Original subtitles

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.