UPDATE: DOJ Seeks Long Jail Term For Onetime Fundraiser

24th Jun 2010 17:31

(Updates with more details from the filing, date of sentencing.) By David Benoit Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Federal prosecutors asked a judge to sentence Hassan Nemazee, a onetime prominent Democratic fund-raiser and New York businessman, to a prison term as long as 19-and-a-half years for his $292 million fraud, saying his long-term pattern of lying and lavish lifestyle justified the high sentence. Nemazee, who pleaded guilty to wire fraud and three counts of bank fraud in March, defrauded Bank of America Corp. (BAC), Citigroup Inc. (C) and HSBC Holdings PLC (HBC) between 1998 and 2009, according to prosecutors. U.S. Attorney Preet Bharara asked U.S. District Court Judge Sidney H. Stein to impose a sentence of 188 to 235 months, the full sentencing guideline, despite Nemazee's guilty plea. Bharara, in a court filing late Wednesday, called the crimes Nemazee committed "staggering," detailing a long pattern of deceit and lies for Nemazee's own personal benefit. The sentencing is scheduled for next Wednesday afternoon. The letter said that even after Nemazee was questioned about fraud at Citi, he went on to defraud HSBC, and that Nemazze's character and actions merited the strict sentence. "At a moment when his fundamental character was tested--faced with the choice to proceed yet again with the fraud against a new victim (HSBC) or finally put an end to it--the defendant chose to steal yet another $75 million," the letter said. The government also cited the "extremely lavish lifestyle" Nemazee lived and his use of the money to "build up his reputation, including as a political kingmaker" as justification for the full sentence. It also said that by allegedly involving his brother-in-law, Shahin Kashanchi, Nemazee further showed the lengths to which he was willing to go to. Kashanchi has been indicted on a single count of bank fraud for allegedly assisting Nemazee by creating false documents used in the scheme. Kashanchi has denied wrongdoing. "In short, the ultra-lavish lifestyle that the defendant engaged in with the stolen money suggests that part of the motivation for the defendant's crime was simple greed and a desire to live well beyond the means that honest work, talent, and luck could allow him," the letter read, listing properties purchased in Italy and part of a $1.72 million yacht, among other expenditures. The letter coupled those charges with Nemazee's "comfortable upbringing" and Harvard education. The government further argued that Nemazee's meetings with prosecutors and the information he supplied, while useful in corroborating other witnesses, was "of limited utility" and didn't provide new evidence worthy of reducing his sentence. Nemazee had said at his guilty plea that he had intended to repay what he had borrowed. "In the 1990s, I was facing severe financial difficulties," Nemazee said at the time. "I decided to borrow my way out." A lawyer for Nemazee wasn't immediately available for comment Thursday. The government said the defense is arguing that the total losses are less than $292 million and that some of the losses are likely to be recovered, which the defense says should justify a lighter penalty. The government says those claims are false and shouldn't be taken into account by the judge. 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 2009 related to a loan he fraudulently obtained from Citigroup's Citibank unit. -By David Benoit, Dow Jones Newswires; 212-416-2458; [email protected] (END) Dow Jones Newswires June 24, 2010 12:31 ET (16:31 GMT)