John Liu Campaign Treasurer, Jenny Hou, Arrested For Fraud In Fundraising Scandal

Embattled comptroller John Liu received another blow in his ongoing fundraising scandal with Tuesday's arrest of his campaign treasurer Jia "Jenny" Hou.

25-year old Hou of Queens is being accused of willfully participating in a campaigning scheme involving "straw donors" in order to make illegal contributions above the $4,950 limit authorized by the New York City Campaign Finance Board.

Hou's arrest is the second individual within Liu's circle to be charged, following fundraiser Oliver Pan, who was arrested in November. Furthermore, the charges continue to cast a dark shadow on Liu's ambitions for the upcoming 2013 mayoral race.

In January, Mayor Bloomberg suggested that Liu's scandal was too damaged by the allegations and said, "You never know, 'cause things change. Who would have thought John Liu being out of it? I assume he is."

In November, federal authorities launched a large-scale investigation of Liu's campaign funds, after a report published by The New York Times canvassed more than 100 homes to uncover nearly two dozen irregularities in Liu's reported donations.

Hou is also being charged with obstruction of justice by failing to provide documents she knew contained pertinent information sought out by investigators. The official complaint states:

Hou failed to disclose the identities of the intermediaries, including those responsible for arranging for the contributions of these straw donors, despite City regulations that required such disclosures...Hou also impeded the Government's investigation of this matter by not producing subpoenaed records in an apparent attempt to evade detection.

Specific instant messages between Hou and an individual are also being called into question involving reimbursement for an illegal donation that did not meet campaign financing requirements.

Manhattan US Attorney Preet Bharara spoke of Hou's arrest, "New York’s campaign finance laws are not optional....As today’s charges demonstrate, unlawful campaign conduct will not be tolerated."

Liu's position as city comptroller designates him as the top ranking financial official, as he oversees a $66 billion budget and $120 billion pension fund.