San Francisco -
A federal judge has sentenced Silicon Valley financier William (Boots) Del Biaggio III to more than eight years in prison for bilking investors and banks - including one he helped launch - out of millions of dollars in a desperate attempt to buy the National Hockey League's Nashville Predators.
The disgraced scion of a prominent San Jose family is to report to prison in January, capping a long fall for a former high roller who counted hockey great Mario Lemieux as a golfing buddy and who jetted on private planes to Las Vegas, where he amassed a US$4 million gambling debt.
Del Biaggio, also a one-time part-owner of the San Jose Sharks, was part of a group that bought the Predators from Craig Leipold in 2007 after Jim Balsillie's bid for the team fell through.
Del Biaggio pleaded guilty to one charge of forging financial documents to obtain $110 million in loans from several banks and two NHL owners - Craig Leopold of the Minnesota Wild and Los Angeles Kings owner AEG. Del Biaggio used the money to purchase an interest in the Predators. Under United States bankruptcy law, a trustee was appointed sell Del Biaggio's assets, including his stake in the Predators to pay off his creditors
Del Biaggio set his crime in motion by turning to David Cacchione, a financially strapped stockbroker at Merriman Curhan Ford Group Inc. who owed him $2 million. According to federal prosecutors and the SEC, Cacchione e-mailed Del Biaggio account statements from several wealthy Merriman clients showing tens of millions of dollars worth of stock holdings.
Del Biaggio then doctored the account statements by cutting out the clients' names and pasting in his own and presenting them to the banks and NHL owners as collateral.
Henry Tang, Merriman's chief financial officer, says the scam cost the company $10 million in legal fees and forced it reduce its staff from 188 employees to 85. Tang said the publicly traded company's share price has tumbled because of Del Biaggio's action, wiping out $43.4 million in market capitalization.
Del Biaggio is ordered to pay back eight banks and the two NHL owners a combined $47.5 million. One of the banks is Heritage Bank of Commerce, which Del Biaggio co-founded with his father.
"I did not intend to hurt anyone," a tearful Del Biaggio told the court. "I thought somehow I could pull it all together."
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