Legal News

Nemazee Indictment: Robbed from Banks to Give to the Dems

By Ashby Jones

Last month, when charges were filed against New York businessman Hassan Nemazee, we called him the white-collar defendant of the fall. So forgive us for feeling a little prescient when, upon opening the papers this morning — the first day of fall — we read word of an indictment against Namazee getting unveiled.

Nemazee has been accused of defrauding banks of $292 million, partly to benefit the Democratic Party. Click here for the WSJ story, from Amir Efrati, here for an earlier LB post on the Nemezee situation.

According to the indictment, Nemazee, 59 years old, used the proceeds of his scheme to donate to campaigns and political-action committees, though the amount allegedly spent on these efforts wasn’t specified. The donations helped him rise to become finance chairman of the Democratic Senatorial Campaign Committee, among other major roles.

A spokesman for the Democratic National Committee said the DNC, Obama for America, and the Presidential Inaugural Committee, which organized President Barack Obama’s inaugural festivities, would donate to charity $61,700 of contributions Nemazee made during the 2008-09 election cycle.

Nemazee allegedly used fake documents showing hundreds of millions of dollars worth of collateral to defraud three major banks since 1998, the indictment states. In August he owed $142 million to Bank of America and about $75 million to Citibank. After federal authorities confronted him about the alleged Citibank fraud before his arrest last month, he repaid the Citibank loan using loans from HSBC Bank, which he also obtained by lying about his finances, the indictment states.

“For more than ten years, Hassan Nemazee projected the illusion of wealth, stealing more than $290 million so that he could lead a lavish lifestyle and play the part of heavyweight political fundraiser,” Preet Bharara, the new U.S. attorney in Manhattan, said in a statement

Nemazee, who is expected to be arraigned this week in Manhattan, was charged with three counts of bank fraud and one count of aggravated identity theft. Each bank-fraud charge carries a maximum prison term of 30 years, and the identity-theft charge carries a mandatory term of two years. Nemazee’s lawyer didn’t return a call requesting comment.

Full post as published by Law Blog - WSJ.com on September 22, 2009 (boomark / email).