall Street Journal.

Hsu turned himself in last Friday and posted $2 million, promising to return to San Mateo County Superior Court on Wednesday to surrender his passport. However, he failed to appear, setting off the manhunt that ended in Colorado.

Gareth Lacy, a spokesman for California's attorney general, said Hsu had arrived by charter jet at the Oakland airport about 5:30 a.m. Wednesday but wasn't heard from again. When it became clear Hsu had fled the state, California authorities sought help from the FBI

dan.morain@latimes.com

chuck.neubauer@latimes.com

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