Hsu Broke Election Laws, FBI Charges

In another case, he allegedly told an investor, identified as "Victim 5," that for them to continue to do business, the investor needed to donate to candidates of Hsu's choosing. "Hsu reimbursed Victim 5 by adding the amounts from the political contributions to checks paying Victim 5 profits and principal on his/her investments with Hsu."

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After everything collapsed, the complaint states, an unnamed investment fund held checks from Hsu worth more than $40 million, to be drawn from a bank account containing $83,000.

Ronald Minkoff, an attorney for Source Financing Investors, which invested in what was thought to be an apparel business run by Hsu, said that his clients have been cooperating with the FBI probe, and that he is pleased to learn the criminal investigation is moving ahead. The firm filed a lawsuit against Hsu on Wednesday to recover its investment.

Minkoff said all investors who have lost money with Hsu are trying to determine what happened to the $60 million. Some of the money, he said, was used to pay off earlier investments. He said he has been informed that a checkbook recovered by the FBI showed a balance of $6 million.

The location of other funds remains a mystery. Hsu lived for a time in Hong Kong, where he registered several businesses under an address in an upscale, residential apartment building overlooking Hong Kong harbor. But the companies appear to have been dissolved when Hsu declared bankruptcy there in 1998.

When Hsu was caught by authorities after falling ill on an Amtrak train in Colorado earlier this month, he had with him a suitcase that contained $7,000 in cash and his passport, according to the federal complaint. "It will be nice to have Mr. Hsu here in New York to face both our civil and criminal justice systems," Minkoff said.

Staff writer John Solomon, correspondent Edward Cody in Hong Kong and researcher Madonna Lebling contributed to this report.