Feds: John Liu's treasurer charged in fraud

The campaign treasurer for New York City Comptroller John Liu's prospective 2013 mayoral campaign was charged Tuesday with a conspiracy to use straw donors to fraudulently collect city matching funds and obstruction of justice.

The federal complaint identified Jia "Jenny" Hou as treasurer for "a candidate for citywide elective office in 2013." New York City Campaign Finance Board records identified Jia Hou as treasurer for Liu, and officials confirmed he was the candidate.

Hou, 25, of Queens, was released after appearing in federal court in Manhattan. She did not enter a plea. Liu, in a statement, said, "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."

The new accusations echo charges filed last year against Xing Wu "Oliver" Pan, a prominent Liu fundraiser from New Jersey who allegedly arranged to reimburse straw donors for small contributions to evade the city's $4,950 contribution limit. Pan pleaded not guilty, and those charges are pending.

According to the complaint filed Tuesday, Hou on more than 40 occasions arranged for large donations to be broken up and given as smaller contributions in the names of phony "straw" donors to avoid the $4,950 limit and to maximize the campaign's benefit under a city program that provides a 6-to-1 match for the first $175 donated by an individual.

The government said, among other evidence, the FBI obtained instant messages from Hou discussing the scheme, recruiting and agreeing to compensate a straw donor and instructing campaign volunteers to forge signatures on donation cards to disguise the use of straw donors.

"Auditors look very carefully at the handwriting," she allegedly wrote in one message. " . . . Just make sure the handwriting looks as close to the donors as possible."

The complaint tied Hou to a fundraising event at which Pan has been accused of using straw donors to funnel a donation from an undercover FBI agent to Liu, and alleged that Hou failed to disclose in official filings so-called "bundlers" -- large fundraisers such as Pan -- who were connected to the scheme.

Prosecutors also charged that Hou impeded the government investigation by failing to produce subpoenaed records, including incriminating messages.

The government said Liu's 2013 campaign has raised more than $2 million since 2009, but did not allege how much has been raised illegally. Hou was charged with a conspiracy to commit wire fraud that began in 2009, attempted wire fraud and obstruction of justice. She faces up to 20 years in jail on each count.

"In a very real sense, Hou is accused of undermining the democratic process," said Janice Fedarcyk, the agent in charge of the New York FBI office, in a statement.