Top Democratic Fundraiser Pleads Guilty to Fraud
Hassan Nemazee parlayed illegally borrowed funds into access to politicians.
March 18, 2010 — -- One of the nation's most prolific political money men pleaded guilty in federal court today to a $292 million fraud scheme involving mega loans from three major U.S. banks -- a dramatic fall from two years earlier, when he was a senior adviser helping Hillary Clinton raise funds for her presidential bid.
A longtime friend and confidante of the Clintons, Hassan Nemazee, 60, served in a variety of high-ranking fundraising roles for leading Democrats. Now he faces up to 30 years in prison, and under his agreement with the government, he will forfeit his 2008 Maserati Quattroporte and his 2007 Cessna aircraft. A message left with his lawyer, Paul Shechtman, was not returned.
Prosecutors described a pattern of deception that began in the late 1990s and continued until Nemazee's arrest in August 2009. Reuters reported that Nemazee spoke during Thursday's court hearing, telling the judge that he had spent years trying to find a way out of his financial troubles.
"It was my intention to repay," he said, according to the report. "But the hole that I dug was larger and I borrowed more."
According to prosecutors, Nemazee told Bank of America that he needed the money for, among other things, "making investments, purchasing partial interest in a private plane, and purchasing two luxury apartments in Manhattan." He also used the money to purchase an apartment and land in Italy, make monthly maintenance payments on a Park Avenue apartment, and pay for the upkeep of a 12-acre property in Katonah, New York.
The borrowed funds also turned into hundreds of thousands of dollars in campaign contributions he made to local, state, and federal candidates around the country, prosecutors said.
Before his arrest, Nemazee led a private equity firm from a midtown Manhattan office tower, where he used to boast of visits from Bill Clinton and display photographs of himself with an array of political luminaries. His Park Avenue apartment was the scene of numerous fundraising events for Democrats.
At the time he joined Hillary Clinton's finance team as a co-chairman, he was considered a valuable catch because of his mastery of parlaying an enormous Rolodex of business and personal contacts into stacks of campaign contributions.
After Clinton lost the Democratic nomination, Nemazee became a central figure in helping to unite party insiders. He went on to assist then-candidate Barack Obama raise money during the general election. The Center for Responsive Politics lists him as one of the dozens of so-called bundlers who raised more than $500,000 for Obama's bid.
Word of Nemazee's arrest came last summer, two days after FBI agents interviewed him at Newark Liberty International Airport as he was checking in for a flight to Italy, where he also owns property.
The initial complaint accused Nemazee of trying to persuade Citigroup to lend him up to $74 million based on false representations that he had millions of dollars in available collateral. It said he fabricated documents to make it look like he had hundreds of millions of dollars tied up in other banks which could be used to secure additional loans. The documents he allegedly gave Citibank included contact information for bank officials that led right back to Nemazee himself. "In the event anyone at Citibank made an effort to confirm the existence of the assets . . . they would in fact be contacting a telephone number assigned to Nemazee himself, and not any financial institution," the complaint said.
Thursday, he admitted to fraudulently obtaining more than $142 million from Bank of America Corp. and $74.9 million from HSBC Holdings, in part to try and repay the $74 million debt to Citigroup.
More than a decade earlier, questions about Nemazee's finances cost him his shot at becoming ambassador to Argentina. Nominated by President Clinton, the Senate rejected his selection to the post because of a Forbes magazine article about a business venture he helped launch under the guise of being "100 percent Hispanic-owned." Nemazee, an Iranian-American, owned 49 percent.