Liu's Campaign Treasurer Arrested on Fraud Charges The campaign treasurer for City Comptroller John C. Liu was arrested on Tuesday as a part of a widening investigation into Mr. Liu's fund-raising practices. The treasurer, Jia Hou, faces charges of fraud and obstruction of justice for what federal prosecutors say was her role in funneling illegal campaign money to Mr. Liu by using straw, or phony, donors. Ms. Hou's arrest was the first time that a member of Mr. Liu's inner circle had been implicated in the case. Ms. Hou has worked for Mr. Liu since 2010 and her father is a prominent and longtime supporter of Mr. Liu. According to the complaint filed by Preet Bharara, United States attorney for Manhattan, Ms. Hou, together with an unknown number of co-conspirators, helped direct at least 40 fraudulent donations to Mr. Liu's campaign. That money positioned Mr. Liu to receive public matching funds from the city under New York's generous campaign financing program. The same scheme was described when authorities arrested Xing Wu Pan, a fund-raiser for Mr. Liu, and accused him of helping an undercover agent from the Federal Bureau of Investigation, who was posing as a businessman, to circumvent campaign contribution limits. Mr. Pan was arrested in November and charged with conspiracy to commit wire fraud and attempted wire fraud. Ms. Hou, 25, was charged with the two fraud counts. But she was also charged with obstruction of justice, suggesting that the campaign had not fully cooperated with investigators. Ms. Hou was arrested by F.B.I. agents on Tuesday morning in Queens, and was expected to appear in federal court later in the day. In a statement, Mr. Bharara called Ms. Hou "a central figure in a coordinated scheme to break the city's campaign finance laws." He said those laws "are not optional." Her lawyer, Martin B. Adelman, said he had not yet seen the complaint, but indicated that she would vigorously contest the charges. "She is a wonderful young woman, an idealist," he said. The arrest is the latest political blow for Mr. Liu, a popular Democrat from Flushing, Queens, who has been struggling to respond to questions raised by The New York Times in October about the legitimacy of contributions to his campaign and whether some of the donors had been reimbursed for their contributions. In Mr. Pan's case, the complaint refers in several instances to two of Mr. Liu's campaign aides who were in attendance at an Aug. 17 fund-raiser where the undercover F.B.I. agent met Mr. Liu. One aide was Ms. Hou; the other has not been identified. Janice K. Fedarcyk, the director of the New York office of the F.B.I., said the intent of the city's campaign finance laws was "in part to limit the influence of wealthy contributors on political campaigns." "In a very real sense," she said, "Hou is accused of undermining the democratic process."