PREET BHARARA, the United States Attorney for the
Southern District of New York, announced the indictment today of
SHAHIN KASHANCHI, who aided and abetted HASSAN NEMAZEE in a
scheme to defraud Bank of America, N.A. (“BofA”), Citibank, N.A.
(“Citibank”), and HSBC Bank USA, N.A. (“HSBC”) of more than $290
million in loan proceeds. KASHANCHI was arrested on a Complaint
on September 25, 2009.
According to the Indictment returned today by a grand
jury and other documents filed in court:
From approximately 1997 through 2009, NEMAZEE obtained
hundreds of millions of dollars worth of loans from BofA,
Citibank, and HSBC. As of August 2009, NEMAZEE owed
approximately $142 million to BofA and approximately $74.9
million to HSBC. Documents and signatures that NEMAZEE used to
obtain these loans, including documents he submitted to
purportedly show that he had hundreds of millions of dollars
worth of collateral, were fake.
NEMAZEE’s scheme depended on his use of fraudulent
documents, including phony account statements and phony
correspondence bearing forged signatures. These fraudulent
documents were designed to convince the various banks to whom
NEMAZEE submitted the documents that NEMAZEE had assets totaling
hundreds of millions of dollars and that he had placed many
millions of dollars of United States Treasury securities in
certain specified accounts as collateral for the loans from the
Many of the fraudulent documents submitted by NEMAZEE
to BofA, Citibank, and HSBC were created by KASHANCHI at the
direction of Nemazee. In particular, over the course of
NEMAZEE’s efforts to defraud BofA, Citibank, and HSBC, KASHANCHI
regularly manufactured account statements for the non-existent
collateral accounts. In addition, when Citibank began to ask
questions of NEMAZEE in order to verify the existence of
collateral for its loan, KASHANCHI manufactured, at NEMAZEE’s
request, letterhead of Pershing LLC that NEMAZEE subsequently
used to falsely and fraudulently represent to Citibank that the
collateral for its loan existed, when, in fact, it did not.
After submitting this false and fraudulent letter to
Citibank, NEMAZEE drew down upon a line of credit fraudulently
obtained from HSBC to pay off the outstanding loan of
approximately $74.9 million to Citibank.
* * *
KASHANCHI, 46, currently resides in Telluride,
Colorado. He is charged with one count of bank fraud, which
carries a maximum prison term of 30 years and a maximum fine of
$1,000,000 or twice the gain or loss resulting from the crime.
This case has been assigned to United States District Judge
DEBORAH A. BATTS.
NEMAZEE, 60, has been separately charged in an
Indictment in the Southern District of New York with three counts
of bank fraud, each of which carries a maximum prison term of 30
years and a maximum fine of $1,000,000 or twice the gain or loss
resulting from the crime. NEMAZEE is also charged with one count
of aggravated identity theft, which carries a mandatory prison
term of two years and which must be consecutive to any sentence
imposed on the bank fraud counts. NEMAZEE was arrested on a
Complaint on August 25, 2009. NEMAZEE’s case is currently
pending before United States District Judge SIDNEY H. STEIN.
Mr. BHARARA praised the investigative work of the
Federal Bureau of Investigation.
The case is being prosecuted by the Office’s Complex
Frauds Unit. Assistant United States Attorneys DANIEL W. LEVY
and MICHAEL D. LOCKARD are in charge of the prosecution.
The charge and allegations contained in the Indictments
are merely accusations, and the defendants are presumed innocent
unless and until proven guilty.