New York City Comptroller’s Campaign Treasurer Arrested

Earlier this week, U.S. Attorney for the Southern District of New York Preet Bharara announced the arrest of the campaign treasurer for New York City Comptroller John Liu.

Jia “Jenny” Hou is charged with one count of conspiracy to commit wire fraud, one count of attempting to commit wire fraud and one count of obstruction of justice. Each count carries a maximum sentence of 20 years in prison.

The U.S. Attorney’s Office alleges that Hou participated in a scheme that used “straw donors” to funnel large, illegal contributions above the individual limit authorized by the New York City Campaign Finance Board, which increased the amount of matching funds the CFB provided to the campaign.  (Read the complaint here.)

In a statement released Tuesday afternoon, Liu issued a statement expressing surprise at the arrest:

“I am stunned by this news about Jenny Hou.  These accusations against her are uncharacteristic and unexpected. Jenny is a smart, hardworking person who I hope will be treated fairly.”

Two weeks ago, one of Mr. Liu’s top fundraisers was indicted on similar charges.  Prosecutors said straw donors were promised reimbursement for their contributions by a donor who wished to exceed the legal limit of $4,950 for individual donations.

In November, the FBI arrested Xingwu “Oliver” Pan during a sting operation on charges of conspiracy to commit wire fraud and attempting to commit wire fraud. (Read prior post here.)

While Comptroller Liu was not named in the indictment, this is obviously not going to help advance his 2013 mayoral campaign.