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Democratic Fund-Raiser Nemazee Indicted In $292 Million Fraud

By Chad Bray, Of DOW JONES NEWSWIRES

NEW YORK -(Dow Jones)- New York businessman and prominent Democratic fund- raiser Hassan Nemazee was indicted Monday for allegedly defrauding three banks out of $292 million in loans.

Nemazee, 59 years old, was charged with aggravated identity theft and three counts of bank fraud in the indictment. Each bank fraud count carries a term of up to 30 years in prison.

A lawyer for Nemazee didn't immediately respond to a request for comment.

Nemazee, who was involved in various presidential campaigns and once served as finance chairman of the Democratic Senatorial Campaign Committee, was initially charged criminally in August related to a loan he allegedly obtained fraudulently from Citigroup Inc.'s (C) Citibank unit.

Prosecutors from the U.S. Attorney's office in Manhattan also are seeking $292 million in forfeiture in the case.

In the indictment, prosecutors alleged that Nemazee obtained hundreds of millions of loans from Bank of America Corp. (BAC), Citigroup and HSBC Holdings Plc (HBC) between 1998 and 2009.

The government said Nemazee, of Manhattan, used fake documents that claimed he had hundreds of millions of dollars are collateral to obtain the loans.

He allegedly used the proceeds from the loans to make donations to the election campaigns of federal, state, and local candidates; to make donations to political action committees; to make donations to charities; to purchase real property in Italy; and to make monthly maintenance payments on real properties in Manhattan and Katonah, N.Y., prosecutors said.

As of August 2009, Nemazee owed about $142 million to Bank of America and about $74.9 million to Citibank, the government said.

Nemazee made partial repayments on his borrowings from Bank of America with the loan he took out from Citibank, prosecutors said. After Federal Bureau of Investigation agents interviewed him in August, he fraudulently obtained a line of credit from HSBC and used the monies to repay Citibank, the government said.

HSBC sued Nemazee in New York State Supreme Court earlier this month, alleging he fraudulently obtained a $100 million loan from the bank and withdrew $75 million in proceeds.

-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com

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