LawFuel.com – 26 August, 2009 – PREET BHARARA, the United States Attorney for the Southern District of New York, and JOSEPH M. DEMAREST, JR., the Assistant Director-in-Charge of the New York Office of the
Federal Bureau of Investigation (“FBI”), announced the arrest
this morning of HASSAN NEMAZEE, the Chairman and Chief Executive
Officer of Nemazee Capital Corporation, in connection with a
scheme to defraud Citibank, N.A. (“Citibank”). According to the
Complaint filed in Manhattan federal court:
NEMAZEE engaged in a fraudulent scheme to induce
Citibank to lend up to $74 million to NEMAZEE based on false
representations that NEMAZEE owned millions of dollars in
collateral. NEMAZEE submitted, and caused to be submitted, to
Citibank numerous documents that purported to establish the
existence of accounts in NEMAZEE’s name at various financial
institutions containing many hundreds of millions of dollars. In
fact, those were fraudulent and forged documents.
Specifically, the various accounts referenced in the
fraudulent documents that NEMAZEE submitted, and caused to be
submitted, to Citibank either never existed or had been closed
years before NEMAZEE submitted the documents referencing those
accounts. Furthermore, on many of the documents at issue,
NEMAZEE falsely provided as the address and telephone numbers of
various financial institutions purportedly vouching for his
financial strength an address and telephone number that was, in
fact, controlled by NEMAZEE. As a result, in the event anyone at
Citibank made an effort to confirm the existence of the assets reflected on the fraudulent documents submitted by NEMAZEE, they
would in fact be contacting a telephone number assigned to
NEMAZEE himself, and not any financial institution.
On August 23, 2009, federal agents interviewed NEMAZEE
at Newark Liberty International Airport, as he was in the process
of checking in for a flight to Rome, Italy. On the afternoon of
August 24, 2009, NEMAZEE repaid to Citibank his outstanding loan,
an amount in excess of $74 million.
NEMAZEE, 59, currently resides in Manhattan and
Katonah, New York. 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
NEMAZEE is expected to be presented later today in
Manhattan federal court before United States Magistrate Judge
RONALD L. ELLIS.
Mr. BHARARA praised the investigative work of the FBI.
Mr. BHARARA said that the investigation is continuing.
Assistant United States Attorneys JOHN M. HILLEBRECHT
and DANIEL W. LEVY are in charge of the prosecution.
The charge and allegations contained in the Complaint
are merely accusations, and the defendant is presumed innocent
unless and until proven guilty.