Broker Gets 5 Years in $100M Fraud

SAN FRANCISCO (CN) – A former managing director of a California investment brokerage was sentenced to 5 years in federal prison for his role in a $100 million fraud involving William “Boots” Del Biaggio III, owner of the NHL’s Nashville Predators. David Cacchione, of Woodside, who worked for Merriman, Curhan, Ford & Co., was charged with one count of securities fraud.




     According to the plea agreement, Cacchione gave financier William “Boots” Del Biaggio III client brokerage statements, which Del Biaggio doctored and used to obtain or renew more than $100 million in fraudulent loans. Cacchione also met with lenders to create the illusion that Del Biaggio was in charge of the client accounts, and signed false account control agreements.
     Del Biaggio was sentenced in September to 8 years in prison.
     Cacchione’s actions caused a $47 million loss, according to court documents. U.S. Cacchione, who is out on bond, was told to surrender on Jan. 8.
     Here is Courthouse News’ Dec. 5, 2008 story on Boots Del Baggio.
     Venture Capitalist, NHL Team Owner Del Biaggio Accused Of Multimillion-Dollar Scams
     By Chris Marshall
     SAN FRANCISCO (CN) – William “Boots” Del Biaggio III secured $45 million in loans by pledging as collateral securities owned by unwitting customers of a San Francisco brokerage firm and used the money to buy an interest in the NHL’s Nashville Predators and pay his personal expenses, the SEC claims in Federal Court.
     The SEC says Del Biaggio did not have enough collateral for the loans he needed to buy a $25 million ownership in the Predators. So, the agency says, an unnamed friend and personal broker emailed Del Biaggio account statements belonging to other customers. Del Biaggio put his name and address over those of the customers and sent the accounts to lenders, according to the complaint.
     The SEC claims Del Biaggio altered additional account statements to use as security for bank loans. These accounts held roughly $4 million in securities, had low margin debt and remained stable from month to month, minimizing the risk that lenders would detect the fraud, the SEC says. He allegedly ensured the scam’s success by continuing to receive copies of customers’ monthly account statements, which he altered and gave to lenders to show the collateral remained intact.
     Del Biaggio also is accused of using his reputation as founder and CEO of Sand Hill Capital, a venture capital firm, to secure $19 million in investments that he used to pay home mortgage and decorating expenses for his luxury properties and to pay off gambling debts, credit cards bills and other expenses.The SEC seeks an injunction, civil penalties and disgorgement

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