Former Kings Owner McNall Gets Prison Term

Former Los Angeles Kings owner Bruce McNall, once considered one of the country’s most powerful and progressive sports executives, was sentenced Thursday to nearly six years in prison on fraud charges and ordered to pay $5 million in restitution.

McNall, 46, was the admitted leader of more than a dozen participants in a wide-ranging, decade-long scheme to defraud six banks, securities firm Merrill Lynch & Co. and the Kings of more than $267 million. He will surrender on March 10 and is expected to be sent to the federal minimum-security prison in Boron.

“In some ways, it’s a relief,” McNall said, standing outside the federal courtroom in downtown Los Angeles. “The last 2 1/2 years have been like living in purgatory. But any time you face incarceration, it’s not something you look forward to.”

Less than three years ago, McNall was arguably one of the most powerful men in sports. A former chairman of the National Hockey League’s Board of Governors, he gained fame and acclaim when he acquired superstar Wayne Gretzky from the Edmonton Oilers in 1988. With Gretzky on hand, he was able to merge the glitz of Hollywood with hockey.

But McNall’s increasing financial troubles included a series of lawsuits in 1994, which were followed by bankruptcy and a federal criminal investigation into his banking practices. In all, 11 other McNall business associates have pleaded guilty to various charges, including one earlier this week.

Federal prosecutors had pressed for a stiffer sentence for McNall, recommending a prison term of eight years and restitution of $26.7 million.

But the sentence was reduced by U.S. District Judge Richard A. Paez, who noted McNall’s “extraordinary acceptance of responsibility” and his significant assistance to bankruptcy trustee R. Todd Neilson and his lawyers.

Under sentencing guidelines, McNall will be required to serve 85% of his prison term, which would be 59 1/2 months.

“You’ve had quite a history here in L.A.,” said Paez, who accepted McNall’s guilty plea more than two years ago to two counts of bank fraud and single counts of conspiracy and wire fraud.

“I’ve read a lot about you. As I said earlier, you’re a man of many talents, but this was quite a serious matter that took place over a long amount of time, affecting a lot of people, involving a lot of money and a lot of banks. I also have to take that into consideration.”

McNall’s defense attorney, Tom Pollack, and bankruptcy attorney, Richard L. Wynne, said they were pleased at the judge’s recognition of McNall’s assistance to the bankruptcy trustee in the case.

“Bruce is a different person than he was 2 1/2 years ago,” Wynne said. “You can’t get over there were serious criminal acts. He did do things and he’s paying the consequences. You can’t fake 2 1/2 years of work.”

Assistant U.S. Atty. Peter S. Spivack had objected in court to McNall’s “blame-shifting.” He was asked afterward whether the former King owner had finally assumed his share of the blame. “I’ll let what he said speak for itself,” Spivack said.

The man who brought Gretzky to Los Angeles in what was considered the NHL’s biggest trade looked drawn and shaken as he addressed Paez before the judge passed sentence.

He apologized for his conduct to the banks, bank officers, his co-defendants, friends and attorneys. His voice broke when he spoke of his two children, talking of their embarrassment at his travails, saying: “I can’t believe I have to apologize to my own children.”

The criminal activity involved creating phony financial statements as far back as 1984, supplying fake inventories of valuable coins in order to secure loans, diverting money from King ticket proceeds and a Merrill Lynch coin fund. Even Gretzky was deceived as McNall and his associates improperly pledged a horse co-owned with Gretzky to a bank without telling the hockey player.

Paez itemized the list of restitution to the various financial institutions. It includes: Bank of America, $890,000; European American Bank, $590,000; Credit Lyonnais, $2.265 million; First Los Angeles Bank, $295,000); IBJ Schroeder, $175,000); Bank of California, $260,000; and Merrill Lynch, $310,000. Four other banks are to receive restitution in amounts under six figures.

King executive and goalie legend Rogie Vachon, who put up bail for McNall more than two years ago, was asked whether his former boss would be remembered more for bringing Gretzky to Los Angeles or for his highly publicized felonies.

“Maybe for both,” Vachon said. “He couldn’t say no to anybody. That was his biggest fault, his biggest downfall. I’m not defending him. He did a lot of things that were wrong, and now he’s going to pay. He just never said no to anyone. And it was maybe a little too easy for him to get the money [in the first place].”

“He expressed regret about a lot of things,” Vachon said. “He would say, ‘If I had this to do over again I’d do it in a different way,’ and things like that. No question, he has a lot of regrets. But at least now he feels, ‘I can pay my dues.’ ”

Said McNall: “Humans do good and bad things. I’m proud of some of the things I did. This is not one of them.”

Times staff writer Helene Elliott contributed to this story.