Hassan Nemazee, right
BY DAVID GLOVIN
Hassan Nemazee, a top fundraiser for President Barack Obama and Hillary Clinton who was arrested last month for defrauding banks, was indicted by a grand jury for stealing $292 million from Citigroup Inc., HSBC Holdings Plc and Bank of America Corp.
Prosecutors last month claimed Nemazee stole $75 million from Citigroup. The indictment adds Bank of America and HSBC to the case, expands the duration of the alleged fraud, and almost quadruples the amount that Nemazee, 59, is accused of stealing.
From 1998 to 2009, Nemazee “obtained hundreds of millions of dollars worth of loans from BofA, Citibank, and HSBC,” U.S. Attorney Preet Bharara in Manhattan said in a statement yesterday announcing the indictment. “Documents and signatures that Nemazee used to obtain these loans, including documents he submitted to purportedly show that he had hundreds of millions of dollars worth of collateral, were fake.”
Nemazee, the chairman of Nemazee Capital Corp., is under house arrest in his $20 million Manhattan apartment on a $25 million bond. He hasn’t entered a formal response to the criminal charges. His lawyer, Paul Shechtman, didn’t return a call seeking comment yesterday.
The financier was one of the leading fundraisers for the Democratic Party. In the 2008 presidential campaign, Nemazee raised at least $100,000 for Clinton, according to the Washington watchdog group Public Citizen. Nemazee brought in at least $500,000 for Obama after he defeated Clinton in the primary campaign, according to Public Citizen. Clinton is now secretary of state.
Nemazee also raised money for Massachusetts Democratic Senator John Kerry during his 2004 run for the presidency as well as for Senate Democrats.
The indictment adds what prosecutors may say was Nemazee’s motive for his alleged fraud. It says he used proceeds of his scheme to make donations to candidates, political action committees and charities, to buy real estate in Italy, and to make monthly maintenance payments on properties in Manhattan and Katonah, New York.
As of August, Nemazee owed about $142 million to Charlotte, North Carolina-based Bank of America and about $75 million to Citibank, a unit of New York-based Citigroup Inc.
Nemazee made partial payments to one bank with loans he fraudulently obtained from other banks, according to the indictment. He repaid money owed to Bank of America with funds he got from Citibank, and he drew down on a line of credit from London-based HSBC to repay Citibank, prosecutors said.
Nemazee is accused of providing banks with fake account statements, forging signatures on documents, and claiming that “virtual offices” he created were associated with broker- dealers where he said he held collateral.
The indictment also seeks to force Nemazee to forfeit $292 million, as well as his interest in five pieces of real estate, 16 corporate entities and one hedge fund, 14 securities accounts, 32 bank accounts, a 2008 Maserati Quattroporte, and a 2007 Cessna airplane.
Nemazee is charged with three counts of bank fraud, each of which carries a maximum potential prison term of 30 years. He’s also accused of aggravated identity theft.
Another prominent fundraiser for Democrats, Norman Hsu, was convicted by a federal jury in May of campaign finance fraud for making tens of thousands of dollars in illegal donations. He also pleaded guilty to cheating investors of more than $20 million in a Ponzi scheme. He is awaiting sentencing.
The case is U.S. v. Nemazee, 09-mj-01927, U.S. District Court, Southern District of New York (Manhattan).
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