The Birth of a Scheme?

Years ago, an entire class of financial crime was named in honor of famed swindler Charles Ponzi. Perhaps Hassan Nemazee should be a candidate for the same treatment if he is found guilty of charges that he defrauded Citibank of $74 million.

Nemazee, chief executive of Nemazee Capital in New York and a heavy hitter among Democratic political fundraising circles, allegedly borrowed those millions from Citibank while he claimed he had hundreds of millions held at other banks as collateral.

The Justice Department, in a statement, charged that Nemazee got the millions by giving 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."

On Sunday, Nemazee was questioned by federal authorities at Newark International Airport just before he was set to fly to Rome. On Monday, he repaid the $74 million to Citibank. And today, he was arrested and charged with fraud in a complaint filed by the U.S. Attorney for the Southern District of New York.

This isn't be the first time that Nemazee has been the subject of scrutiny. In 1998, President Bill Clinton nominated Nemazee to be ambassador to Argentina, but that effort was killed because of news stories that raised questions about Nemazee’s business practices.

Nemazee has remained close to the former president and his wife, Hillary Clinton—the first lady turned New York senator turned Secretary of State. During Hillary Clinton’s presidential campaign last year, Nemazee was her national finance chairman.

According to media accounts, Nemazee faces up to 30 years in prison plus a fine if convicted. Then, maybe we’ll start talking about a Nemazee Scheme.