Fundraiser for John Liu accused of fraud

A fundraiser for New York City Comptroller John Liu was accused Wednesday of scheming to use straw donors in a case that could tarnish the Queens Democrat's 2013 mayoral candidacy.

The charges filed in federal court in Manhattan did not name Liu, but identified defendant Xing Wu Pan, also known as Oliver Pan, as a man who raised money for "a candidate for citywide office in 2013." A person familiar with the case said the candidate was Liu.

Pan, a New Jersey businessman, allegedly arranged in August to break a $16,000 donation from an undercover FBI agent into smaller $800 pieces that would be legal under New York City's $4,950 contribution limit, and use the agent's money to reimburse 20 friends and acquaintances of Pan who would each donate $800.

He also told the undercover agent that "the candidate" -- Liu -- would be the only one who would know where all the cash was coming from, and set up a phony campaign fundraising event with some of the straw donors at which the undercover was given a private meeting with Liu, the charges said.

The agent, who taped the encounter, was introduced as a "very good friend" who had sponsored the fundraising event, the complaint said. In a "brief discussion," the candidate asked about the agent's "business background," and the agent "expressed his desire to assist the Candidate's 2013 campaign."

Liu, in a statement issued by his campaign, described Pan as simply a "supporter" and suggested he was in the dark about any scheme to raise money illegally.

"I am saddened by what I read today," Liu said. "If it is true then the conduct was clearly wrong and my campaign was not told the truth."

Liu, 44, a former city councilman who was elected comptroller in 2009, raised more than $1 million for his mayoral bid in the first half of 2011. Eight is a lucky number in Chinese lore, and Liu's campaign has promoted an $800 self-imposed limit to encourage small donations.

The complaint did not accuse the "candidate" of wrongdoing, and prosecutors declined to comment on whether Liu is the subject of any continuing investigation.

Pan, 46, is charged with conspiracy and attempted wire fraud.

Each charge carries a sentence of up to 20 years in prison. In addition to making illegal donations, he was charged with conspiring to fraudulently collect "matching funds" that the city provides candidates to leverage donations.

He was released on a $100,000 personal recognizance bond after an appearance in court Wednesday. He did not enter a plea, and his lawyer did not return a call for comment.

"Oliver Pan engaged in a deliberate and flagrant attempt to subvert the campaign finance laws and manipulate the City's matching fund system," Manhattan U.S. Attorney Preet Bharara said in a statement. " . . . Unlawful campaign conduct will not be tolerated, and we will continue to be vigilant and proactive in investigating abuses of our electoral system."