Nemazee, 60, could face 20 years in prison. He will be sentenced in June.
It was a dramatic fall for a man who was nominated 12 years ago by President Bill Clinton to be the U.S. ambassador to Argentina.
An investor and Harvard graduate, Nemazee admitted in Manhattan federal court to defrauding Bank of America of over $142 million, Citigroup of $74.9 million and HSBC Holdings of $74.9 million.
“It was my intention to repay,” Nemazee said in court, “but the hole that I dug was larger and I borrowed more.… I’m deeply ashamed of my conduct.… I accept full responsibility.”
Court documents showed Nemazee used some of the money he obtained through fraudulent means to buy land in Italy, make monthly maintenance payments on a New York Park Avenue apartment, pay for the upkeep of a 12-acre property in Katonah, New York, and make personal donations to election campaigns.
The heart of the fraud was that Nemazee (and his brother-in-law, who was charged a few weeks ago) created mythical accounts purporting to show that he possessed many millions of dollars in assets that could be used as collateral for the bank loans.
Citibank brought Nema-zee’s case to the FBI’s attention when it realized it approved a $74 million loan based on alleged collateral of $500 million in assets that did not exist. Nemazee immediately paid back the $74 loan, but it was too late. Investigations were underway and he was found using fraud when seeking a loan as early as 1998.
The scale of the fraud was astonishing. The total came to almost $300 million. By way of comparison, in 2006, only 38,400 households in the United States and Canada were worth more than $30 million.
After his arrest in August 2009, Nemazee was freed on $25 million bail and put under electronic monitoring. Judge Sidney Stein ordered Nemazee to get his affairs in order before his sentencing June 30. Under federal guidelines, he could face 16-20 years in prison.
Nemazee likely will also have to forfeit $292.2 million and pay $217.3 in restitution. He has agreed to forfeit interests in properties, corporate entities, hedge funds, security accounts, bank accounts, a 2008 Maserati Quattroporte and a 2007 Cessna aircraft.
Nemazee was listed as one of the top “bundlers” of contributions to Obama’s 2008 presidential campaign by OpenSe-crets.org. He was one of a handful of national finance directors for Hillary Clinton’s primary campaign. Prior to that, he was the chief of fundraising for the Democratic Senatorial Campaign Committee, which raises funds to help Democratic senatorial candidates for all 50 states.
Immediately after Nema-zee’s arrest last August, Democrats rushed to return contributions they had received from Nemazee. In over 15 years of political activity, he and his wife donated over $800,000 to candidates, but that was a mere pittance compared to the amounts Nemazee raised from others.
In addition to aiding major Democratic candidates, Nema-zee gave funds to Iranian-Americans, Democrats and Republicans alike, running for office all across the country as he actively sought to promote more involvement in politics by Iranians.
Nemazee was born in Washington, D.C., while his father was serving as economic attaché at the Iranian embassy. Because he was a diplomat’s offspring, he did not gain U.S. citizenship by birth. He only became a citizen in 1996, two years before he was nominated for the ambassadorship by Clinton.
Forbes magazine then wrote a scathing expose on questionable business practices, including allegations that Nemazee had cheated relatives. The magazine also reported that one of the few people making the maximum contribution of $10,000 to President Clinton’s legal defense fund was Nemazee’s gardener, suggesting the money actually came from Nemazee. The ambassadorial nomination swiftly died.
