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Trial for John Liu's former aides begins in NYC

Xing Wu Pan, aka Oliver Pan, a former

Xing Wu Pan, aka Oliver Pan, a former fundraiser for NYC Comptroller John Liu, leaves Manhattan Federal Court. (Nov. 12, 2102)

Prosecutors accused a fundraiser and a former treasurer for New York City Comptroller John Liu of "corrupt" campaign finance practices as a trial that could damage Liu's bid for the Democratic mayoral nomination began Tuesday in federal court in Manhattan.

"This case is about how these two defendants, Oliver Pan and Jenny Hou, tried to corrupt an election here in New York City," Assistant U.S. Attorney Brian Jacobs told jurors. "It's about how they conspired to hide the true sources of campaign contributions and to obtain thousands of dollars in improper matching funds."

Xing Wu "Oliver" Pan, 47, who raised money for Liu, and ex-treasurer Jia "Jenny" Hou, 26, are charged with recruiting so-called "straw donors" who would be secretly reimbursed after being listed as contributors so the Liu campaign could exploit a city program matching 6-to-1 amounts up to $175 from each new city donor.

An undercover FBI agent, posing as an out-of-town restaurant promoter named "Richard" who was looking for help from a local politician, arranged with Pan to give $16,000 in a series of $800 donations through straws that Pan recruited, Jacobs said, and to sponsor a 2011 event that Hou helped set up and Liu attended.

Both defendants are charged with wire fraud for allegedly conspiring and attempting to illegally obtain city matching funds. Hou is also charged with obstruction of justice for allegedly failing to produce complete records when she was subpoenaed.

Lawyers for Pan and Hou said the two barely knew each other and were thrown together in an overreaching FBI effort to implicate Liu in corruption. Both lawyers also indicated they may lean on a technical issue. The alleged plot was to steal city matching funds, but only half of the straw donors Pan recruited were city residents eligible for the match.

Irwin Rochman, the lawyer for New Jersey businessman Pan, said his client recruited straw donors, but told the jury that he lacked criminal intent because he did not do it for the purpose of stealing city matching funds.

"It was a result of the extensive involvement and inducements of the government agent," Rochman added, "and but for that extensive involvement and inducement Mr. Pan would never have agreed to create these straw donor contributions."

Hou's lawyer, Gerald Lefcourt, said his client had no experience in campaign finance when she was named Liu's treasurer in late 2010. Prosecutors contend Pan used a "code" for straw donors when he told her at the 2011 fundraiser "This is Richard's event," but Lefcourt said she had no idea what was going on.

"There will be no evidence that she ever talked to the undercover before the event," Lefcourt said. "It had nothing to do with Jenny Hou. They thought that through Oliver Pan they could get to John Liu . . . She is there to sit at a table, make nametags, collect checks, collect forms and arrange to have pictures taken with the candidate."

The trial will resume Thursday, when the undercover FBI agent is expected to testify.


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