NEW YORK (Reuters) - The campaign treasurer for the New York City comptroller on Tuesday was charged with fraud for violating contribution limits and also charged with obstructing the government's investigation of the suspected fraud, the Manhattan U.S. Attorney said.
Jia Hou, known as Jenny Hou, "is accused of participating in a scheme that used 'straw donors' to funnel to the campaign large, illegal contributions that were well above the individual limit authorized by the New York City Campaign Finance Board," according to a statement by U.S. Attorney Preet Bharara and Janice Fedarcyk, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation.
Hou is the second person charged in the scheme the prosecutors say they uncovered. The charges have made it more difficult for Comptroller John Liu to win the Democratic nomination for mayor to replace Mayor Michael Bloomberg in 2013, political analysts say.
New York City's comptroller oversees the city's finances with audits and helps run the pension fund. Liu's difficulties in managing his campaign donations have prompted questions about his financial oversight of the city, according to political analysts.
A spokesman for Liu had no immediate comment. Nor did a lawyer for Xing Wu Pan, known as Oliver Pan, who was indicted on February 15 on federal conspiracy and wire fraud charges for evading campaign finance rules. Liu has previously confirmed that Pan was one of his supporters.
Liu, who was born in Taiwan, has tapped New York City's Chinese-American community for campaign donors. The list of his Democratic rivals includes his predecessor, William Thompson, City Council Speaker Christine Quinn, Public Advocate Bill de Blasio and Manhattan Borough President Scott Stringer.
Using straw donors helped Hou and Pan qualify the comptroller's campaign for more matching funds from the city, the federal investigators said.
Hou, who was arrested on Tuesday, took part in "at least 40 fraudulent donations designed to funnel city matching funds to (the) campaign," the federal prosecutors said.
(Reporting by Joan Gralla; Editing by James Dalgleish)