* Fraud took place over 10-year span
* Obama campaign "bundler" faces prison time
* Nemazee tells court he is ashamed (Adds forfeiture and restitution; affected political donations to go to charity)
By Grant McCool
NEW YORK, March 18 (Reuters) - A wealthy businessman who raised money for leading Democratic Party politicians, including Barack Obama and Hillary Clinton, pleaded guilty on Thursday to defrauding three major banks out of $292.2 million in loan transactions.
Hassan Nemazee, 60, who once ran a private equity firm, admitted in Manhattan federal court to defrauding Bank of America Corp (BAC.N) of more than $142 million, Citigroup Inc (C.N) of $74.9 million and HSBC Holdings Plc (HSBA.L) of $74.9 million to pay his debt to Citigroup.
During the plea proceeding, Iranian-born Nemasee, who owned several multimillion dollar properties and had interests in various companies and hedge funds, said he had tried to get out of financial difficulty starting in the 1990s.
"It was my intention to repay ... but the hole that I dug was larger and I borrowed more," said the gray-haired, dapper Nemazee, who appeared embarrassed and contrite.
"I am deeply ashamed of my conduct, for the harm that I inflicted on the banks and most especially my family," he told U.S. District Judge Sidney Stein in a sombre voice as family members sat in court.
Nemazee, a former member of the board of the Iranian American Political Action Committee, was a U.S. citizen whose family left Iran after the revolution there in 1979.
The committee contributes to candidates for public office in the United States regardless of party affiliation and works to support Iranian American candidates and issues important to that community, such as immigration.
Nemazee admitted to three charges of bank fraud and one charge of wire fraud. Prosecutors said he had obtained hundreds of millions of dollars in loans from the banks and used fake documents to show supposed ownership of collateral.
Nemazee was listed as one of the top "bundlers" of contributions to Obama's 2008 presidential campaign, according to OpenSecrets.org, a website run by the Center for Responsive Politics.
He typically donated more than $100,000 annually to Democratic Party political candidates, including Obama and now-U.S. Secretary of State Hillary Clinton.
Nemazee faces forfeiture of $292.2 million and restitution of $217.3 million. He agreed to forfeit interests in properties, corporate entities, hedge funds, securities accounts, bank accounts, a 2008 Maserati Quattroporte and a 2007 Cessna aircraft.
The judge allowed Nemazee to remain free on $25 million bail but under house arrest with electronic monitoring in his Manhattan apartment.
His lawyer, Paul Shechtman, successfully argued that his client was not a flight risk, but out of concern that he had property overseas and perhaps tens of millions of dollars to his name, he was ordered to surrender on April 30.
The judge said that would give him time to get his affairs in order before sentencing on June 30.
Prosecutors said the fraud took place from 1998 until Nemazee's arrest in August 2009 as he was about to make a trip overseas.
The office of Manhattan U.S. Attorney Preet Bharara and the FBI said Nemazee had used proceeds from his scheme to make donations to election campaigns of federal, state and local candidates, political action committees and charities.
They said he also bought property in Italy and paid for maintenance on two properties in New York.
The Democratic National Committee declined to comment, but an official said it had been previously announced that the affected donations would go to charity.
The offenses call for a maximum possible prison term of 30 years but the judge said that under federal guidelines following his guilty plea, Nemazee faced a sentence of between 15 years, eight months and 19 years, seven months.
U.S. prosecutor Daniel Levy told the court the government had committed considerable resources to tracking down Nemazee's wealth and believed he was still worth millions.
"There is a big hole of money we have just not been able to find," Levy said.
The case is USA v Nemazee, U.S. District Court for the Southern District of New York No. 09-902. (Reporting by Grant McCool, additional reporting by Jeff Mason; Editing by Andre Grenon, Richard Chang and Ted Kerr)