Del Biaggio jailed 8 years for fraud
Former Nashville Predators owner William (Boots) Del Biaggio will spend the next eight-plus years behind bars for fraud.
Del Biaggio was sentenced Tuesday to more than eight years in prison and $67.4 million US in restitution for misappropriating funds from banks and investors, notably Minnesota Wild owner Craig Leopold and Los Angeles Kings owner AEG.
"I was blinded by pride and ego," Del Biaggio said tearfully in a San Francisco courtroom.
"Everyone makes mistakes. I will come back from this and I refuse to let this define my life."
Del Biaggio pleaded guilty in February to forging financial documents to obtain $110 million in loans used to purchase a controlling stake in the Predators.
He replaced the names of wealthy stockholders with his own and presented the forged account statements to the banks and NHL owners as collateral.
Del Biaggio had an accomplice in David Cacchione, a stockbroker with Merriman Curhan Ford Group Inc. who owed him $2 million. Cacchione e-mailed confidential statements detailing the stock holdings of Merriman clients. Del Biaggio doctored the statements and presented them as collateral to obtain fraudulent loans. Auditors examining Merriman's books uncovered the scam in 2008. Cacchione has pleaded guilty to fraud and will be sentenced Sept. 29.
Merriman CFO Henry Tang told the court Tuesday that the scam cost the company $10 million in legal fees and forced it to reduce staff from 188 to 85. Tang said the publicly traded company's share price tumbled to a point where it has wiped out $43.4 million in market capitalization.
District Court Judge Charles Breyer ordered Del Biaggio to repay $47.5 million to the two NHL owners and eight banks, including the Heritage Bank of Commerce he co-founded with his father nearly 20 years ago.
Del Biaggio also must repay the business associates and childhood friends he bilked out of nearly $20 million in individual investments like retirement funds and nest eggs for their childrens' education, part of a Ponzi scheme that fueled his lavish lifestyle.
"A betrayal of trust is an awful thing," Breyer said. "I don't care if you can pay back everything. This will never leave you and that is the real punishment here."
Breyer said Del Biaggio's co-operation with investigators knocked more than 10 years off his sentence.
Del Biaggio has filed for bankruptcy and many of his assets, including his interest in the Predators, will be sold by court order.
He bought a two per cent share of the San Jose Sharks in 2002 and, two years later, he partnered with Pittsburgh Penguins owner Mario Lemieux and Los Angeles Kings president Luc Robitaille in purchasing the Omaha Lancers of the United States Hockey League.
With files from The Associated Press