Investor charged in $74 million Citigroup fraud scheme

NEW YORK Tue Aug 25, 2009 12:31pm EDT

NEW YORK (Reuters) - The U.S. attorney in New York on Tuesday charged a New York investor with a $74 million scheme to defraud Citigroup Inc (C.N).

Prosecutors said Hassan Nemazee, the chairman and chief executive of Nemazee Capital Corp, sought to induce Citigroup's banking unit to lend up to $74 million based on fraudulent and forged documents suggesting that he had hundreds of millions of dollars of accounts that could be used as collateral.

They said federal agents stopped Nemazee, 59, on Sunday at Newark Liberty International Airport as he prepared to board a flight to Rome, and the following day he repaid his more than $74 million loan to Citigroup.

Nemazee was charged with one count of bank fraud, and faces up to 30 years in prison plus a fine. Prosecutors said he has homes in Manhattan and Katonah, New York.

Former federal prosecutor Marc Mukasey, now a lawyer for Nemazee, did not immediately return a call seeking a comment. Citigroup spokeswoman Shannon Bell had not seen the charges and had no immediate comment.

The case is: U.S. v. Nemazee, U.S. District Court, Southern District of New York (Manhattan), No. 09-mj-1927.

(Reporting by Jonathan Stempel, editing by Leslie Gevirtz)