A prosecutor charged that city Comptroller John Liu must have known that his campaign was raising money through a straw donor scheme in closing arguments at the federal corruption trial of two aides Tuesday.
Prosecutor Justin Anderson's claim that defendant Xing Wu "Oliver" Pan lied by telling the FBI that Liu might not have known that all the donors at an August 2011 fundraiser were being reimbursed by a wealthy donor was the closest the United States has come to saying Liu was culpable.
"It would defeat the whole purpose of a straw donor's scheme if the candidate didn't know where the money is coming from," Anderson said during his three-hour summation. "That's the whole point of these people funneling large donations into the campaign. It's to get credit."
Former Liu fundraiser Pan, 47, a New Jersey businessman, and former Liu treasurer Jia "Jenny" Hou, 26, are charged with being part of a campaign conspiracy to use stand-ins for rich donors to illegally get matching funds from New York City. Hou is also charged with lying and obstructing justice.
Liu himself was one of the targets of an FBI investigation that began in 2009. He has never been charged, but the trial has cast a shadow over his current campaign for mayor. His lawyer Paul Shechtman reacted sharply to the closing argument.
"There was not a shred of evidence at the trial or in the last three years that John Liu knew about any wrongdoing . . .," Shechtman said. "When a prosecutor says someone 'had to know' it usually means they have no proof that he did know."
The allegation about Liu centered on an undercover FBI agent who posed as a Texas restaurant promoter named "Richard Kong," and persuaded Pan to let him funnel $16,000 to Liu by reimbursing straw donors at an August 2011 event. Pan promised to let Liu and Hou know whose money it was by telling them "this is Richard's event."
After his arrest, however, Pan told the FBI that he wasn't sure his "code" was understood. Anderson called that "not true" and said the absence of any Texas donors was a "red flag." But defense lawyers say the "code" could have meant only that "Kong" recruited donors, not necessarily that he reimbursed them.
In addition to the FBI event, Anderson cited circumstantial evidence that Hou was aware that straw donors were reimbursed by two businessmen in Queens for a May 9, 2011, fundraiser, and an email in which she offered to reimburse an ex-boyfriend.
Summations continue Wednesday.