Two former aides to New York City Comptroller John Liu were convicted Thursday of attempting to use straw donors to defraud the city of campaign matching funds, casting a long shadow over Liu's bid to emerge from a crowded field and win the mayor's race this year.
The convictions of former Liu fundraiser Xing Wu "Oliver" Pan and former treasurer Jia "Jenny" Hou on the first full day of jury deliberations in federal court in Manhattan were lauded by U.S. Attorney Preet Bharara, whose prosecutors alleged in court that Liu knew of the scheme.
"Cases like this give the people of New York yet another reason to be troubled by the electoral process," said Bharara, who in recent weeks has indicted several city and state politicians.
But lawyers for Hou and Pan said their clients were victims of Bharara's aggressive pursuit of Liu, in an investigation that began in 2008 and included nearly a dozen wiretaps and an undercover sting. "She got caught in the middle of an obsessive quest to get John Liu," said Gerald Lefcourt, Hou's lawyer.
Liu said he was "saddened" by the verdict but gave no sign of scaling back his political ambitions. "I look forward to this year's mayoral election and will continue to ask the voters for their support," he said in a statement.
Pan, 47, a New Jersey businessman, and Hou, 26, who became Liu's campaign treasurer about two years after the federal investigation began, were both accused of scheming to have wealthy donors reimburse stand-ins -- known as "straw" donors -- whose purported contributions up to $175 would be eligible for a 6-to-1 match of public funds.
The jury convicted Pan, who was caught on tape agreeing to secretly funnel money into the campaign in 2011 from an undercover FBI agent posing as a restaurant promoter, of conspiracy and attempting to defraud the city. He faces up to 40 years in prison.
Hou -- who had minimal contact with the undercover agent but was tied to a separate scheme by several Queens businessmen to reimburse donors -- was acquitted of conspiracy but convicted of attempted fraud. She was also found guilty of lying to the FBI and hiding documents, and faces up to 45 years.
The defendants both showed no visible emotion when the verdict was read.
On tapes recorded by the undercover agent, Pan told Liu at a 2011 reception that it was "Richard's event" -- allegedly a "code" tipping off Liu that all the attendees were being reimbursed. Prosecutors said Liu knew the code, but one juror said Liu was barely discussed.
"John Liu was not a subject," said juror German Cruz of the Bronx.
Sentencing of Pan and Hou was set for Sept. 20.