Norman Hsu, a former top fund-raiser for the Democratic Party, pleaded guilty Thursday to running a fraudulent investment scheme but he continues to fight charges of making fraudulent political contributions.
Hsu, 58 years old, pleaded guilty to five counts of mail fraud and five counts of wire fraud at a hearing before U.S. District Judge Victor Marrero in Manhattan.
"I would use later investments to pay off earlier investments, so as to create the impression that my investment strategy was operating properly when, in fact, it was not," Hsu said. "I knew what I was doing was illegal,"
Jury selection is scheduled on the four remaining counts of campaign finance fraud in his case beginning Monday.
Hsu faces up to 20 years in prison on the mail and wire fraud charges.
Alan Seidler, Hsu's lawyer, said Hsu made the plea without having a plea agreement with the government.
Prosecutors had alleged Hsu falsely represented to investors that his companies - Components Ltd. and Next Components Ltd. - were in the business of extending short-term financing to companies and promised short-term, high-return investments.
Between 1997 and August 2007, the government claims Hsu convinced investors to entrust him with at least $60 million in a Ponzi scheme. After repaying some investors their principal and interest, Hsu allegedly swindled other investors out of at least $20 million, prosecutors said.
During his plea, Hsu said the scheme began in 1999.
Prosecutors also have alleged Hsu, in order to raise his public profile, pressured some investors between 2004 and 2007 to individually contribute thousands of dollars to candidates for president and Congress whom Hsu supported.
In some cases, Hsu allegedly reimbursed investors for making political contributions with proceeds from the scam, prosecutors said.