All language subtitles for American Greed s05ex1 Fraudster of the Opera

In this episode of American Greed,
William Boots Del Biagio is part owner

pro hockey team, and he's living it up
at Silicon Valley.

Boots had expensive cars, expensive
homes.

But Del Biagio's skating on thin ice,
his insatiable desire to be a sports

mogul, causes him to commit a multi
-million dollar fraud.

It was really shocking how
unsophisticated the scheme was. He let

override.

It's common sense.

But first, he works his way from Cuba to
a Manhattan penthouse.

Alberto Villar embodies the immigrant
dream, or so it seems.

They had about $8 billion under
management.

And that money is funding symphonies and
operas around the world.

He is said to have made more than $200
million in pledges. But it's curtains

Villar when he pulls a scam on the
mother of a Hollywood star.

I said, Alberto, if you're smart, you
write me a check.

If you're not, you've got problems.

New York, 1998.

Alberto Villar.

A noted money manager, philanthropist,
and jet -setting patron of the arts has

just made another monumental donation,
pledging $25 million to his friends at

the Metropolitan Opera.

Over a several -year period, Villar will
pledge a staggering $200 million to

operas around the world.

Donors of his stature are simply
unprecedented.

No one person, to my knowledge, ever
gave that much to the arts.

Anywhere. But soon, Villar will be
unable to honor those pledges, and his

clients will accuse him of fraud.

Alberto Villar begins his career on Wall
Street in the 1960s. Early on, Villar

has a hunch that semiconductor
technology is the wave of the future.

In 1979, Villar starts an investment
firm specializing in technology stocks

Gary Tanaka, a financial whiz with a Ph
.D. in mathematics.

They are an unlikely pair.

You had one person who was quiet,
respectful, spoke very deferentially.

Everybody described him as a very nice
man.

Then you had Alberto, who was certainly
a much larger presence.

He's a very formal, somewhat stiff
person who is seemingly

aristocratic in his bearing.

By Villar's account, he is born in
Havana, Cuba.

His father, a prominent sugar cane
magnate, provides young Alberto with a

privileged upbringing.

But his family loses everything when
they flee Cuba during Castro's Cuban

Revolution.

By the mid -1980s, the former aristocrat
is coming back into money.

Amarindo Investment Advisors, the firm
that Villar starts with Tanaka, is doing

quite well.

As Villar tells CNBC in 2000.

At that point I said, I want to do small
stocks, very aggressive, fast growing.

And then I began to say, I think this
technology is going to be a very big

Institutional clients, such as police
department pension funds, are the bulk

Amarindo's business.

He also had a number of individual
clients, and this is where he got into

trouble. These tended to be wealthy
individuals in several cases, women that

got to know and befriended.

Lily Cates is the mother of actress
Phoebe Cates and one of Amarindo's

clients.

I was his friend.

He was like a brother to me.

In 1987, she hires Villar to invest $1
.3 million.

Over the next decade, her initial
investment balloons to $18 million.

There was no reason.

Not to trust this man.

I felt, understand that this is a
brilliant man who understands something

obviously was totally naive about.

Villar uses his charm to recruit other
private clients.

In 1985, Villar begins to assist the
Mayer family, who own a successful

department store chain in Puerto Rico.

The Mayers asked Villar to help them
invest $750 ,000.

Attorney Patrick Begos represents the
Mayer family.

The Mayer's initial impression of
Alberto was great. They thought he was

smart, very dynamic. He appeared to be
very knowledgeable in investment

and consulting.

They thought he was a wonderful guy and
had their best interests at heart.

Villar convinces them to invest in what
he calls a guaranteed fixed -rate

deposit account.

According to Alberto, it was going to
earn a fixed rate of interest.

It was going to be invested mostly in
very safe instruments like treasury

and government bonds and things like
that. And it was, most importantly, it

guaranteed. But Villar doesn't invest
their funds as promised.

Instead of bonds, he puts their money in
much riskier high -tech and biotech

stocks. But Villar's deception goes
undetected.

In fact, the Mayer family is happy with
Villar as their monthly interest

payments arrive like clockwork each
month.

I mean, that was part of what made them
so comfortable with Amarindo. They were

very dependable in those early days.

And Villar's clients continue to be
happy throughout the 90s.

They rode the tech boom right to the
top.

They put a lot of their clients' money
and their own money into...

eBay, Microsoft, Yahoo, and as we know,
they did very well.

By the mid -1990s, Amarindo claims to
manage nearly $2 .8 billion in assets.

He always said, if you can't take the
volatility, don't give me money. But if

you give me money, I'll give you the
best performance of any manager you

Mr. Villar's reputation in the industry
during the boom years was excellent. He

was considered to be a top investor. He
was rated very high.

Amarindo's prediction of the tech boom
affords Villar a life at the top.

He moved to a gigantic co -op at United
Nations Plaza, which had a 5 ,500

square foot living room.

It is absolutely the biggest marble
palace you ever saw. I mean, really,

what I call over the top, right?

Oriental rugs galore, pianos, all the
furniture is gold like you would see in

Persian palace.

His decor is inspired by his favorite
art form, the opera. And Villar doesn't

spare a single cent on his beloved
pastime.

He attends more than 100 opera
performances a year, often jet -setting

Salzburg or Vienna for a single show.

Classical music, opera.

seemed to be the one thing that Mr.
Villar loved the most.

When he talks about music, something
lights up a little bit in him, and he

becomes a little bit less serious.

While Villar spares no expense in
enjoying the opera, he also shares his

with those around him.

I was actually raised as a little
Catholic boy, and I remember the priest

the nun saying, you must give away 10%.

The childless bachelor puts several
young people through college and

lodging for family, friends, and staff.

But above all, he gave money to the
opera. He is said to have made more than

$200 million in pledges.

His donations include $45 million to New
York's Metropolitan Opera and $17

million to London's Royal Opera.

In many cases, Villar's gifts underwrite
specific productions that otherwise

wouldn't see the light of day.

Philanthropy is the lifeblood of the
arts in America.

Opera houses and orchestras and ballet
companies absolutely depend on the

largesse of the wealthy. People like Mr.
Villar are vital for them to keep these

productions on stage.

But Villar's efforts are not entirely
selfless.

In exchange for his pledges, he demands
a piece of the spotlight.

The man who says he was born into wealth
in Cuba wants to make a mark worthy of

his aristocratic heritage.

Alberto Villar was a bizarre figure, a
figure who was revered in

some quarters and ridiculed in others.

He wanted to be noticed. He wanted to be
praised. At the Met, he

persuaded them to rename the whole grant
here, the most expensive portion of the

building. He was extremely aggressive in
making sure he got recognition.

He wanted his picture in programs.

At one point, he even wanted to be
brought up on stage at the Met, which

refused to do.

By 2000, Villar estimates his net worth
at just north of $1 billion.

But the Amarillo Fund can't defy gravity
forever.

Next on American Greed.

Alberto Villar is the principal in a
high -stakes technology fund that was

worth... Once $8 billion, now it's down
to $1 .5 billion, if that.

A downturn in the tech market causes
Villar's net worth to plummet. To stay

afloat, he and his partner betray their
so -called favorite client.

She had money and they wanted it. They
found a way to get it.

During the 1980s and 90s, Alberto Vilar
and Gary Tanaka, founders of Amarindo

Investments, gamble on the Internet boom
and earn millions.

But as the new decade dawns, their luck
changes. In mid -2000, the Internet

bubble bursts.

The Amarindo Technology Fund begins to
plummet as high -tech stocks depreciate.

It was a fiscal tsunami.

You have stocks going down 80%.

So something worth ten is now worth two.

But Villar remains confident in the
market and predicts a speedy recovery.

I think the next two years will be
fabulous because the fundamentals of the

Internet are exploding and the good guys
are really doing extremely well.

Villar doesn't let the economic downturn
cool his philanthropic spending.

In 2000 and 2001, he makes a number of
large pledges, including $24 million to

the Los Angeles Opera, $5 million to the
New York Philharmonic, and $50 million

to the Kennedy Center.

Mr. Villar had a deep -seated compulsion
to give his money away.

I think he was trying to preserve his
standing, both in the social world and

the business world.

And I think it got out of control for
him.

By 2002, the rebound still hasn't come,
and Villar is in a desperate spot.

All of his money is invested in the
slumping stock market.

When that market collapsed, his own
personal wealth declined dramatically,

he simply did not have the money.

His personal expenses were immense,
including a $50 ,000 mortgage every

for his townhouse.

To get him through this liquidity
crisis, Villar turns to fraud.

In June 2002, Villar presents longtime
client Lily Cates with an irresistible

business opportunity.

Alberta basically says to me, we're
going to make more money than we've ever

dreamed of.

Bilar invites Cates to invest $5 million
in an exclusive investment fund.

Eugene Ross is Lily Cates' broker.

In 2004, he works at Bear Stearns. Lily
was being let in on the ground floor of

this really wonderful investment.

It was Lily and the two principals of
Amarillo, and no one else was being

invited in. So he made it sound like a
very exclusive investment.

Villar also promises to pay Cates an
unbelievable $250 ,000 in interest per

quarter. Cates signs on and invests $5
million.

I wasn't suspicious. I mean, I gave him
my money immediately before he made a

fortune. You know, I've got $18 million
sitting with him. The market is going

down, but you know what?

It's relative between 18 and 14 at that
point.

But Cates doesn't realize that Villar is
exploiting her trust.

When he approached Ms. Cates, he made it
seem like this was a done deal. In

fact, Mr. Villar never got approval from
the government to set up this small

business investment fund.

As soon as Lily Cates' $5 million is
wired to Villar, it's gone.

$3 million goes to an account in
Luxembourg.

$1 million goes to Villar's personal
checking account in New York.

Within two weeks, it's nearly all spent.

Some of those expenses included paying
for a dishwasher repair, paying a $14

,000 catering bill, paying for his
mortgage.

Mr. Villar also used it to fulfill
pledges he had made.

Some of the money went to his alma
mater, and other money went to the

Academy in Berlin.

Meanwhile, Lily Cates waits for a
promised interest payment.

Don't worry about it.

Bye.

September, the money will start rolling
in. That will be your first payment. And

every quarter, I will make sure you get
a quarter of a million dollars.

But the payments never come.

The cash infusion from Cates doesn't
keep Villar out of trouble for long.

In mid -2002, rumors begin to circulate.

Alberto Villar, once the most sought
-after donor within the opera world, is

financial straits.

Soon he begins to renege on a laundry
list of multi -million dollar pledges.

The opera community answers with swift
retribution.

When Mr. Villar stopped fulfilling some
of his pledges in the early 2000s, opera

companies responded by first removing
his name from their property.

If you look at it from the point of view
of the institutions, they were counting

on this money and it wasn't coming.

If the company really thought the money
was forthcoming and planned on it

accordingly, they would be in deep
distress when it didn't come, and they

I think the good that he did, all of
that was subsumed into

the fact that he wasn't meeting future
pledges, and that became the whole

Villar's investors have been happy with
his fund's performance until now.

In 2002, the Mayer family, who has $11
million with Amarindo, stops getting

monthly interest payments.

October no interest, November no
interest, December no interest.

Then in January, Amarindo notifies them
that they will no longer pay 11 %

interest as promised.

Without warning, their monthly interest
payment is cut nearly in half.

Things began to get... increasingly
desperate for them as 2003 wore on.

depending on the interest payments that
they were supposed to be getting. In

November, the frustrated mayors attempt
to redeem their entire investment

portfolio.

And they got a letter back basically
saying, you know, how dare you ask for

money back? How could you possibly
imagine that we would be able to pay you

this money that you had given us when
all of these bad things are happening in

the Internet market?

The mayors are shocked and confused by
the note from Amarindo.

It contradicts the terms of their
agreement.

Feeling desperate, the mayors hire a
private investigator to dig into

finances.

The mayors learned that there was a $25
million tax lien against Alberto,

that he owned a number of properties,
but that some of them were being

foreclosed on, that other people hadn't
been paid.

just like the mayors hadn't been paid.

A man who was once on the Forbes list of
400 richest Americans is in deep

trouble with no end in sight.

When American Greed returns, will the
fat lady sing and the curtain fall on

Alberto Villar?

In the early 2000s, Alberto Villar has
established a worldwide reputation as an

investment fund manager and patron of
the arts.

But his carefully cultivated image is
peppered with self -serving lies, lies

that go all the way back to his
childhood.

Mr. Villar always presented himself as a
victim of the Cuban Revolution.

He spoke of how his father lost his
business there, and he had to start from

nothing. In fact, some who have seen his
passport have noted that his name is

actually Albert Villar, and that he was
born in New Jersey.

When a former girlfriend suggests Villar
has lied about his past, Villar sticks

to the story, offering an explanation
for the New Jersey birthplace.

He said he was born there when his
parents were in the States on a business

trip. There are other people who know
him who say that, in fact, he spent most

of his life in Puerto Rico. It's hard to
understand the extent of the deception.

His deceit also encompasses the
purported billionaire's personal

In 2004, a private investigator hired by
an unhappy client discovers Villar owes

more than $20 million in back taxes.

Billy Cates, a longtime friend and
client of Villar, is shocked by his

explanation of the tax lien.

He says to me, everybody knows that the
U .S. government wants whatever, but

they will settle ten cents on the
dollar. All you have to do is write them

letters and then pay your taxes.

I said, Alberto, you mean I'm the stupid
one who's paying her taxes and doing

tax planning, and you're smart, and
you're avoiding taxes? Is that it?

He says, well, only stupid people pay
their taxes.

Shortly after hearing this, Kate begins
to worry about her investments with

Amarindo. She calls her Bear Stearns
broker and asks for assistance.

Lily asked me to review her statements
and see if I could see anything that was

out of line.

Or that would raise a red flag.

While reviewing Kate's Amarindo
statements, he discovers a $175 ,000

from Kate's account to an Amarindo
account.

The transfer apparently has been
greenlit by Lily Kate's signature on

letter of authorization.

And I said, did you sign it? I said, it
has your signature on it. She said, no.

Kate and Ross fear that her signature
has been forged.

So now we know things are going on.

Proof we need. Now this is strategy. I
want to get Gary, and I want to get

Alberto, and in the same room, at the
same time, and I need a witness.

Kate and Ross go to Villar's Park Avenue
office to get an explanation.

Ross asks about the letter of
authorization, or LOA.

I says, can you explain to us what that
journal per LOA is, moving money from

Lily's account? And he said, well,

He looks at it for me and he goes, well,
you have a lot of accounts. I said, I'm

sure you do, but what account is that
one? Maybe this will refresh your

So I hand him the letter of
authorization signed by Lily and Gary

basically say to Gary, how did my
signature get on with yours? And Gary

I don't know.

The meeting is a waste of time.

Kate's questions go unanswered.

and she is left with a growing sense
that something is very wrong.

I said, Alberto, we have a problem.

I said, if you're smart, you write me a
check.

If you're not, you've got problems.

Over the next few months, Villar dodges
Kate's repeated inquiries into the

suspicious money transfer.

Frustrated by Villar's conduct, in
February 2005,

Cates demands to liquidate her entire $9
.7 million investment in Amarindo.

He enters in detail in so many
dimensions that even my lawyers can't

out what's going on. They know how to
manipulate confusion upon confusion and

have you going around in circles. It's
like a dog chasing its own tail. But

Cates isn't going to take this lying
down.

I would start myself as street smart.

And I wasn't going to take anything
anymore from anybody at this point in my

life. In spring 2005, Cates files a
complaint with the Securities and

Commission. Meanwhile, the U .S.
Attorney's Office in Manhattan launches

criminal investigation.

They have smoking gun evidence of fraud
in Cates' forged signature, which they

believe was cut and pasted from another
document.

On May 26, 2005, Alberto Vilar and Gary
Tanaka are arrested and later charged

with mail and securities fraud.

The charges stem from the theft of $5
million from Cates. But as the Justice

Department digs deeper, the case grows
to include five investors who had been

defrauded out of $20 million.

Vilar's dramatic fall from grace is the
talk of the town.

Opera people are...

by nature, gossips.

So you heard the entire gamut of
everything from that he was a criminal

stolen the money to he was a poor victim
of the recession and a bad economy.

With less than $10 ,000 in his bank
account, Villar is unable to post a $10

million bail.

The man who lives in a home described as
a palace is sent to the Metropolitan

Correctional Center, the most notorious
jail in the city.

As he awaits trial, Villar complains
that the art community has abandoned

Mr. Villar expressed a pretty strong
sense of disappointment, maybe even

resentment, that the friends that he had
or people that he considered his

friends didn't come forward to support
him, either with a statement or even

a message of support.

In September 2008, the federal criminal
trial finally begins in Lower Manhattan.

Throughout the proceedings, Villar and
Tanaka maintain their innocence.

They claim they didn't really steal the
money.

There's enough money in their frozen
accounts to make their alleged victims

whole. The irony of ironies is there's
still enough funds, money sitting in

certain bank accounts to pay everyone
back so that these people probably will

not lose a penny on their investment.

But the government isn't impressed by
that fact, and neither are Villar's

investors.

To me, that's exactly like somebody
walking out of your house with your TV

getting caught with your TV set, and
saying, well, here it is, I'll give it

to you, so I didn't really steal it in
the first place.

The jury didn't buy it, the government
didn't buy it, the judge didn't buy it.

On November 19, 2008, Villar is found
guilty on 12 counts of fraud.

Tanaka is convicted on three of 12
counts.

I believe the justice system did exactly
what they were supposed to do, and I'm

very happy with the outcome.

On February 5, 2010, Villar is sentenced
to nine years in prison.

Gary Tanaka receives five years in
prison.

Despite his dramatic fall, Alberto
Villar leaves behind a complicated

Despite his disgrace, both in the arts
world and his disgrace as a convicted

felon, I think there's no question that
Mr. Villar was one of the major donors

of the 1990s in the arts world. His
contributions to the arts are

Nobody before, nobody after, no one
single person.

Though he can't fulfill all his pledges,
Villar reportedly gives away nearly

$100 million of money earned
legitimately.

Still, Vilar's crimes devastate the
lives of his victims.

The Mayer family has its entire fortune
invested in Amarindo and is still

awaiting the government to distribute
restitution.

They've spent the last six years without
access to virtually all of their money.

They've been forced to sell anything
they can sell. They're kind of living

almost a hand -to -mouth life right now.

As for Lily Cates, she believes the
final bow in this drama should be taken

the prosecutors who bring Villar and
Tanaka to justice.

I'm happy to pay my taxes, because it
wasn't for my paying the taxes, those

wonderful people, the policemen, the
firemen, the people who put their lives

the line, the Justice Department, the
Alberto Villars and the Gary Tanakas

be out there taking advantage of other
people.

Next, a Silicon Valley venture
capitalist defrauds lenders out of $100

January 2008.

William Del Biagio attends the National
Hockey League All -Star Game in Atlanta,

Georgia. Del Biagio, or Boots as he's
known to friends, is a brand new

owner of the Nashville Predators.

Del Biagio is the picture of success.

He was well -liked. He was charismatic.

He was always sharply dressed.

In addition to being a part owner of the
Predators, he runs several Silicon

Valley investment funds with over $19
million under management.

But just a few months later, this image
will be shattered when Del Viaggio is

revealed as a fraudster and a multi
-million dollar scam is exposed.

The story of William...

Boots Del Biagio's rise and fall begins
in San Jose, California, in the heart of

Silicon Valley.

In 1992, at the age of 23, Del Biagio
founds a bank with his father.

The bank was really successful, and
Boots, as a result of its success,

developed a reputation as a smart and
savvy businessman very early on.

Four years later, he and a business
partner launch a venture capital firm

Sand Hill Capital.

Their timing is perfect.

It was an exciting time to be in San
Francisco and in Silicon Valley.

This was the dot -com heyday. This was
the time period where young people were

coming up with ideas for anything that
was tech -based, and they were just

seeing the value of those ideas
appreciate immensely.

Del Piaggio and his partner raised $8
million to start the Sandhill Capital

Investment Fund.

Attracting investors is easy for Boots.

Boots was a very charming person.

I think he was able to attract people
with a lot of wealth. He was a salesman

without being too salesman -y, if you
can say that word.

He was just a very trusting individual.

Sandhill Capital is enormously
successful, earning 900 % returns for

investors. Their biggest paydays come
when clients like ShopNow .com,

.com, and Zoom .com have successful
public offerings.

He was two for two.

Heritage Bank was a great success.

Sand Hill Capital was a great success.

Everyone really thought, this guy is
very, very talented.

He'd done this all before the age of 30.

In 2001, Del Biagio attracts the
attention of Greg Jameson, the president

CEO of the San Jose Sharks, the city's
first major league sports team.

When Jameson learns that the owners are
interested in selling the Sharks, He

invites Boots to join a group of local
investors who are raising funds to buy

the team.

Del Biagio seems like an all -star
addition to their lineup.

Greg Jamison knew about the family, and
he knew about Boots' business success,

and thought he would be a logical fit
for the ownership group.

In February of 2002, Del Biagio buys a 2
% share of the San Jose Sharks.

Despite his minority status, he loves
the benefits that come with ownership.

He had access to suites. He had access
to club seats. He had access to

That was really his first taste of what
hockey ownership was like.

Capitalizing on his reputation, Del
Viaggio strikes out on his own and

several new investment funds over the
next few years.

Del Viaggio taps his personal Rolodex
for potential customers.

He was friends with everyone in San Jose
because he'd grown up in Silicon

Valley. Everybody trusted him.

The bulk of Boots' clients are mom -and
-pop investors whose contributions range

between $10 ,000 and half a million
dollars.

A lot of the investors were just your
typical middle class.

Americans that were investing with Boots
for their children's college education

or just for they were retired and they
were using the interest to live off of.

Boots uses his charm and track record to
gain their confidence.

Ron Wills, a salesman from Folsom,
California, is a novice investor who was

looking for a safe investment option for
his nest egg.

I had a couple hundred thousand dollars
to...

trying to use to support myself and
supplement my income.

And my goal was to hang on to the
principle and use that money to generate

enough revenue to have a positive effect
on my lifestyle.

Wills learns about Del Viaggio's fund
through his financial advisor.

I was presented a booklet kind of
outlining the investment, anything that

offers to pay you 10%.

It made a lot of sense for me.

Wills invests $215 ,000.

For the next two years, the investment
works as advertised, and Wills enjoys

extra cash.

It was a huge difference. It allows you
to be a little more generous with your

family and your kids and allows you to
have the opportunity to just live a

little and enjoy life a little better.

Wills never meets Del Piaggio, the man
behind the fund.

But if he did, he'd realize that Boots
is more interested in his other passion,

professional hockey, than in money
management.

When American Greed returns, how far
will Del Biagio go to realize his dream

being a majority owner of an NHL team?

His head got too big, and as a result,
he tried to make his bank account look

bigger than it actually was.

In San Jose, California, William Boots
Del Biagio is a successful businessman

with a network of seemingly legitimate
investment funds.

Capitalizing on his success, Del Biagio
enjoys the high life in Silicon Valley.

He lives in a $3 .3 million gated
property.

He financed a lavish lifestyle that
included buying opulent homes, going on

roller gambling trips.

and funding other business ventures that
were unrelated to what he told the

investors he'd be investing in.

To get around town, Del Biagio drives a
$90 ,000 Mercedes -Benz. For longer

trips, he doesn't hesitate to charter a
private jet.

He begins to develop a reputation as a
player in the NHL.

Through his connections with the San
Jose Sharks, Boots meets celebrities and

hockey legends, including Mario Lemieux,
Luke Robitaille, and Mike Arruzzione.

Given his lavish lifestyle, Boots has no
problem fitting in with these wealthy

professional athletes.

Boots was just kind of living that
lifestyle, and so when they encountered

they took him at face value and said,
okay, this is a man of wealth, this is a

man of accomplishment.

You know, he had private jet access, he
had cars, he had homes, he had

everything you would expect.

In 2004, Boots and his new friends
purchased the River City Lancers, a

league team based in Omaha, Nebraska.

But Del Biagio thinks he's too big for
the minor leagues.

It's almost like ladder rungs. He's
climbing up these little mini ladders,

then the next rung on the ladder is
really becoming a majority owner and a

In 2007, a group of Nashville investors
are raising funds to purchase the

Predators. There is one problem.

They are $30 million short.

The group invites Boots to invest with
them.

Boots likes the idea, but there is one
big problem.

Boots did not have the financial
wherewithal to actually purchase the

needed at least $25 to $30 million to
come up with an initial down payment,

he didn't have the money.

But Boots doesn't let this get in his
way.

Del Biagio became blinded by greed. I
think he wanted to make a name for

as a majority owner of a national hockey
team. And when the Nashville Predators

was offered to him, he couldn't say no.

Del Biagio devises a scheme to secure
loans from creditors using falsified

statements. To pull it off, he needs an
inside guy.

Mr. Del Biagio needed an individual who
could provide him with...

Brokerage account statements. And he
needed an individual that could do this

a regular basis.

Scott Cushone works at Merriman Curran
Ford & Company, a boutique brokerage in

San Francisco.

Del Biagio was Cushone's biggest client.

Cushone agrees to help Boots in order to
keep his most important customer happy.

Cushone sends customers' account
statements to his personal email.

Then he forwards the statements to
Boots.

Boots would take the statements and cut
and paste his name onto them, and then

apparently PDF'd those statements so
that it appeared like they were his own.

Over the next several months, Boots
applies for nearly a dozen loans,

two loans from Heritage Bank of
Commerce, the bank Boots formed with his

He submits copies of the doctored
statements as proof of his financial

condition. It looked like Del Biagio was
a man of significant means.

It looked like he had $25 -plus million
in assets to guarantee the loans that he

was seeking, when the reality was he had
a fraction of that.

In the course of just a few months, Del
Biagio secures more than $45 million in

loans from 10 separate lenders.

He also got two other banks to guarantee
other loans that he had made to the

tune of an additional $50 million.

Del Biagio spends the money as quickly
as he secures it. He spent approximately

$25 million on the Nashville Predators,
and then the rest was spent on

his home or trips to Las Vegas or other
gambling trips

or just living life beyond his means.

The Predators deal closes in December
2007.

Boots feels like he's officially
arrived.

There was a sense of pride and
accomplishment there. He just carried

like he had really reached the point
that he'd wanted to achieve for so long.

However, this feeling won't last long.

When American Greed returns, a routine
SEC investigation exposes Del Viaggio

Cashone's scheme.

Kristen and I immediately contacted the
customers who owned the legitimate

accounts. They were shocked.

Between August 2007 and April 2008,
William Boots Del Biagio dupes 11

creditors and secures $100 million in
loans using falsified financial

statements.

It was really shocking how
unsophisticated the scheme was that Del

Cachon devised. I mean, it was literally
cut and paste and glue and PDFing

account statements to banks. So very
unsophisticated, a lot of hubris

But Del Biagio's crime won't go
unnoticed for long.

In early 2008, the SEC begins a routine
examination at Merriman, Kern, Ford &

Company, the investment firm that
handles the bulk of Del Biagio's

transactions. In the course of the
examination, the team came across emails

other documents that basically led to
his undoing.

As investigators pore over computer
records, they uncover evidence of the

scheme. The team found emails where
Cushone was emailing customer account

statements to his home, and that in and
of itself is a little odd. Typically

brokers don't do that.

The team then found emails coming back
into the firm with the same account

statements, but they now had Del
Biagio's name on them.

The aha moment was when I was reading e
-mails and discovered an account control

agreement. And when I looked at that
agreement and matched up the account

numbers, I realized that those weren't
Boots' accounts that he was using.

And at that point, everything began to
unravel that led us to conclude that

there was a fraud and probably a
criminal fraud going on.

The SEC alerts the FBI, which begins its
own criminal investigation.

When Del Biagio is contacted, he
realizes that the jig is up.

Within about a week, Mr. Del Biagio's
attorney contacted the Supreme's office

wanting to come in and go ahead and tell
us about the alleged crime.

During a series of interviews with
investigators, Boots confesses to

documents and using strangers' accounts
as collateral to secure $100 million in

loans and guarantees.

He tells authorities he was driven by an
insatiable desire to own an NHL hockey

team. He also admits to misusing
clients' money in three of his

funds. In total, Del Biagio has
defrauded his creditors out of $100

Soon, news of his legal and financial
trouble reaches his private investors.

Attorney Phil Gregory represents a group
of 35 Del Biagio investors.

Boots had expensive cars, expensive
homes, expensive jewelry for his wife.

And they were living paycheck to
paycheck or social security check to

security check. So for these individuals
to see Boots converting their hard

-earned funds into his hedonistic
lifestyle, oh my gosh, they just

believe it.

It was devastating to them.

In December 2008, the SEC files a civil
complaint against Boots for defrauding

individual investors.

We wanted to make sure that he wasn't in
a position to harm investors in the

future. We also wanted to make sure that
his fraud was made public so that the

investors he had harmed could seek
recourse and find other options.

That same month, the U .S. Attorney for
the Northern District of California

charges Del Viaggio with one criminal
count of securities fraud for falsifying

loan applications.

Boots pleads guilty.

In September 2009, William Boots Del
Viaggio is sentenced to eight years in

jail. He was also ordered to pay $67 .5
million in restitution.

Scott Cashone also pleads guilty to one
count of securities fraud and is

sentenced to five years in prison.

Boots is currently serving his sentence
at Lompoc Federal Prison in California.

Life will never be the same for him or
his victims.

I just don't do the things I used to do.
I can't. It's tougher to get the bills

paid every month.

Well, the emotional toll is incredibly
devastating because these individuals,

the retirees, have had to wonder where
their next meal is coming from.

Life is completely different than they
envisioned it because they put their

money with Del Biagio.