Preet Bharara, the U.S. Attorney for the Southern District of New York, and Joseph M. Demarest, Jr., the Assistant Director-in-Charge of the New York Office of the FBI, announced the arrest this morning of Hassan Nemazee, the Chairman and Chief Executive Officer of Nemazee Capital Corporation, in connection with a scheme to defraud Citibank, N.A. (Citibank).
According to the complaint filed in Manhattan federal court, Nemazee engaged in a fraudulent scheme to induce Citibank to lend up to $74 million to Nemazee based on false representations that Nemazee owned millions of dollars in collateral. Nemazee submitted, and caused to be submitted to Citibank numerous documents that purported to establish the existence of accounts in Nemazee’s name at various financial institutions containing many hundreds of millions of dollars. In fact, those were fraudulent and forged documents.
ON Aug. 23, 2009, federal agents interviewed Nemazee at Newark Liberty International Airport as he was in the process of checking in for a flight to Rome. On Aug. 24, 2009, Nemazee repaid to Citibank his outstanding loan, an amount in excess of $74 million.
Nemazee, 59, currently resides in Manhattan and Katonah, N.Y. He is charged with one count of bank fraud, which carries a maximum prison term of 30 years and a maximum fine of $1,000,000 or twice the gain or loss resulting from the crime.
Vice President Joe Biden, Rep. Carolyn Maloney (D-N.Y.) and Sens. Barbara Boxer (D-Calif.), Chris Dodd (D-Conn.) and Chuck Schumer (D-N.Y.) said Tuesday evening they plan to return or donate to charity campaign contributions fromDemocratic financier Hassan Nemazee, who was arrested and charged Tuesday with trying to defraud Citibank of $74 million by offering fake collateral on a loan.
If recent history is any indication, expect more politicians to follow suit as the fallout from the latest disgraced-bundler case ripples through Washington in the coming days.
Nemazee made an impact in Democratic politics as a so-called bundler who rounded up checks from others. Since the early 1990s, when he first emerged as a prominent moneyman for the Clinton-Gore presidential campaign, Nemazee also has personally contributed more than $500,000 to dozens of primarily Democratic candidates, committees and causes, ranging from President Obama, Hillary Clinton and Rahm Emanuel to half the members of the U.S. Senate.
Among the biggest beneficiaries were the three national Democratic Party committees. Nemazee, 59, contributed $113,500 to the Democratic National Committee, $89,200 to the Democratic Senatorial Campaign Committee and $29,000 to the Democratic Congressional Campaign Committee, Federal Election Commission records show.
Nemazee, who lived in New York and primarily made his fortune in investing, also served as national finance chair for the DSCC while Schumer chaired the group during the 2006 election cycle, when the committee raised $121 million (compared to $89 million for its Republican counterpart, the National Republican Senatorial Committee) and helped Democrats take control of the Senate.
Nemazee, who contributed $8,300 to Secretary of State Hillary Clinton’s campaigns for Senate in New York and for the 2008 Democratic presidential nomination, also was a top bundler for Clinton’s presidential bid, raising at least $100,000 from other donors.
After she conceded the nomination to Obama, Nemazee helped him raise at least $500,000, in addition to contributing $9,200 of his own to a joint committee Obama set up with the DNC.
And when Obama defeated Republican John McCain in the general election, Nemazee contributed another $50,000 to thenon-profit corporation Obama set up to pay for his inauguration and the surrounding festivities.