Financier sentenced to 8 years in prison
A federal judge Tuesday 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 a pro hockey team.
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 $4-million gambling debt.
Del Biaggio pleaded guilty to one charge of forging financial documents to obtain $110 million in loans from several banks and two National Hockey League team owners -- Craig Leopold of the Minnesota Wild and Los Angeles Kings owner AEG. Del Biaggio used the money to purchase a controlling interest in the Nashville Predators.
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 Securities and Exchange Commission, 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 presented them to the banks and NHL owners as collateral. Auditors examining Merriman’s books uncovered the fraud last year. Cacchione has pleaded guilty to one fraud charge and is slated to be sentenced Sept. 29.
Henry Tang, Merriman’s chief financial officer, on Tuesday told U.S. District Court Judge Charles Breyer that the scam cost the San Francisco-based company $10 million in legal fees and forced it to reduce its staff from 188 employees to 85. Tang said the publicly traded company’s share price has tumbled because of Del Biaggio’s actions, wiping out $43.4 million in market capitalization.
Breyer ordered Del Biaggio to pay back eight banks and the two NHL owners a combined $47.5 million. One of the victim banks is Heritage Bank of Commerce, which Del Biaggio co-founded with his father nearly 20 years ago. The judge ordered Del Biaggio to pay the bank $4.8 million.