Beware the Con Men

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Be sure to check up on the backgrounds of people before you invest your life savings with them…
“Mr. Hsu, according to several accounts as well as records, built trust by establishing a perception of himself as a successful businessman. He was known for dressing well, was occasionally quoted in trade magazines, and had a long list of businesses registered under his name. He had impeccable educational credentials…

Mr. Woo met Mr. Hsu in the early 1970s when both were at Berkeley, and invested in a clothing company Mr. Hsu was starting with another Berkeley graduate. That third person had returned to Hong Kong and was to supply men’s casual wear for Mr. Hsu to distribute in the U.S.

Mr. Woo lost at least $50,000, according to his account and Mr. Hsu’s bankruptcy documents. “He abused my trust, and I was very angry,” Mr. Woo says. “But I could not find him. He was moving around.”
Mr. Hsu developed a long trail of addresses, in some cases mystifying longtime occupants of the locations. One address currently linked to him is 5586 Bandini Blvd. in Bell, Calif., near Los Angeles. It is occupied by Blusound Electronics. “I have no idea who he is,” said Mansour Parvizi, a Blusound official. “We get mail for him all the time, mainly from bill collectors.”

As his businesses unraveled, Mr. Hsu began raising money in the late 1980s for a new venture that he said would buy and resell latex gloves, and eventually other apparel. He raised about $1 million from more than a dozen investors. This time, he met many of the investors through a business acquaintance named August Wu, a restaurateur who said Mr. Hsu had gained his trust as a partner in several deals.

“He was a very warm, caring person,” Mr. Wu says. “He acted like a very good friend.”

According to court transcripts, some investors gave their life savings over to Mr. Hsu, while others refinanced their homes to borrow money to invest. “He had a reputation as being a very successful business person,” said one of the investors, Alvin Chau, an Oakland, Calif., accountant.

Adding to the trust, Mr. Hsu repaid some early investors, building up a sense among future investors that they, too, would profit, according to court documents. “It was a classic pyramid scheme,” says Ronald Smetana, the deputy attorney general in California who handled the case in 1991.”

What Made Norman Hsu Run?

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