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Embattled city Comptroller John Liu is not yet out of the woods in the criminal probe of his campaign fund-raising activities, sources said yesterday.
A report published yesterday suggested that Liu would not be personally charged in the case.
Prosecutors are far from clearing Liu or shutting the door on the case — and still haven’t ruled out filing charges against him or his campaign manager, Chung Seto, at a later date, a federal law-enforcement insider told The Post.
“The investigation isn’t getting closed. It will remain active. There are still things that can be done,” the source said.
Liu’s former campaign treasurer Jia “Jenny” Hou and key fund-raiser Xing Wu “Oliver” Pan face trial next week on charges they schemed to defraud the city of matching taxpayer-contribution funds by funneling illegal donations into Liu’s campaign war chest.
As The Post reported last year, the FBI and federal prosecutors were trying to convince Pan and Hou to roll over on Liu or Seto to directly connect them to illicit campaign donations.
The feds’ theory was that Pan and Hou solicited illegal donations and hid them at the direction — or at least with the prior knowledge — of Liu or Seto, sources said.
But without documents or testimony that directly tie Liu to the donation conspiracy, the feds determined they did not have the evidence to file charges against Liu or additional people at this time, sources said.
It’s always possible that Hou or Pan could flip on Liu if they’re found guilty, but the feds rarely cut deals after trials with convicted defendants, sources said.
That’s because convicts’ assertions of innocence raise questions about credibility, as opposed to those who fess up before trial and agree to cooperate.
Liu last night said he expected that the fund-raising scandal would be used against him in a “no holds barred” campaign.
“I think my opponents will certainly bring it up,” he said. “I expect for my opponents to try to make it an issue.”
Meanwhile, prosecutors and lawyers for the defendants argued over whether the government could present former Liu press secretary Sharon Lee as a witness.
Lee has admitted she sought illegal “straw” donations from family and friends.
Additional reporting by David Seifman