Norman Hsu arrested again: is it just plain avarice, or avarice grounded in alcoholism?
Best runner-up for story of the month ever:
Norman Hsu, until recently a large donor to Democratic Party luminaries, was arrested–again–for missing a court hearing–again–relating to charges of grand theft, to which he pleaded no contest in 1992. Hsu’s sordid story is consistent with undiagnosed alcoholism, by far the best explanation for his numerous bizarre exploits.
Hsu, 56, a purported businessman whose rags-to-riches story no one seems able to explain, filed for bankruptcy twice, the first time in 1990. Just two years later, after charming friends and relatives into investing in what turned out to be a multi-million dollar Ponzi scheme, he forfeited $2 million in bail when he failed to appear for sentencing. He seems to have moved to Hong Kong for a time before returning to the United States in the late 1990s. Although he never registered to vote, he became politically active in 2003, apparently “encouraging” investors to make campaign contributions because it “was good for business.”
Hsu became a campaign “bundler,” in which he delivered contributions from many sources. While campaign contribution rules limit donations any one person can make to a political candidate, there is no limit to the amount of contributions an individual can round up from friends and associates. Hsu is accused of circumventing the rules by reimbursing donations made by a number of individuals, many of whom had no obvious means from which to make contributions.
The set-up for Hsu’s latest investment scheme, like the first one, is reminiscent of Ponzi’s style. Joe Rosenman, who was a principal backer of the 1969 Woodstock music festival, was introduced to Hsu in 2003 and quickly invested $50,000 in exchange for a postdated check for $57,000 for 4 1/2 months later. Successfully cashing these and other checks built up enough trust for Rosenman to reel in friends and family, and in 2005 he set up a company, Source Financing Investors (SFI), that lent Hsu millions. A suit filed on behalf of SFI portrayed Hsu as pretending to lend money supplied by SFI on a short term basis (“factoring”) to men’s apparel companies that didn’t exist. The suit alleges Hsu, rather than lending the funds to legitimate enterprises, was really using the tens of millions of dollars to fund his “pet political fundraising projects and an extravagant international lifestyle.” The deal that finally appears to have gone sour, meaning Hsu couldn’t raise money from other sources to continue the scheme, was one for which SFI provided $1.27 million, purportedly “for the sole purpose of equity financing the production of various apparel items,” for which Hsu promised to repay $1.56 million.
Recently, another political fundraiser said she recalled Hsu having arrived “incredibly late” for a luncheon, where he exhibited so many nervous mannerisms she found it hard to follow what he was saying. After his second arrest and disappearance, he was found roaming around without shoes or shirt, appearing disoriented and “freaked out” on an Amtrak train. This is the same man who had been a fugitive since 1992, who seemed so trustworthy that no one dug into his background, who seems to have appeared out of nowhere and who showered politicians with at least hundreds of thousands of dollars. It’s the same con artist who managed to organize multimillion dollar financial schemes despite a trail of business failures and two bankruptcies. These behaviors are suggestive of an alcoholic attempting to stave off the late stages of his disease by wielding power over others. While his power-seeking misbehaviors in the early stages required that the charming Hsu sweet talk otherwise sophisticated investors into giving them the shirts off their backs, his latent late-stage alcoholism took form in taking the shirt off his own back. As usual in hypothesizing alcoholism as an explanation and not an excuse for his misbehaviors, we give Norman Hsu, like Charles Ponzi in whom alcoholism is confirmed, the benefit of the doubt.
The case against Hsu, which could cost him 45 years behind bars, according to New York prosecutor U.S. Atty. Michael J. Garcia is “about greed.” My guess is it’s really about alcoholism, in which avarice is usually grounded.