Posted on 09/22/2007 6:36:56 AM PDT by george76
A Laguna Beach investment firm filed a lawsuit against Democratic fundraiser Norman Hsu on Friday, claiming he defrauded investors out of at least $23 million and required them to donate to Democratic candidates.
According to the lawsuit filed by Briar Wood Investments, Hsu persuaded the company's operator to do business with him by taking him to star-studded Democratic Party events. There, the 56-year-old Hong Kong native was praised by New York Sen. Hillary Rodham Clinton, California Atty. Gen. Jerry Brown and others, the lawsuit said.
As a condition of doing business with the fundraiser, Hsu directed investors to make contributions to certain Democratic candidates, the lawsuit said. The investors turned over tens of thousands of dollars, including $30,000 worth of checks to Clinton's campaign on a single day.
The lawsuit is the latest in a series of legal troubles that continue to mount for Hsu.
Last week, New York investors filed a similar suit against Hsu. On Thursday, federal prosecutors unsealed a criminal complaint accusing Hsu of operating a national Ponzi scheme and reimbursing investors for donations made in their names. And on Friday, a San Mateo County judge ordered Hsu held without bail in a 1991 theft case.
According to the lawsuit, Waters invested with Hsu in part because "prominent persons, including Sen. Hillary Clinton, New Mexico Gov. Bill Richardson, California Atty. Gen. Jerry Brown, national Democratic political adviser James Carville, film director Steven Spielberg, actor (Tobey) Maguire, grocery store magnate/billionaire Ron Burkle and others introduced and/or endorsed Hsu as a friend, colleague and trusted associate."
(Excerpt) Read more at mercurynews.com ...
Seawater doesn’t do it, huh? Lol
SALTY DOG!!
Waters was told he was investing in high-interest loans to companies in need of short-term financing, the lawsuit says. He invested $10,000 in the first deal and participated in about 40 more over the next three years. The deals typically matured in about 100 days and had rates of return that topped 20%.
So they knew they from the start they were loan-sharking, why would anybody have to borrow at 20+% in 1994 when rates were quite low and there was a lending binge going on in US? Why involve anybody else and not borrow at the bank? How does any apparel business with gross profit margins of barely above 20% for top apparel makers and net profit margin of at most 10% - 11% can generate a profit for investors of over 20%. These are not stupid people, folks... if I can check this information in 5 minutes, they had to know this, Waters worked in apparel business before, so how would they "invest" money into loan-sharking operation without "guarantee" or collateral of making it back. This is a "pool financing" by Waters of Briar Wood, not a "Ponzi scheme" by Hsu, as they want to convince us. Now, when Hsu got caught with his illegal campaign contributions scheme (not with the Ponzi scheme, originally,) money flow from those who were laundering money in form of "profits" to make Hsu business (Components Ltd and Next Components) look legitimate and highly profitable, these people want their money back. They were not supposed to lose it, there was no risk - Ron Burkle and Steven Spielberg and Hillary Clinton and Bill Richardson said that, and Hsu, after all was a board member in New School along with Bob Kerrey and Bernard Schwartz and Hochberg, while having no qualifications for being there (who recommended him to New School and on what basis?)...
Eventually, the Orange County cluster grew so big that Hsu asked Waters to act as a conduit, establishing Briar Wood to collect checks from other investors and issue postdated checks to them, which investors could deposit on the date the deals matured.
Source Financing Investors, Briar Wood, Hsu's Components Ltd. / Next Components, Hsu's placement at New School all happened in late 2004 - early 2005, near or after the end of 2004 election cylce when it became obvious or known that John Kerry will not be the President, and in 2008 someone else (Hillary!) may run for Democratic nomination for President and will need a lot of money from many small donors.
According to the lawsuit, when Hsu's problems surfaced late last month, he tried to persuade Waters that the investment business was "all taken care of." He also tried to reassure Waters during a meeting at a Beverly Hills hotel soon after being rearrested in the 1991 theft case.
Two days later, Hsu's checks bounced on a deal set to mature Sept. 5. Briar Wood investors are out at least $3.6 million invested in that deal as well as more than $19 million invested in three others that have not matured, the lawsuit says.
Connecting the dots is easy here.
That's one possible scenario, another is that they were on the other side of real big money "donors" (Burkle? Spielberg? China? anybody could do it once the Components Ltd / Next Components business became established and "successful",) who used Hsu and his "companies" as a middleman, so he would be the conduit for transferring "profit" in his company (after 20+% payout to "investors" / "loan sharks" like Rosenman and Waters) into large number of illegal small contributions to campaigns at the directions of the big money "donors". They could also easily write off the money as a loss on business transaction, it would not even have to be a separate item on balance sheet, simply a negative gross margin, just part of the business.
These were real "donors", and there is no Ponzi scheme here (not even from descriptions of Waters or Rosenman), but there is definitely a money laundering scheme into political campaign. Doesn't it seem conspicuously strange that Hsu seemed to have more interest in Rosenman's and Waters' funds "investors" donating to Democrats / Hillary! than in the "business" itself? That seems to have been the "condition" for making the loan-sharking money. He (or anybody else, it seems) wasn't worried about money and profits being generated and paid back. He wasn't worried about "Ponzi scheme" unraveling (as all Ponzi schemes do), because there wasn't a Ponzi scheme - money were guaranteed by "donors" on the other side of Rosenman and Waters.
Now, how many hedge funds generating outsized returns by laundering money (over 20+%) could be in the businesses like that, only without Hsu's "prior" history which is the real reason he got tripped up?
http://www.captainsquartersblog.com/mt/archives/013557.php
Ed Morrisey’s take on this latest news...OUCH!
When I googled “Briar Wood Investments” Luguna Beach CA THIS is all I got (3 HITS):
http://www.google.com/search?hl=en&q=%22Briar+Wood+Investments%22+Laguna+Beach+CA&btnG=Search
WTH?? Is this a REAL company or another shell? How come no website? How come no info at all on the company? Something smells to high heaven here! Do the investors even have standing to bring a lawsuit as a group? What the hell is going on here??
Oh there are some choice comments in that....RICO eh......that might get HSU to talk...sort of like waterboarding.....
See link at post #84.... RICO charges are possible.....perhaps....
Some critical questions that don’t seem to be addressed at all, or at all adequately in the MSM accounts thus far:
1) Was Hsu really engaged in any pyramid or “Ponzi” scheme?? Or was the “return” to his investors really guaranteed by one or more large backers hiding in the shadows (wealthy Clintonistas such as Ron Burkle, foreign “friends” ala the Riady group, or the ChiComs)???
2) How could there be surplus funds sufficient to both pay out “investors” at 20-40% for just 3 month periods (or 80-160% per annum) AND to provide for all the political donations AND lavish lifestyle Hsu was living? There’s reason to suspect Hsu was backed by real money to keep this going — can someone crunch the numbers to determine how Hsu could have been keeping the “investors” happy until just a few weeks ago AND paying for all the donations and lifestyle?
3) DId the checks start bouncing in the past few weeks because a “Ponzi” scheme was drying up and crashing down, or because once the spotlight hit Hsu his real backers withdrew support and some necessary bank transfers were not made on time? Are the feds really tracking down all bank and wire transfer records etc.?
Global Crossing.
p.s. It was speculated by blogger Flip that the reason Chuck Schumer did not show up on the closely coordinated donation lists for both Hsu and Hochberg was that Hochberg or some other source of “the list” may have had a falling out with Schumer in early 2003.
Here’s another speculation: what if “the list” was being generated by Schumer or someone close to Schumer, and as the scheme ramped up it was decided that it was better to keep Schumer completely out of the picture?? If you look at the list of Democrat ORGANIZATIONS as opposed to individual candidates receiving donations, the Democratic Senate Campaign Committee (DSCC) gets by far the largest chunk of donations..... and guess what the DSCC is headed by..... CHUCK SCHUMER.
Now if you were a millionaire donor like Hochberg (or someone like him generating “the list”) and you had developed some hatred for Schumer such that you would not donate to his campaign, would you still donate big bucks to the DSCC controlled by him??? Or would you simply donate that $145,533 directly to individual candidates?? It’s just my speculation, but I have to wonder if “the list” was coming from Schumer or someone close to him!!
Could you elaborate please?
Briar Wood Investments (or Briarwood) is not a currently registered Corporation or LLC in the state of Calif.
The closest I can come are two defunct companies that filed with the Sec of State (the latter being a defunct brokerage).
Corporation
BRIARWOOD INVESTMENT COMPANY
Number: C0442926 Date Filed: 12/11/1962 Status: suspended
Jurisdiction: California
Address
Agent for Service of Process
Corporation
BRIARWOOD INVESTMENT COUNSEL
Number: C0789856 Date Filed: 12/28/1976 Status: suspended
Jurisdiction: California
Address 1851 E FIRST ST #950 SANTA ANA, CA 92705
Agent for Service of Process
C T CORPORATION SYSTEM 818 WEST SEVENTH ST LOS ANGELES, CA 90017
ORANGE COUNTY DBA
Business Name Number of Businesses Registered Registration Number File Date Expiration Date Last or Company Name First Name Document Type Pub
BRIARWOOD APARTMENTS 1 19986772477 10/14/1998 10/14/2003 BRIARWOOD INVESTMENT COMPANY, LTD FBN NO
BRIARWOOD APARTMENTS 1 19986772477 10/14/1998 10/14/2003 INVESTMENT CONCEPTS, INC. FBN NO
BRIARWOOD APARTMENTS 1 20036960292 10/01/2003 10/01/2008 INVESTMENT CONCEPTS, INC FBN NO
Corporation
BRIARWOOD APARTMENTS, INC.
Number: C1717773 Date Filed: 1/4/1993 Status: dissolved
Jurisdiction: California
Address 17 BLUE ANCHOR CAY RD CORONADO, CA 92118
Agent for Service of Process
R H RASMUSSEN 17 BLUE ANCHOR CAY RD CORONADO, CA 92118
Corporation
INVESTMENT CONCEPTS, INC.
Number: C0560747 Date Filed: 1/14/1969 Status: active
Jurisdiction: California
Address 1667 E LINCOLN AVE ORANGE, CA 92865
Agent for Service of Process
KAYE F RICHEY 1667 E LINCOLN AVE ORANGE, CA 92865
The Orange County Recorders Office shows the following for names close to Briar Wood Investments
Peregrine Systems. ;-)
Just a hunch.
Global Crossing LTD, Bernie Schwartz and Jay Bloom (director) gave ChiComs military high-tech back in 1999/2000.
One of the plaintiffs in the New York case AGAINST Norman Hsu, Source Financing Investors LLP, may be to be related to Source Financing Group, a Jay Bloom company.
If so, then the NY lawsuit is just PR cover; which I suspect is happening in Orange County as well.
my 2 cents.
Ah, thanks. I thought maybe you were referring to some further development regarding CLintonista scumbag Terry McAuliffe, whose vast profit-taking from Global Crossing has still never been adequately explained:
Say McAuliffe sold on October 1, 1999. On that day, Global Crossing shares sold for $26.06. In order to make $18 million, McAuliffe would have had to sell 690,714 shares. To have acquired that many shares from his original $100,000 investment, McAuliffe would have had to get the stock at a split-adjusted price of a little less than 15 cents per share. If, as McAuliffe says, he in fact made $9 million from the sale, that would mean he bought the shares at a split-adjusted price of a little less than 30 cents per share.
http://findarticles.com/p/articles/mi_m1282/is_17_54/ai_90888291
Hey... IIRC, that was an attorney representing Duane Chapman ("Dog" from the Bounty Hunter)
It means that, if it exists, it doesn’t have all of it’s ducks in order (e.g. county and/or state filings). It is feasible that they could claim operation as a DBA in an adjacent county—but then why would they say they are based in Orange County?
Suffice it to say, I don’t trust this Martin Waters anymore than I trust Joel Rosenman.
If you conservatively assume that all of these 40 deals were investments of $10,000 each, a 20 % return of $10,000 ($2,000) times a factor of 40, means $80,000 in profits from what was basically a 3 month investment of $10,000 rolled over about 40 times over about 3 years. So how in the world can Hsu generate $80,000 in profits in 3 years with $10,000 of capital ? Especially considering the business was fraudulent and non-existant. Did Hillary give him tips on cattle future investments ? Was Hsu really good at playing Keno in Vegas ?
Source Financing Investors, Briar Wood, Hsu's Components Ltd. / Next Components, Hsu's placement at New School all happened in late 2004 - early 2005, near or after the end of 2004 election cylce when it became obvious or known that John Kerry will not be the President, and in 2008 someone else (Hillary!) may run for Democratic nomination for President and will need a lot of money from many small donors.
I think the initial concern was winning the Senate in 2006 followed of course by Hillary in 2008. Hsu had it all covered.
11/4/2005 Hsu Wilfred San Francisco, CA 94105 500 Brown, Jerry AG CA
11/23/2005 Paw Winkle Daly City, CA 94015 3,000 Brown, Jerry AG CA
11/23/2005 Chilman Susan Los Angeles, CA 90046 2,000 Brown, Jerry AG CA
The future Attorney General of California would owe him a favor. The new Senate and House would be on his side. The future President of the United States would owe him a ton of favors. He had a 'get out of jail free' card. One problem with the plan. If these were genuine investors, would they not sue him when the pyramid crashed ? Perhaps the investors toward the top were going to guarantee the Ponzi Laundry would not go out of business. As you have stated.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.