Federal Officials File Civil, Criminal Charges Against Del Biaggio

DEVIL'S IN THE DETAILS: U.S. federal prosecutors alleged that Del Biaggio financed his stake in the Predators through an "elaborate $65[M] scam he set up to also offset large gambling debts and sustain his opulent lifestyle." Court records indicated that Del Biaggio "used his investment firms' client accounts as a 'personal chequebook' and allegedly bilked more than a dozen private lenders and banks out [of] millions in loans obtained under false pretenses." The federal securities regulator in the complaint alleges that Del Biaggio in '07 "doctored the financial statements of well-heeled clients at a San Francisco brokerage firm -- obtained through his broker, a close friend -- and passed them off as his own to borrow $45[M] from various banks and a trio of private lenders." The SEC alleges that of the $45M, $25M was "spent on acquiring 27[%] ownership of the Predators, and the rest was spent on 'personal expenses.'" The indictment indicates that Del Biaggio's fraud netted $40M from investment bank CIT Group, $10M from Wild Owner and former Predators Owner Craig Leipold and $7M from NHL Kings Owner Phil Anschutz' AEG Facilities Inc. The latter two loans "appear to have been kept secret from the NHL" (GLOBE & MAIL, 12/5).

NO ADMITTANCE OF GUILT: The S.F. BUSINESS TIMES reported Del Biaggio, without "admitting or denying the complaint's allegations," has "agreed to a permanent injunction from further violations of the anti-fraud provisions of the federal securities laws." Del Biaggio also has agreed that, at a later date, the court "shall determine the amount of ill-gotten gains and civil monetary penalties that Del Biaggio shall be required to pay" (BIZJOURNALS.com, 12/4). The SEC in a statement said that Del Biaggio "didn't admit or deny wrongdoing in consenting to a court order barring him from breaking U.S. fraud laws." The SEC added that a federal judge will "impose fines and seize ill-gotten profits later." S.F.-based SEC enforcement official Michael Dicke said of Del Biaggio's case, "It's an amazing and very bold fraud" (BLOOMBERG NEWS, 12/4). In San Jose, Carey & Bailey note the charges "come after months of investigation by the SEC, the FBI and a federal grand jury." The SEC said that Del Biaggio has settled its civil complaint "by agreeing to several conditions including a pledge to repay investors an amount to be determined later in court" (SAN JOSE MERCURY NEWS, 12/5).

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