Jury indicts Democrat fundraiser
September 23, 2009
By David Glovin New York
Hassan Nemazee, a top fundraiser for US President Barack Obama and Secretary of State Hillary Clinton, has been indicted by a grand jury for stealing $292 million (R2.1 billion) from Citigroup, HSBC Holdings and Bank of America.
Nemazee was arrested last month after prosecutors said he stole $75m 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 is accused of stealing.
From 1998 to this year, he "obtained hundreds of millions of dollars worth of loans from Citibank, HSBC and Bank of America", US attorney Preet Bharara said on Monday, announcing the indictment.
Bharara added: "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, is under house arrest in his $20m Manhattan apartment on a $25m bond. He has not entered a formal response to the criminal charges. His lawyer, Paul Shechtman, was not available for comment.
The financier was one of the leading fundraisers for the Democratic Party. During last year's presidential campaign, he 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 Democratic primary campaign.
The indictment adds what prosecutors may say was his 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 property in Italy, and to make monthly maintenance payments on properties in Manhattan and Katonah.
Last month Nemazee owed about $142m to Bank of America and about $75m to Citibank, a unit of Citigroup.
He 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 HSBC to repay Citibank, prosecutors said.
Nemazee is accused of providing banks with fake account statements and forging signatures on documents.
The indictment also seeks to force him to forfeit $292m, as well as his interest in five pieces of property, 16 corporate entities and one hedge fund, 14 securities accounts, 32 bank accounts, a Maserati sportscar and a Cessna airplane.
He is charged with three counts of bank fraud, each of which carries a maximum potential prison term of 30 years. He is also accused of aggravated identity theft.
Another fundraiser for the Democrats, Norman Hsu, was convicted in May of campaign finance fraud. He also pleaded guilty to cheating investors of more than $20m in a Ponzi scheme. - Bloomberg
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