Dec. 4 (Bloomberg) -- Former Democratic fundraiser Norman Hsu, charged in September with cheating investors in a $60 million ``Ponzi'' scheme, was formally indicted by a federal grand jury on similar allegations, U.S. prosecutors said.

The 15-count indictment unsealed today in New York charges Hsu with wire fraud, mail fraud and violating election laws, alleging he recruited investors by promising high returns on short-term investments. He used money from new victims to pay older ones and pressured investors to contribute to political candidates he favored, U.S. Attorney Michael Garcia said.

``Victims often agreed to roll over their invested funds into new investments with Hsu,'' Garcia said in a statement. ``In the end, after making some payments intended to perpetuate the scheme, Hsu swindled his victims.''

Victims lost at least $20 million after investing more than $60 million with Hsu, Garcia said. Hsu's lawyer, James Brosnahan, didn't return a call seeking comment.

Hsu, 56, faces as much as 20 years in prison on the most serious counts. He is being held on separate charges stemming from a 1991 prosecution in which he entered a no-contest plea to charges he stole $1 million from 20 investors in a scheme to buy and resell nonexistent latex gloves.

Fugitive

Hsu failed to appear for sentencing and spent more than 15 years as a fugitive. He later became a Democratic fundraiser and contributor, giving hundreds of thousands of dollars to candidates and party committees, including U.S. Senator Hillary Clinton, a Democrat from New York and U.S. presidential candidate, according to the Center for Responsive Politics, a Washington-based research group.

A defendant who enters a no contest plea doesn't admit or deny wrongdoing while remaining subject to sentencing. Such a plea can't be used against him in related civil litigation. Hsu's indictment was filed in Manhattan federal court.

The case is U.S. v. Hsu, 07-cv-1066, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: David Glovin in New York federal court at dglovin@bloomberg.net.

Last Updated: December 4, 2007 17:00 EST