Sunday, October 20, 2019

He committed a $300 million fraud, but is now free under Trump’s justice overhaul

  • >>Benjamin Weiser
    Published: 2019-04-14 00:31:02 BdST


Three weeks ago, a 69-year-old man convicted of bank fraud quietly left a federal prison camp in Cumberland, Maryland, and moved into a friend’s one-bedroom apartment in Manhattan. He was one of the early inmates to benefit from a criminal justice bill signed into law by President Donald Trump.

The law, the First Step Act, offered prisoner rehabilitation programs and overhauled sentencing policies that supporters claimed had a disproportionate effect on poor defendants, especially minorities.


But one person who benefited from the law was Hassan Nemazee, the prisoner at Cumberland, who was once an investor of enormous wealth and who donated heavily to Democratic political causes. He was a national finance chairman for Hillary Clinton’s 2008 presidential campaign and later raised hundreds of thousands of dollars for Barack Obama’s first presidential contest.

Nemazee, who is serving the rest of his sentence in home confinement, acknowledged in interviews that he was not a fan of Trump, but he felt personally indebted to the president and his aides for pushing through “the most significant prison reform legislation in a generation.”

“Credit where credit is due,” Nemazee said.

Trump said recently at the White House that “unfair sentencing rules were contributing to the cycle of poverty and crime,” and since the First Step Act’s passage, more than 500 people with “unfair sentences have been released from prison and are free to begin a new life.”

But Nemazee left prison under a less publicised part of the bill that allows certain offenders who are over 60 and not considered a threat to others to be released into home confinement if they have completed two-thirds of their sentence.

In home confinement, Nemazee does not wear an ankle bracelet, but officials may call him on a landline late at night or early in the morning to verify he is at home. He may be summoned for a urine test at any time and must submit his weekly schedule for approval, he said.

Still, it feels a lot like freedom. He may leave his apartment to go to work, the gym, religious services or appointments with his doctors and lawyers. He may also go out to lunch, “which is always a treat, given where I have been the last 8 1/2 years.”

“Home confinement is a huge improvement over prison in every respect,” Nemazee said.

The Bureau of Prisons has said that since the bill’s passage, 10 prisoners — of 23 thus far deemed eligible — have been released into home confinement. The bureau would not identify the prisoners or comment on their cases.

Another is reported to be a white-collar criminal named Herman Jacobowitz, 60, who pleaded guilty in Brooklyn in 2005 in another large fraud case and was sentenced to 15 years, according to court papers and a lawyer familiar with the case. Jacobowitz could not be reached for comment.

Annette Bongiorno, 70, who was Bernard L. Madoff’s longtime secretary and was convicted of fraud, has also applied for release into home confinement but has not heard if her request was approved, her lawyer, Roland G. Riopelle, said.

Nemazee was charged in 2009 with orchestrating a scheme that defrauded banks of nearly $300 million. He pleaded guilty to four fraud counts and was ordered to forfeit his $17.75 million Park Avenue duplex; an estate in southern Italy; a blue Maserati; shares in a yacht and private airplane; and $93 million in cash and securities. He was sentenced to 12 years in prison.

“I feel grateful that I am out earlier than I would have been otherwise,” Nemazee said in an interview over tea at the Pierre Hotel on Fifth Avenue. The new law also gives prisoners more time off for good behaviour, and Nemazee will complete his sentence in November.

Besides age and length of time in prison, offenders must have no record of violent crime, sex offenses or escape attempts, and officials must determine they are not a risk of committing new crimes or harming others.

That Nemazee, a Harvard-educated former multimillionaire, qualified for home confinement showed that programs that weigh a prisoner’s risk to society give white-collar offenders a distinct advantage, said Douglas A. Berman, a law professor and sentencing expert at Ohio State University.

Still, he said: “It makes so much sense to ship the elderly out. They are so low-risk and such high-cost that we should just get them home.”

Prosecutors charged Nemazee with using fake account statements and forged signatures to show he had collateral worth hundreds of millions of dollars to fraudulently obtain $292 million in loans from Bank of America, Citibank and HSBC.

He used the funds to buy and maintain luxury properties, make financial investments and contribute some $2 million in political donations and charitable gifts, the government said.

“Pride, ego, arrogance, self-image, self-importance — all of these and more are among the reasons why I travelled down this destructive path,” he told Judge Sidney H. Stein of US District Court at his sentencing in Manhattan.

Stein called Nemazee’s crime “breathtaking in its brazenness, in its scope.”

Preet Bharara, then the US attorney, wrote in his new book “Doing Justice” that Nemazee was “essentially a less famous version of Bernard Madoff.”

Nemazee said his wealth was now gone. He said the friend who lent him his Upper East Side apartment was not charging rent. The friend, who is president and chief executive of a group of insurance companies, had also hired him as a senior adviser, he said. He would not identify the friend.

Nemazee said that before entering prison, he took to heart the advice of another friend, who told him: “‘Hassan, people view a prison sentence as a loss of time. I suggest you view it as a gift of time.’”

At a low-security facility in Texarkana, Texas, and prison camps at Otisville, New York, and Cumberland, he said he kept busy writing and reading, exercising, mentoring other inmates and spending “countless hours deep in thought.”


© 2019 New York Times News Service