Dec 5, 2008 6:13 pm US/Pacific
Feds Charge Ex-Sharks Co-Owner With Fraud
SAN JOSE (CBS 5 / AP / BCN) ―
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William "Boots" Del Biaggio III.
AP
A once-high-flying Silicon Valley financier and former co-owner of the the National Hockey Leagues's San Jose Sharks and Nashville Predators has been charged with fraud for allegedly bilking investors out of more than $100 million.
Prosecutors filed a single criminal charge against now-bankrupt venture capitalist William "Boots" Del Biaggio III in San Francisco federal court on Thursday — the same day the Securities and Exchange Commission filed a related lawsuit accusing the San Jose resident of using forged bank accounts from a San Francisco brokerage firm as collateral for $45 million in loans.
The SEC also accused him of bilking investors out of nearly $20 million, while the criminal charge adds an additional $35 million in bank loans allegedly obtained with bogus collateral.
The U.S. attorney's office said Del Biaggio faces a maximum of 25 years in prison if found guilty, though he probably will be sentenced to substantially less than the maximum under federal sentencing guidelines.
No date had been set yet for Del Biaggio's first court appearance, U.S. attorney's office spokesman Jack Gillund said.
Both federal agencies accuse Del Biaggio, 41, of San Jose, of using the money to "maintain a lavish lifestyle" that included "substantial gambling debts" and a $25 million stake in the Nashville Predators.
"Mr. Del Biaggio exploited his reputation and relationships to defraud numerous lenders and clients out of tens of millions of dollars, bankrolling his dream of owning a professional sports team and maintaining an extravagant lifestyle," SEC Regional Director Marc Fagel said.
The SEC indicated that Del Biaggio already has settled their lawsuit by agreeing to let a judge "determine the amount of ill-gotten gains" and other penalties he'll have to repay.
"Mr. Del Biaggio is fully committed to continuing his efforts to cooperate with the investigation and to working in a responsible manner with all relevant authorities towards a satisfactory resolution of this matter," his lawyer, Eric MacMichael, said in a statement.
In June, Del Biaggio filed for Chapter 11 bankruptcy protection. He is also the target of several lawsuits filed by banks and investment groups that lent him money.
In addition to having once owned part of the Sharks, Del Biaggio co-founded San Jose's Heritage Bank of Commerce.
(© CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press and Bay City News contributed to this report.)
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