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Democratic Party fundraiser pleads not guilty in alleged Ponzi scheme

By Bernard Hibbitts (editor) and University of Pittsburgh School of Law students.

[JURIST] Democratic Party fundraiser Hassan Nemazee, accused of orchestrating a $290 million pyramid scheme, pleaded not guilty to fraud charges Wednesday in the US District Court for the Southern District of New York. Federal prosecutors indicted Nemazee Monday on three counts of bank fraud, each of which carries a maximum prison term of 30 years, and one count of aggravated identity theft, which carries a mandatory prison term of two years. Nemazee could also face large fines and asset forfeitures. US Attorney Preet Bharara said: For more than ten years, Hassan Nemazee projected the illusion of wealth, stealing more than $290 million so that he could lead a lavish lifestyle and play the part of heavyweight political fundraiser. ... Today's indictment exposes the sheer brazenness of Nemazee's schemes and marks the end of his decade of deception.Nemazee, who was a fundraiser for Barack Obama, Hillary Clinton, and other prominent Democrats, was arrested in August and is currently under house arrest as part of a bail agreement. He will be arraigned at a later date. A spokesperson for the Democratic National Committee said the DNC, Obama for America, and the Presidential Inaugural Committee will return or donate to charity money raised by Nemazee.In May, disgraced Democratic Party fundraiser Norman Hsu was convicted on charges of violating the Federal Elections Campaign Act (FECA). Hsu was accused of making illegal campaign contributions in other peoples' names in violation of the FECA. According to the indictment, Hsu also allegedly pressured clients to donate to his preferred democratic candidates and threatened to cut them off if they did not comply with his wishes. In September 2007, New York prosecutors charged Hsu with orchestrating a $60 million Ponzi scheme in connection with the same events. Hsu pleaded guilty to those fraud charges in May. The FBI arrested Hsu in Colorado on federal charges of unlawful flight to avoid prosecution after Hsu failed to appear for a bail hearing in California on unrelated fraud charges on September 5, 2007. Hsu formerly raised funds for political candidates, including Clinton. Clinton agreed to return $850,000 she received from Hsu when news of the charges became public.

Full post as published by JURIST - The Paper Chase on September 23, 2009 (boomark / email).