NEW YORKNEW YORK (Reuters) - An Iranian-American businessman who gave money to Democrats including former President Barack Obama should be released early from his 12-year prison term for a $292 million bank fraud and moved to home confinement, his lawyers said on Friday.

Lawyers for Hassan Nemazee, 68, who has spent nearly 8-1/2 years in prison, said he qualified for early release under a prison reform law signed by President Donald Trump last month.

The bipartisan First Step Act lets judges release to home confinement some older prisoners who have served at least two-thirds of their sentences.

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Nemazee's lawyers said their client has been a model prisoner, has a job and housing lined up for after his release, and "embodies the very paradigm" of the type of person Congress intended for home confinement.

The lawyers said the Federal Bureau of Prisons has not responded to Nemazee's request for home confinement, possibly because of the partial government shutdown, and asked U.S. District Judge Sidney Stein in Manhattan to grant it.

A spokesman for U.S. Attorney Geoffrey Berman in Manhattan declined to comment.

Nemazee, a U.S. citizen whose family left Iran after the 1979 revolution, pleaded guilty in 2010 to obtaining $292 million in loans from Bank of America Corp, Citigroup Inc and HSBC Holdings Plc by using fake documents to show he had the necessary collateral.

His criminal case was separate from his political activities. These included being a top "bundler" of contributions to Obama's 2008 presidential campaign and donating money to Hillary Clinton, who was Obama's first secretary of state and lost her own White House run in 2016 to Trump.

Other prisoners have also invoked the First Step Act to seek home confinement.

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On Jan. 7, another judge rejected that relief for Bernard Madoff's longtime secretary Annette Bongiorno, who is serving a six-year prison term over her role in her boss's Ponzi scheme, saying it was initially in the prison bureau's discretion.

The case is U.S. v. Nemazee, U.S. District Court, Southern District of New York, No. 09-cr-00902.