* 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 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
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
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
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)