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Two Former Liu Aides Convicted In Illegal Campaign Fundraising Scheme

NEW YORK (CBSNewYork/AP) - Two former associates of a candidate seeking to become the city's first Asian-American mayor were convicted Thursday in a scheme to illegally raise campaign funds.

The defendants were charged amid an undercover FBI investigation of the campaign fundraising for City Comptroller John Liu, a Democrat. A Manhattan jury delivered the verdicts on the first full day of deliberations.

Jurors heard secretly recorded tapes prosecutors said showed Liu's two associates, Jia "Jenny'' Hou and Xing "Oliver'' Wu Pan, plotted to cheat the city out of campaign matching funds and then lied about it. Defense lawyers argued there was no proof their clients ever intended to break the fundraising rule.

The jury convicted the pair after only one day of deliberations.

Liu was never charged and has denied any wrongdoing. Following the convictions, Liu released the following statement:

"I am deeply saddened by the verdict. I continue to believe in Jenny being a good person and exceptional individual. I look forward to this year's Mayoral election and will continue to ask the voters for their support."

Liu also scheduled a media availability later Thursday evening to answer questions.

Two Former Liu Aides Convicted In Illegal Campaign Fundraising Scheme

The jurors had seen a case based on secretly videotaped meetings between Pan and an undercover FBI agent who posed as a wealthy restaurant owner who wanted to open a chain of Chinese restaurants.

His aim, he told Pan, was to meet and impress Liu by making a large donation to his mayoral campaign. The donation was to be much larger than the law allows if the campaign wants to get matching funds from the city.

Jurors found with that, the plot was hatched to use straw donors to conceal the source of the large illegal donation.

Prosecutors charged that coded language was used by Pan and Hou to make sure that Liu knew the source of the money.

The defense argued that Pan was drawn into the illegal scheme by the undercover agent. The jurors did not buy that or the defense's claims that Hou knew nothing about the scheme to use straw donors.

Prosecutors also used emails and wiretaps to make their case against Pan and Hou.

Hou, of Queens, and Pan, of Hudson County, N.J., had pleaded not guilty to conspiracy and attempted wire fraud; Hou also had pleaded not guilty to obstructing justice and making false statements.

Prosecutors allege the pair plotted to circumvent a $4,950 contribution limit by using straw donors, people recruited to funnel other people's money, so they could boost the Democrat's campaign account.

Prosecutors said Hou and Pan met a man named Richard Kong who portrayed himself as a wealthy donor willing to go along with a scheme to skirt campaign finance rules.

In a sting, Kong, who was a federal agent, contacted Pan, saying he wanted to make a $16,000 donation. Hou and Pan were accused of arranging for 20 people to make donations of $800 each, contributions that would have fraudulently qualified Liu for matching funds, according to the charges.

(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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