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Investors Fear Hill Fund-Raiser Took $40 Million
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hillarynews
Joined: 24 Jan 2007
Posts: 2255
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 Posted: Fri Sep 14, 2007 5:03 am Post subject: Investors Fear Hill Fund-Raiser Took $40 Million |
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 Investors Fear Hill Fund-Raiser Took $40 Million
New details emerged yesterday about the finances of the mysterious Democratic fund-raiser Norman Hsu, with the revelation that a private equity fund representing about 100 investors in New York gave him $40 million this year for a loan pool he said would generate a high rate of return.
Category: Top Story
The investors were notified this week that their money might be in jeopardy, in light of disclosures that Mr. Hsu defrauded investors in a Ponzi scheme 16 years ago in California and faced accusations that he engaged in similar conduct more recently, a Manhattan lawyer for the fund said.
The lawyer, Seth Rosenberg, said that managers of the investment fund tried in recent days to cash checks from Mr. Hsu but that they were returned because of insufficient funds. The concerns about the fate of the investment were first reported yesterday by The Wall Street Journal.
Mr. Rosenberg represents Source Financing Investors, a fund with about 100 participants that is managed by Joel Rosenman, who has said he met Mr. Hsu through a mutual acquaintance five years ago. Mr. Hsu told potential investors that he was pooling money to make short-term loans to private-label fashion designers in the United States to buy garments made in China, and that typical returns for someone who invested in the pool exceeded 40 percent.
Source Financing Investors sent a letter to its investors this week saying that it was concerned about what had happened to the $40 million entrusted to Mr. Hsu, and that it had notified the Manhattan District Attorney’s Office, which is investigating. Mr. Rosenberg said fund managers were shocked by the discovery of Mr. Hsu’s past legal troubles.
“Obviously, people with a proven history of success in finance wouldn’t have invested unless they believed it made economic sense,” he said. “They had every reason to believe these were authentic financial transactions that related to real business deals.”
Mr. Hsu, a major bundler of campaign contributions for Senator Hillary Rodham Clinton’s presidential campaign, was arrested last week after skipping a court appearance related to the 1991 fraud case. It was the second time he had vanished, the first being in 1992 when he was due to be sentenced to up to three years in prison on the fraud conviction, but fled and went on to start a new life as a businessman and later as a political fund-raiser in New York. He turned himself in last month after news accounts revealed an outstanding warrant for his 1992 disappearance.
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Source: The Hillary Project
Description: reporting the news about Hillary that the media refuses to |
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