updated 8/25/2009 7:32:54 PM ET 2009-08-25T23:32:54

A wealthy investment banker and prominent fundraiser for President Barack Obama, Hillary Clinton and other top Democrats was arrested Tuesday on charges he lied to get a $74 million business loan that — once confronted by authorities — he hastily repaid.

Prosecutors accused Hassan Nemazee of giving Citibank documents showing he owned millions of dollars in collateral. They said the documents were “fraudulent and forged.”

At a brief appearance in federal court in Manhattan on Tuesday, a judge ordered a haggard-looking Nemazee locked up for the night. His attorney won assurances from prosecutors that he would be fitted with an electronic monitoring device and put under house arrest on Wednesday as part of a $25 million bail package secured by property including a $20 million Park Avenue apartment.

The attorney, Marc Mukasey, had argued that Nemazee should be released immediately after agreeing to “the most onerous bail package I’ve ever heard of.” Instead, his client, wearing a wrinkled pink dress shirt, was lead out of the courtroom to jail.

A Clinton spokesman didn’t immediately return an e-mail message seeking comment.

The chairman and chief executive of Manhattan-based Nemazee Capital Corp. served as national finance chairman for Hillary Clinton’s presidential campaign in 2008, and later raised money for Obama after her primary defeat. He also was Sen. John Kerry’s finance chairman in New York for his 2004 bid for president.

In 1999, President Bill Clinton nominated him to be U.S. ambassador to Argentina but his nomination was never confirmed.

A criminal complaint alleges that Nemazee gave the bank documents detailing assets that “never existed or had previously existed” in accounts that had been closed years earlier. It also accuses him of providing false verifying information for financial institutions, including a phone number that actually belonged to him.

Prosecutors said FBI agents had stopped the 59-year-old financier on Sunday at Newark Liberty International Airport as he prepared to board a flight to Rome. They said he paid off the $74 million loan the next day.

His attorney said Tuesday that family members were headed home from Europe, where they had been vacationing.

Nemazee, who did not enter a plea or speak at the court hearing, faces up to 30 years in prison plus a fine if convicted.

According to Nemazee’s Web site, his firm was founded in 1987, and invests in health care, insurance, real estate and other areas. The Harvard graduate “has more than 30 years of successful investing experience across numerous sectors,” it says.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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