Comptroller’s Campaign Aide Is Arrested on Fraud Charges

February 28, 2012 Brooklyn Eagle Staff

Share this:

NEW YORK (AP) — The campaign treasurer for New York City Comptroller John Liu was arrested on fraud charges Tuesday in a continuing probe of his fundraising efforts.

Jia Hou, 25, also known as Jenny Hou, was arrested on charges that she was part of a scheme that used straw donors to funnel large, illegal contributions to the campaign for the Democrat who is considered a potential successor to Mayor Michael Bloomberg. The federal government said the investigation had turned up evidence of at least 40 fraudulent donations.

Hou, of Queens, was charged with conspiracy to commit wire fraud, attempting to commit wire fraud and obstruction of justice. If convicted of all charges, she faces up to 60 years in prison.

Defense attorney Martin Adelman said Hou will assert her innocence.

“She’s an idealistic young woman. I believe when all the proof comes out, that’s how she’ll be seen,” he said.

“New York’s campaign finance laws are not optional,” U.S. Attorney Preet Bharara of the Southern District of New York said in a statement. “Today, we allege that Jia Hou, a campaign treasurer, was a central figure in a coordinated scheme to break the city’s campaign finance laws.”

He said she concealed the use of straw donors to subvert the city’s electoral system.

Janice K. Fedarcyk, head of the FBI’s New York office, said Hou circumvented campaign finance rules meant to limit the influence of wealthy contributors on political campaigns.

“In a very real sense, Hou is accused of undermining the democratic process,” she said.

She also was charged with obstructing the government’s investigation of fraud in connection with the campaign’s fundraising efforts.

The charges were brought several months after a New Jersey man was arrested on charges he conspired to funnel illegal contributions donated by an undercover FBI agent posing as a businessman.

Prosecutors said Hou was responsible for all financial disclosures related to the campaign. They said she participated in a scheme to use straw donors to circumvent the $4,950 limit on individual donations so that the campaign could more often collect up to a maximum of $1,050 in matching funds that the city provides for each contributor.

The government said Hou instructed one campaign volunteer to imitate the handwriting of campaign donors on contribution forms to disguise the campaign’s use of straw donors. It said she discussed with another campaign volunteer how to conceal information about campaign fundraisers to avoid bringing attention to the possible use of undisclosed intermediaries and straw donors.

Prosecutors said the obstruction of justice charge stemmed from Hou’s effort to frustrate the investigation by failing to produce documents in response to subpoenas and by representing that her production of documents was complete when it was not.