Hassan Nemazee

Democratic fundraiser Hassan Nemazee on Thursday pleaded guilty to defrauding three banks of more than $290 million, according to a news release from the U.S. Attorney’s office in the Southern District of New York. SDNY Assistant U.S. Attorneys Daniel W. Levy and Michael D. Lockard are charge of the prosecution.

Nemazee, the national finance co-chairman of Hillary Clinton’s 2008 presidential campaign, used loan proceeds from one bank to pay off another over an 11-year period from 1998 to 2009. Nemazee misrepresented to the banks how much he owned in collateral and used fake documents and forged signatures to obtain the loans, prosecutors said.

The banks defrauded in the scheme include Bank of America, Citibank and HSBC Bank USA. Nemazee was charged with aggravated identity theft and three counts of bank fraud, each of which carry a sentence of up to 30 years in prison and a maximum fine of $1 million or twice the gain or loss resulting from the crime.

Nemazee entered his guilty plea before U.S. District Judge Sidney H. Stein. As part of his guilty plea, Nemazee agreed to forfeit his interest in various real properties, corporate entities, hedge funds, securities accounts, bank accounts, a 2008 Maserati Quattroporte and a 2007 Cessna aircraft.

He is scheduled to be sentenced by Stein on June 30.

Nemazee’s brother-in-law, Shahin Kashanchi, is separately charged with aiding and abetting Nemazee’s fraud scheme.

“Working with our partners at the FBI to investigate and end schemes like Nemazee’s is central to this office’s mission of aggressively policing white-collar crime,” SDNY U.S. Attorney Preet Bharara said.

Hassan Nemazee

An attorney for Democratic fundraiser Hassan Nemazee on Wednesday said his client is in discussions about resolving charges he tried to defraud three banks of more than $290 million, Dow Jones Newswires reports.

Nemazee, the national finance co-chairman of Hillary Clinton’s 2008 presidential campaign, is accused of using loan proceeds from one bank to pay off another over an 11-year period, from 1998 to 2009. The banks he allegedly defrauded in the Ponzi scheme are Bank of America, Citibank and HSBC Bank USA, according to the U.S. Attorney’s office in the Southern District of New York. He has been indicted on charges of aggravated identity theft and three counts of bank fraud, each of which carry a sentence of up to 30 years in prison.

Following a Wednesday hearing, Nemazee’s attorney Paul Shechtman told Dow Jones the parties are discussing a possible disposition in the case by late December. Schechtman wasn’t more specific. A disposition could include Nemazee pleading guilty to criminal charges or SDNY dropping the case. The case is being prosecuted by Assistant U.S. Attorneys John M. Hillebrecht and Daniel W. Levy.

The hearing is set for Dec. 21.

A former Justice Department employee helped the government track down one of his Facebook friends last month, The Associated Press reported. Assistant U.S. Attorney Michael Scoville in Seattle sought out the unidentified former DOJ employee, after noticing he was a Facebook friend of fugitive Maxi Sopo, who was wanted on bank fraud charges, The AP reported. Sopo was traced to Cancun.

Scoville told The AP:

“He was making posts about how beautiful life is and how he was having a good time with his buddies … He was definitely not living the way we wanted him to be living, given the charges he was facing.”

The former DOJ official became Facebook friends with Sopo after meeting him in Cancun’s nightclubs a few times, but did not know him well or that he was a fugitive until he was contacted by a Secret Service agent who noticed his affiliation with the DOJ, The AP said.

While Sopo’s Facebook account is still active, he has updated his privacy settings so that his friends list is no longer publicly available. The former DOJ employee declined interview requests from The Guardian, citing privacy concerns.

The DOJ recently expanded its online presence and added its own Facebook page.

Hassan Nemazee

The brother-in-law of prominent Democratic fundraiser Hassan Nemazee has been charged as an accomplice in an alleged scheme to defraud three banks of more than $290 million, according to a Southern District of New York news release.

Nemazee, the national finance co-chairman of Hillary Clinton’s 2008 presidential campaign, is accused of using loan proceeds from one bank to pay off another over an 11-year period, from 1998 to 2009. The banks he allegedly defrauded in the Ponzi scheme are Bank of America, Citibank and HSBC Bank USA, according to SDNY .

According to the complaint filed in Manhattan federal court and other documents, Shahin Kashanchi fabricated  documents submitted by Nemazee to obtain the fraudulent loans.”Kashanchi would simply create phony account statements designed to look like real account statements, but bearing account numbers for accounts that did not exist and reflecting balances that purported to establish Nemazee’s great wealth,” the SDNY news release said.

Kashanchi also allegedly created counterfeit statements indicating Nemazee held more than $125 million in U.S. Treasury securities. According to the complaint, Kashanchi also falsified documents from Pershing LLC to help Nemazee obtain the loans.

Kashanchi, who resides in Telluride, Colo.,  is charged with two counts of bank fraud. Each charge carries a maximum prison term of 30 years and a maximum fine of $1 million, or twice the gain or loss resulting from the crime.

The case is being prosecuted by Assistant U.S. Attorneys John M. Hillebrecht and Daniel W. Levy.

Hassan Nemazee

Democratic fundraiser Hassan Nemazee was released from jail Wednesday after being charged with one count of bank fraud, The Associated Press reported. The New York financier agreed to a $25 million bail package that requires him to pledge two of his properties as collateral within a week. Nemazee, who was the finance chairman of Hillary Clinton’s 2008 presidential campaign, will remain under house arrest in his $20 million Manhattan apartment and wear a monitoring bracelet, according to reports. He also is barred from using computers or the Internet or getting new cell phones or bank loans.

On Sunday, FBI agents stopped Nemazee at Newark International Airport as he tried to board a flight to Rome and asked to interview him. The following day, he repaid a $74 million Citibank loan. On Tuesday he was arrested and charged with one count of bank fraud. Prosecutors said he used “fraudulent and forged” documents to get the loan. Nemazee is chairman and chief executive of Manhattan-based Nemazee Capital Corp.

From the New York FBI news release:

Furthermore, on many of the documents at issue, Nemazee falsely provided as the address and telephone numbers of various financial institutions purportedly vouching for his financial strength an address and telephone number that was, in fact, controlled by Nemazee. As a result, in the event anyone at Citibank made an effort to confirm the existence of the assets reflected on the fraudulent documents submitted by Nemazee, they would in fact be contacting a telephone number assigned to Nemazee himself, and not any financial institution.

Assistant U.S. Attorneys John M. Hillebrecht and Daniel W. Levy are prosecuting the case.

Nemazee’s attorney, Marc Mukasey — a former prosecutor who is the son of ex-Attorney General Michael Mukasey — called the bail terms “Draconian” and “staggering.” Hillebrecht argued Nemazee is a flight risk. The prosecutor said releasing Nemazee without an electronic bracelet “would be a huge mistake,” The AP reported.

The national finance chairman for Hillary Clinton’s 2008 presidential campaign was arrested Tuesday in New York on charges he fradulently induced Citibank N.A. to lend him up to $74 million, the Justice Department announced today.

Hassan Nemazee, 59, was stopped at Newark International Airport Sunday night as he tried to board a flight to Rome, Reuters reported. On Monday the long-time Democratic donor repaid a $74 million bank loan, Reuters said. On Tuesday he was charged with one count of bank fraud. Nemazee was nominated during the Clinton administration as ambassador to Argentina. After Hillary Clinton’s defeat in last year’s Democratic presidential primary, the New York financier donated $50,000 to Democratic party arms supporting Barack Obama’s election. He also worked to raise money for Obama and to pay off Clinton’s multi-million-dollar campaign debt.

Nemazee’s lawyer is Marc Mukasey, a former prosecutor who is the son of ex-Attorney General Michael Mukasey.

Assistant U.S. Attorneys John M. Hillebrecht and Daniel W. Levy are prosecuting the case.

Read Nemazee’s Wikipedia profile here.

Here is the news release from the Southern District of New York:

.

United States Attorney Preet Bharara

Southern District of New York

________________________________________________________________________

FOR IMMEDIATE RELEASE                        CONTACT: YUSILL SCRIBNER

TUESDAY, AUGUST 25, 2009                                          REBEKAH CARMICHAEL

WWW.USDOJ.GOV/USAO/NYS JANICE OH

PHONE: (212) 637-2600

MANHATTAN U.S. ATTORNEY CHARGES CHAIRMAN AND CHIEF EXECUTIVE OFFICER

OF NEMAZEE CAPITAL WITH BANK FRAUD

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.

Specifically, the various accounts referenced in the fraudulent documents that Nemazee submitted, and caused to be submitted to Citibank either never existed or had been closed years before he submitted the documents referencing those accounts.  Furthermore, on many of the documents at issue, Nemazee falsely provided as the address and telephone numbers of various financial institutions purportedly vouching for his financial strength an address and telephone number that was, in fact, controlled by Nemazee.  As a result, in the event anyone at Citibank made an effort to confirm the existence of the assets reflected on the fraudulent documents submitted by Nemazee, they would in fact be contacting a telephone number assigned to Nemazee himself, and not any financial institution.

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.

Nemazee is expected to be presented later today in Manhattan federal court before U.S. Magistrate Judge Ronald L. Ellis.

Mr. Bharara praised the investigative work of the FBI.  Mr. Bharara said that the investigation is continuing.

Assistant U.S. Attorneys John M. Hillebrecht and Daniel W. Levy are in charge of the prosecution.

The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

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