Hassan Nemazee, a former political fundraiser for U.S. President Barack Obama and Secretary of State Hillary Clinton, should be sentenced to as much as 19 years and seven months in prison for his bank fraud conviction, prosecutors said.
Nemazee pleaded guilty in federal court in Manhattan in March to defrauding Citigroup Inc., HSBC Holdings Plc and Bank of America Corp. out of millions of dollars. After he was arrested in August, prosecutors said he cheated the banks out of $292 million. He is to be sentenced June 30.
Nemazee deserves from 15 years and eight months to 19 years and seven months, prosecutors said yesterday in court papers.
“The defendant was, in essence, running a Ponzi scheme-- using the proceeds of one fraud to pay off another fraud victim,” Assistant U.S. Attorney Daniel W. Levy wrote in a memorandum to U.S. District Judge Sidney Stein.
Information the fundraiser provided about his finances and fraud in four meetings with the government after charges were filed was “of no value,” prosecutors said.
Nemazee raised at least $100,000 for Clinton’s 2008 presidential campaign, according to the Washington watchdog group Public Citizen. He brought in at least $500,000 for Obama after Clinton lost in the primary campaign, according to Public Citizen.
Amount of Loss
From 1998 to 2009, Nemazee “obtained hundreds of millions of dollars worth of loans from BofA, Citibank, and HSBC,” prosecutors said in Nemazee’s indictment.
“Part of the manner in which the defendant was able to dupe the banks into lending him substantial sums of money was to trade on his substantial reputation in political circles as a prodigious fundraiser in order to convince the banks that he was deserving of their trust,” prosecutors said.
“For example, the defendant was courted as a client at the highest levels of Bank of America, Citi, and HSBC and was provided with outstanding client service by those banks, in part, because the banks believed that the defendant was an important person in political circles,” the U.S. said.
In court during his guilty plea, Nemazee said his fraud began in the mid-1990s as he faced financial difficulties. He admitted that he used forged documents to borrow from banks and said he intended to repay the lenders. He said he was unable to do so as his investments went bad.
Nemazee’s lawyer, Paul Shechtman, said he will file a response with the court on his client’s behalf in about a week.
“We did not ask for any specific sentence from the court,” Shechtman said today in a telephone interview. “We told the judge we recognized the seriousness of the crime but hope he will view it in the context of a life filled with extraordinarily good deeds.”
Nemazee made partial payments to one bank with loans he fraudulently obtained from other banks, according to the indictment. He repaid some of what he 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 used the stolen funds to make donations of more than $845,000 to candidates, political action committees and more than $1.1 million to 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 HSBC.
Prosecutors said that the defendant “consumed great quantities of funds” to fuel a lifestyle which included the purchase of an apartment in Rome in December 2004 costing 1.65 million euros and monthly American Express credit card bills that were “routinely in excess of $50,000.”
“The ultra-lavish lifestyle that the defendant engaged in with the stolen money suggests that part of the motivation for the defendant’s crime was simple greed and a desire to live well beyond the means that honest work, talent, and luck could allow him,” Levy said.
The case is U.S. v. Nemazee, 09-CR-00902, U.S. District Court, Southern District of New York (Manhattan).
-- With assistance from David Glovin and Bob Van Voris in New York. Editors: John Pickering, Charles Carter