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Inside the Criminal Complaint Against Liu’s Campaign Treasurer

Wednesday, February 29, 2012

The criminal complaint against city Comptroller's John Liu's campaign treasurer, Jenny Hou, on fraud and obstruction charges offers a detailed account of the alleged conspiracy that could land the 25-year old in jail for 60 years.

Much the 25-page criminal complaint reflects the first-hand observations by an undercover FBI agent who posed as a businessman looking to support Liu and who knows how to use a hidden video camera.
 
There are also excerpts of texts and instant messages allegedly sent by Hou about how best to deceive New York City Campaign Finance Board auditors.
 
An unknown number of conspirators allegedly found a way to take large illegal campaign donations, divvy them into smaller amounts and pass them through so-called straw donors so the campaign would qualify for the city's generous campaign financing matching funds paid for with taxpayers money.
 
Liu’s name appears nowhere in the criminal compliant and, for the purpose of the document, Hou's efforts are merely described as being on behalf of a nameless "candidate." What is also instructive is just how much of the alleged criminal activity came after the first arrest in the case back in November 2011.
 
Here are some highlights:
 

  • Jenny Hou on or about July 11, 2011, "participated in a series of instant message chats" with a campaign volunteer  in which she wrote "fyi, CFB (NYCCFB) auditors look very carefully at the handwriting....so if you're doing that, just make sure the handwriting looks as close  to the donors (handwriting) as possible."

  • Hou and others known and unknown devised "a scheme and artifice to defraud, and for obtaining money by means false and fraudulent pretences, representations, and promises, willfully and knowingly would and did transmit and cause to be transmitted by means of wire communication in interstate and foreign commerce, writings signs, signals, pictures, and sounds for the purpose of executing such scheme and artifice." 

  • Since about December 2011, Hou “willfully, knowingly, and corruptly, did obstruct, influence, and impede official proceedings” because she failed to provide documents that she knew to be helpful to investigators, according to the complaint.


  • The complaint says records from the city’s Campaign Finance Board show “the Campaign did not disclose any bundlers or intermediaries for the 2013 New York City election cycle until January 17,2012, despite the fact that the campaign had been raising funds for the 2013 New York City election cycle since  at least in or about December 2009, and the campaign had raised approximately $2,023,572 as of February 24, 2012."

  •  "On or about August 15, 2011"  intermediary-3 "informed the  u/c (undercover FBI agent)" that intermediary -3 "had funneled large campaign contributions through straw donors for the candidate in the past" and had "collected contributions in a similar matter for another local politician, but not to the extend that Intermediary -3  had done for the candidate."

  • "the Candidate and the u/c (undercover FBI agent) then engaged in a brief discussion in which the candidate asked the u/c  abiut the u/c's business background, and the u/c expressed his desire to assist the candidate's 2013 campaign. "

Hou, Jenny Complaint

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Comments [14]

lide

@ maiman: re. your quote "The inference of racism was raised by Hennelly not me, in his original report when he stated this is an important global story and how Liu represented the hopes and dreams of the Chinese and Asian community with his election and what a tragedy it is to those aspirations."

There's no hint of racism raised by Hennelly here. I'm afraid you are missing the nuances in this discussion.

Mar. 08 2012 07:01 PM

Messers Hennelly and Maiman:

Be advised the point has been raised that we are discussing "hordes"
not "hoards".

I am renewing my request for any photos or videos of the gagles being discussed.

Mar. 02 2012 05:42 AM
Rick Maiman from Flushing, Queens

Hoardes of loathsome flying insects is the analogy that gave rise to the original use of the word papparazzi to describe photographers in pursuit of movie stars during filming of an Italian movie in the last century. Unfortunately it stuck. It is seen as derogatory to this day. Are photographers covering political candidates running for President paparazzi? Witless back benchers just love using the phrase thinking it's cool and makes them look like they know what is going on. The inference of racism was raised by Hennelly not me, in his original report when he stated this is an important global story and how Liu represented the hopes and dreams of the Chinese and Asian community with his election and what a tragedy it is to those aspirations.

Mar. 01 2012 01:29 PM

@lide:

- you mean that the correct spelling "hoardes" is "hordes"?
('cause I'm sure at least one of them used "hoardes")

-I wouldn't follow Maiman's "racism" meme down the rabbit-hole
(maybe this "he called us bad names" tangent has already done that)

Mar. 01 2012 11:49 AM
lide

i just have 2 comments:
-- the word both writers intend to use is "hordes", not "hoardes"!!
-- where is there implied racism in this issue? if liu or anyone related to his campaign were to bring up the 'race card', how dare he? (i'm asian american myself) it still sticks in my craw recalling the clarence thomas/anita hill sexual harassment case-- it was not about race, yet thomas used the term 'high tech lynching' to deflect attention from his actions and scared off the white congressional panel afraid of being called racist.

Mar. 01 2012 11:34 AM

@Rick Maiman:

Speaking strictly from the blind ignorance and undramatic motif of a news "junky", I think I sense in your reaction to Mr. Hennelly's characterization some objection not only to the "drama" of his imagery (isn't that something you strive for in much of your own work?), but to the negativity attached to "photographers" likened to "hoardes" of "papparazzi". I believed he compared it to the scene Madoff distinguished by physically pushing back against the swarm of press coverage in the first days of that scandal. (Now my memory is suggesting that it was actually the "press" that was doing the pushing.)
Maybe, as the visual image professional, you can suggest some still or video images of the two scenes (the ones involving Liu and Hou) so that we in the public can judge the seriousness of the Mr. Hennelly's offense.

Mar. 01 2012 11:18 AM
Rick Maiman from Flushing, Queens

Mr Hennelly knew full well that his description of Jenny Hou being "set upon by the papparazzi" was a dramatic motif, and not blind ignorance. He made no such similar reference of the reporters swarming around Mr. Liu at an availability just a few blocks away. If he joins with further commentary on Brian's show this morning I expect he will have given his editorializing some second thoughts. The rising tide of prosecution will inexorably lead to the resignation of Liu if faced with charges of his own. Not the first time fall of a public official. Anyone suggesting even the remote taint of racism, toward the Asian community, Preet Bharara, himself of Indian descent spared no mercy when charging Rajaratnam, or now Rajat Gupta. As per Hennelly; a slur, is a slur is still a slur; glaring and outrageous.

Mar. 01 2012 09:24 AM

lide from brooklyn:

You ask why?

Maybe because the media professionals of our time (this station included) have the fragile self images of spoiled adolescents - and since they are practiced professionals in forming narratives and "photo-shopping" images, they are well aware of the effect that a deprecating noun-adjective can have, with almost no relation to the intent or effect of its object.

My only regret is that Mr. Hennelly's creative characterizations fail him when he's swimming with the local public office holding piranhas that are feeding on the body politic.

Mar. 01 2012 01:52 AM
lide from brooklyn

@maiman: why such an unpleasant and vile reaction from a professional such as yourself? I personally respect and appreciate Bob Hennelly's consistently high quality of reportage of NYC and NJ issues.(btw you should def. do a spell check whenever you spew your comments about)
re. Comptroller Liu, even if he wasn't aware of the extent of his campaign treasurer's unethical and illegal dealings (which i don't believe), how ironic that he is responsible for overseeing NYC's funds. He should resign, in any case, and DEFINITELY not run for mayor.

Feb. 29 2012 11:48 PM

ANA:

My mistake - Quinn retains her sinecure as council president by virtue of the acclaim of her co-conspirators, the members of the city council.

Feb. 29 2012 08:00 PM


Mr. Maiman:

Tough duty - I can see why we shouldn't think of you and your ilk as a hoard.

http://www.politicker.com/2012/02/28/meet-john-lius-arrested-treasurer-jenny-hou/

Feb. 29 2012 07:54 PM
Ana from Brooklyn

Fourth city-wide elected official...? Mayor, comptroller, public advocate... who's the fourth?

Feb. 29 2012 07:46 PM

Mr. Hennelly:

Ms. Hou's age makes it unlikely that she has direct evidence on the workings of the "school for scandal" that is the NY City Council, where three of the four elected officials learned their ethics with regard to public funds, honesty in the use of public monies, and fecklessness to their oaths of office. However, Mr. Liu may be an able guide through those Augean stables. The fourth city wide elected official, Michael Blumberg, made use of that ethical "swamp" in purchasing permission to run for a third term despite a public initiative that had established a two term limit. http://www.nypost.com/p/news/regional/rd_term_is_lush_hour_IHPhRF1WUhlX2PojTnXfyL
After rumors of the city council run, on-going embezzlement scheme came to light ( http://www.nypost.com/p/news/regional/this_is_hers_for_the_faking_i4hBLqCHRGrdOKvxI8sWzH ) City Council president Quinn took to to streets to assure credulous reporters that it was only a way of correcting "mistakes" ( http://www.youtube.com/watch?v=iOqecrHyzko)(there is part 2 and a part 3 that you might want to make time for)(needless to say Quinn was "shocked and surprised" - aren't they all?)

Since 2008, the matter has been slow-walked within the Assistant U.S. Attorney's Office for the Southern District (an alum of Senator Schumer's office) under the supervision of a phalanx of private defense attorneys hired with city funds to deflect criminal liability from council officials and employees. ( http://www.nypost.com/p/news/local/slush_fund_hangover_vdeOps2zPN4vDgHUQO1FLK )

When was the last time you reported on that investigation Mr. Hennelly?

WNYC listeners and the other citizens of NYC have been betrayed: by public officials, including the law enforcers responsible for curbing their rapacious appetites, and most sadly by the news reporters we depend upon.

Feb. 29 2012 07:41 PM
Rick Maiman from Flushing, Queens

Mr. Hennelly: (Caps intentional to denote my extreme disgust) HEARING YOUR REPORT THIS EVENING ON THIS STORY CAN YOU SITE ONE LEGITIMATE REASON FOR REFERRING TO THE SO CALLED HOARDE OF PHOTOGRAPHERS COVERING THE DEFENDANT'S EXIT FROM THE FEDERAL COURT ON PEARL STREET AS "PAPPARAZZI"?; THAT YOU FEARED FOR HER SAFETY BY THESE PHOTOGRAPHERS.
How do you refer to your own professional status? Windbag,Scribbler,Hack or Investigative Reporter. I have covered prodeedings and trials at this court and the old court house at 40 Foley Sq. going back to the days of Michael Milken, Ivan Boesky, Martha Stewart, et al. You've got some helluva nerve calling what we do in the height of the coverage like Raj Rajaratnam's conviction day the activity of papparazzi. How dare you. I expect an apology and a little more respect if you please.

Feb. 29 2012 06:37 PM

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