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John Liu Fund Raiser Arrested for Campaign Fraud

By DNAinfo Staff on November 16, 2011 2:20pm  | Updated on November 16, 2011 4:59pm

A man who reportedly is a fundraiser for comptroller John Liu was arrested for campaign fraud on Nov. 16, 2011.
A man who reportedly is a fundraiser for comptroller John Liu was arrested for campaign fraud on Nov. 16, 2011.
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Hiroko Masuike/Getty Images

By Ben Fractenberg and Jill Colvin

DNAinfo Staff

MANHATTAN — A fundraiser who allegedly funneled $16,000 in illegal campaign contributions into John Liu's mayoral campaign war chest was arrested by federal authorities Wednesday.

Xing Wu Pan, 46, of New Jersey, was arrested on charges he set up "straw donors" to funnel a large, illegal campaign contribution exceeding the individual limit to an unnamed candidate, according to the Manhattan U.S. Attorney's Office.

The attorney's office declined to say which candidate Wu Pan was raising funds for. But a law enforcement source said Liu is the candidate in question.

According to the complaint unsealed Wednesday, the New Jersey man was approached in August by an undercover FBI agent posing as a businessman, who offered to contribute $16,000 to Liu's campaign.

To circumvent the city's $4,950 cap on individual gives, Pan allegedly gathered 20 straw donors to make contributions in their own names with money provided by the agent — a blatant violation of finance law.

Pan allegedly went as far as to fill out campaign contribution forms on behalf of each straw donor, which included signatures at the bottom pledging the donations were not being reimbursed.

Pan was even recorded describing to the undercover agent exactly how his alleged scheme worked.

“Yeah, usually, I have, I have…five people, they fill out the form, and they use, they use their own credit card or check, then, and then we give them the cash," he allegedly said.

The agent also obtained video footage that allegedly showed one of the straw donors filling out a campaign contribution form with Pan's assistance. The agent also allegedly observed Pan handing another straw donor cash.

Pan's campaign misdealings were traced back as far as 2009, when he also worked as a bundler for Liu.

According to campaign finance records, Pan made six separate donation's to Liu's campaign in 2009, totaling nearly $3,000.

Liu's campaign acknowledged that Pan was indeed a supporter of his and denied knowledge of the alleged wrongdoing.

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

A spokeswoman did not immediately respond to questions about how much Pan contributed to the campaign or steps being taken to prevent fraud. Security at Liu's downtown office said he was not speaking to reporters.

Liu has raised more than $1 million for a mayoral run in 2013, but his campaign has been fraught will allegations of inconsistencies.

The New York Times first reported irregularities last month including questions about the legitimacy of some donations, including suspicions that some listed donors might not even exist.

Both the U.S. Attorney's Office and the FBI declined to comment on whether there might be additional charges stemming from the investigation into Liu's finances or whether any of his staffers might be involved.

Liu is not accused of wrongdoing in Wednesday's complaint.

In addition evading contribution limits, Pan is also accused of inflating the amount of money given to the campaign by individuals in order to increase the amount of matching funds from the city's campaign finance board.

Manhattan US. Attorney Preet Bharara described the alleged action as a "deliberate and flagrant attempt to subvert the campaign finance laws and manipulate the City’s matching fund system."

“Corruption in campaign finance corrupts the entire political process, and it can call into question the legitimacy of our elections," he said in a statement.

FBI Assistant Director-in-Charge Janice Fedarcyk also slammed the allegations as "an assault on the integrity of the electoral process.”

Pan is being charged with one count of conspiracy to commit wire fraud and one count of attempting to commit wire fraud, each of which carries a maximum sentence of twenty years in prison.

Pan is expected to be arraigned in Manhattan federal court Wednesday.