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 immediately 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.

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

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