In Orange County, the Bay Area, Florida, New York's Long Island and elsewhere, scores of other people put millions of dollars into investment pools they were told would finance "bridge" loans to companies needing short-term infusions of cash. Some said Hsu told them their money went to Chinese apparel makers.
Investors say they were given almost no details about the loans they were supposedly backing or the companies involved. But all were promised -- and, for a time, received -- hefty profits. Hsu's deals matured in as little as 90 days and paid 6% or more.
"It was sure great while it lasted," one investor said.
Now elation has given way to panic as payments on the investments have abruptly stopped. "People are going to lose their homes, their cars," one woman said. "There are going to be bankruptcies."
In New York, the Manhattan district attorney's office is investigating whether funds were misappropriated in Hsu deals there, a development first reported by the Wall Street Journal.
Seth Rosenberg, a lawyer who represents the New York investment fund that stands to lose as much as $40 million, sidestepped the question of whether Hsu's deals ever had any substance.
"Do we know if there were actual investments or the whole thing was a fraud? I don't think it would be appropriate to answer that," Rosenberg said.
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Currying favor
As they look back, Clinton staffers say Hsu's efforts to ingratiate himself seem painfully, embarrassingly obvious. In addition to the post-victory trip to Las Vegas in November 2006 for Solis Doyle, two junior staffers and a New York-based fundraiser, Hsu provided a hotel stay in Las Vegas for two other campaign workers in April 2006.
While at the Mandalay Bay, Hsu took at least some of his guests to a favorite bar, Red Square. It features a huge statue of a decapitated Lenin at the entrance, and the top of the bar is sheathed in ice to maintain the chill of the caviar and exclusive vodkas.
Clinton aides believed Hsu had gotten their rooms on a complimentary basis because he was a frequent visitor to Mandalay Bay, the aides said.
Hsu curried favor through more highbrow efforts as well. He helped fund a Robert F. Kennedy memorial dinner honoring former President Clinton. He gave $75,000 to the University of Arkansas Clinton School of Public Service and $30,000 to the Clinton Global Initiative. Hsu's donations to the school and initiative have been returned, a campaign spokesman said.
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tom.hamburger@latimes.com
robin.fields@latimes.com
chuck.neubauer@latimes.com
dan.morain@latimes.com
richard.cooper@latimes.com
Times special correspondents Claudia Blume in Hong Kong and Mike Saccone in Grand Junction and Times researcher Janet Lundblad in Los Angeles contributed to this report.
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This article was reported by Times staff writers Tom
Hamburger, Robin Fields and Chuck Neubauer in Washington and Dan Morain
in Sacramento.
It was written by Times staff writer Richard C. Cooper.
