The U.S. attorney for Manhattan filed a 16-page criminal complaint against Norman Hsu today. You can read it here.

Hsu is charged with defrauding investors of more than $60 million. The scam, as described by prosecutors, was actually pretty simple. Hsu would lure investors in by delivering on small-time deals, gaining their trust. But when it came time for the big deals, he never actually invested the money as promised -- instead, he just used newer investors' money to repay older investors, and so on and so on. The classic Ponzi scheme.

Interestingly, the prosecutors say that Hsu's considerable fundraising skills (for Hillary Clinton and other Dems) were part of the fraud:

During the same time period, NORMAN HSU, the defendant, in an effort to raise his public profile and thereby convince more victims to invest in his fraudulent scheme, pressured victims into individually contributing tens of thousands of dollars to various candidates... he supported. HSU made implied threats to the victims leading them to believe that their failure to make the required political contributions would adversely affect the victims’ ongoing investment relationship with HSU.

The complaint also alleges that Hsu reimbursed two people for $20,000 in political contributions, a crime.

The charges, two counts of fraud and one of violating campaign finance laws, amount to a maximum 45-year sentence if served consecutively. Hsu also faces a maximum fine of $120 million.

Things are going to get a lot worse for Norman Hsu before they get better. From The Wall Street Journal (sub. req.):

Federal officials are expected to bring a criminal case against Norman Hsu today, charging the Democratic super-donor with operating a $60 million pyramid scheme and violating campaign-finance laws.

The case, to be announced this afternoon by the U.S. attorney's office in the Southern District of New York, encompasses complaints by investors who gave tens of millions of dollars to Mr. Hsu, who said he was putting the money into a lucrative apparel operation. It also is expected to charge Mr. Hsu with crimes relating to his legendary fund-raising.

Update: The AP reports the prosecutors will announce an indictment at 1 PM.

Later Update: Oops. The AP now says that it won't be an indictment, but a criminal complaint.

The going suspicion in Washington has always been that politicians are not prone to ask too many questions of contributors as long as the checks keep coming. But never has a contributor's hidden past blown up in a campaign's face quite like it has for the Clinton campaign in the case of Norman Hsu.

The story began just two weeks ago when The Wall Street Journal noticed that one of Hillary Clinton's biggest donors was a family that lived in a single story home near the San Francisco airport. The father, William Paw, was a mail carrier; his wife was a homemaker. And yet the couple and their children had given $45,000 to Clinton since 2005. The contributions closely, and suspiciously, matched the timing of those by a New York businessman named Norman Hsu. It's illegal to reimburse individuals for making campaign contributions.

The next day, The Los Angeles Times made the story a scandal when it reported that Hsu had been convicted in California state court of stealing $1 million from investors in the early 90s. He'd failed to show at a sentencing hearing and been on the lam ever since.

After that story, he made his way back to California, but then promptly disappeared again after posting $2 million for bail. After sending out a "To Whom It May Concern" suicide note via FedEx to acquaintances and charitable organizations to whom he'd donated (like, ironically enough, The Innocence Project), he hopped on an Amtrak train to Chicago. On the train, he locked locked himself in a compartment. A passenger discovered him the following morning shirtless, wedged against the door in the fetal position. Pills were scattered over the floor. He was arrested after being transferred to a hospital in Colorado.

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