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Democratic fundraiser surrenders on theft charge

  • Story Highlights
  • Norman Hsu held on grand theft charge from 1991, accused of bilking investors
  • Official says Hsu pleaded no contest but never showed up for sentencing
  • Hsu is top contributor to candidates including Hillary Clinton, Barack Obama
  • Hsu says he didn't know about outstanding warrant, has been living a public life
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REDWOOD CITY, California (CNN) -- Embattled Democratic fundraiser Norman Hsu turned himself in to authorities on Friday on a 16-year-old grand theft charge, according to a San Mateo County, California, Superior Court spokeswoman.

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Hillary Clinton's campaign says it's not keeping contributions from fundraiser Norman Hsu.

Hsu was being held on $2 million bond at the Maguire Correctional Facility in Redwood City, the San Mateo County seat.

A bail reduction hearing has been scheduled for Wednesday.

Hsu had been a top contributor to Democrats, including presidential candidates Hillary Rodham Clinton and Barack Obama.

But their campaigns and others said they have returned or given to charity donations from Hsu, who had an open bench warrant for his arrest in California.

Hsu came under scrutiny after news reports questioned his fundraising and revealed he has a criminal record.

Ronald Smetana, in California's office of the attorney general, said Hsu pleaded no contest in 1991 to a charge of grand theft, but never showed up for sentencing. Video Watch why Hsu could be a big embarrassment to Clinton campaign »

Smetana said Hsu was accused of bilking investors of $1 million and could have been sentenced to up to three years in prison and ordered to pay restitution.

Other Democratic candidates announced they too are purging their campaigns of Hsu's contributions. They include comedian Al Franken, a U.S. Senate candidate in Minnesota; U.S. Rep. Michael Honda of California; and U.S. Rep. Joe Sestak of Pennsylvania.

In a written statement, Hsu said Wednesday he was "surprised to learn that there appears to be an outstanding warrant -- as demonstrated by the fact that I have and do live a public life."

He added, "I have not sought to evade any obligations and certainly not the law."

"Obviously, we were all surprised by this news," Clinton said during a news conference Thursday with Gov. Eliot Spitzer, whose campaign confirmed that he too returned donations from Hsu.

"When you have as many contributors as I'm fortunate enough to have, we do the very best job we can, based on the information available to us, to make appropriate vetting decisions, and this one was a big surprise to everybody," she said.

The Wall Street Journal reported Thursday that six members of the family of a San Francisco mail carrier, William Paws, have donated a total of $45,000 to Clinton since 2005, and that the donations match Hsu's.

The donations were listed on the Federal Exchange Commission's Web site and on www.opensecrets.org.

An online directory of addresses lists Hsu at the same address as the mail carrier.

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On Tuesday, Hsu's attorney disputed any suggestion that his client had improperly directed contributions.

A spokesman for Obama said his campaign had given $7,000 in contributions from Hsu to charity and sent a letter asking the Paws family to affirm that their contributions were from their own funds and not those of others. E-mail to a friend E-mail to a friend

CNN's Paul Steinhauser, Martina Stewart, Dugald McConnell and Brian Todd contributed to this report.

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