A fund-raiser for Barack Obama, Hillary Clinton and other Democrats who was charged last month with defrauding Citigroup Inc is being sued by HSBC for deceiving it into lending him $100 million.
The lawsuit filed in New York State Supreme Court in early September accused private equity firm head Hassan Nemazee, 59, of engaging in an elaborate scheme to make HSBC Bank USA believe that its loan was secured by collateral in the form of U.S. Treasury Notes when it was not.
Nemazee, who sits on the board of the Iranian American Political Action Committee, typically donates more than $100,000 annually to Democratic political candidates.
He is listed as one of the top bundlers of contributions to Obama's 2008 presidential campaign, according to OpenSecrets,org, a website run by the Center for Responsive Politics research group.
Nemazee was charged on Aug. 25 of one count of bank fraud for seeking a $74 million loan from Citigroup's banking unit under false pretenses.
He was arrested at Newark Liberty International Airport in New Jersey on Aug. 23 as he was checking in for a flight to Italy, according to court papers.
U.S. prosecutors accused him on Sept. 2 of defrauding other banks. In a letter to a magistrate judge in Manhattan federal court, prosecutors said he repaid the Citibank loan by defrauding another bank, but did not identify it.
The bank was HSBC, according to the civil lawsuit. The bank sued Nemazee for breach of contract and fraud. Nemazee's lawyers could not immediately be reached for comment.
The HSBC lawsuit, dated Sept. 2, said that to accomplish the fraud, Nemazee represented to HSBC that he had $89 million in Treasury Notes, with a current market value of more than $125 million, in a specified brokerage firm account; submitted a supposed agreement from the brokerage firm with forged signatures, false addresses, and false telephone numbers; used a mail drop; and submitted fabricated brokerage statements.
HSBC said that on Aug. 24, Nemazee drew $75 million from HSBC on his fraudulently obtained credit facility, and used the funds to pay off his Citibank loan.
In court papers, lawyers said the government had frozen two of Nemazee's accounts at JPMorgan Chase & Co.
They said JPMorgan Chase froze his securities account at Brean Murray, Carret & Co and Bank of America Corp froze his funds and those of his children.
If convicted, Nemazee faces up to 30 years in prison and a fine that could reach $1 million or more on the one criminal charge.
The cases are HSBC Bank USA NA v Hassan Nemazee 602735/2009 in New York State Supreme Court in Manhattan and U.S. v. Nemazee, 09-mj-1927 in U.S. District Court for the Southern District of New York (Manhattan).
(Reporting by Grant McCool; Editing by Ted Kerr)