John Spano
Encyclopedia
John A. Spano, Jr. is a businessman and swindler who briefly bought control of the NHL
's New York Islanders
in 1997 before he was exposed as a fraud
. Due to the NHL spending a minimal amount in checking his background and an abandonment of usual banking safeguards, he was able to make it appear that he was worth several times more than he actually was.
, but spent most of his life in Madison, Ohio
, a suburb of Cleveland. He graduated from Duquesne University
with a degree in business administration in 1986 where he lived across the hall from Louie Santia. After working several sales jobs in Pittsburgh and Dallas, he founded the Bison Group in 1990. It was a Dallas-based company that primarily leased aircraft.
, but the date for the closing was pushed back several times, during which Spano began making what owner Norman Green called unreasonable demands. Green backed out of the deal in November, eventually selling the team to Tom Hicks
. Years later, Jim Lites
, the Stars' president at the time, recalled visiting Spano's mansion in the Dallas suburb of University Park
. Despite Spano's claimed wealth, Lites said the house was unfurnished. Among the "laughable" excuses Spano offered were a written agreement with the team's top minor league affiliate, the Kalamazoo Wings and a request to have his South Africa
n partners meet with Stars officials. Lites also said that Spano insisted that Lites pick up the tab for their dinners—something Lites said he'd never seen in all of his years as a sports executive.
Spano also made an abortive bid for the Florida Panthers
that year.
, which at the time earned the Islanders $13 million a year. He later agreed to buy the remaining 10 percent of the team held by the management group that had been running the Islanders' day-to-day operations since 1989.
Spano billed himself as the owner of a leasing operation that he'd built from one company with four employees to a group of 10 companies with 6,000 employees worldwide in just six years. He claimed to be worth $230 million largely based on money inherited from his wealthy grandfather Angelo. He claimed to own his University Park house free and clear; the house was supposedly worth $3 million.
Pickett and NHL Commissioner
Gary Bettman
thought that Spano would be a lifesaver for the Islanders. The once-proud franchise, best known for their meteoric rise from also-ran to four-time Stanley Cup
champions, had missed the playoffs in five of the last eight years. They had also been suffering at the gate, and rumors abounded that they were about to move to Atlanta, Nashville or Houston. Spano promised to keep the team in Long Island and either renovate, rebuild or replace the aging Nassau Coliseum. He paid for the team at signing with a loan from a syndicate of banks headed by Fleet Bank. He and Pickett agreed to a five-year installment package for the cable rights, and the league's other owners approved the sale in February 1997.
The first $16.5 million payment on the cable rights was due on April 7. The money wasn't there that day, but Spano promised Pickett it would be made, showing him a letter from Lloyds Bank
in London
promising that the money would be wired out. This was enough to satisfy Pickett, and he closed the deal.
Even before the deal closed, Spano pumped $2.5 million into the team's payroll and forced head coach/general manager Mike Milbury
to give his coach's role to Rick Bowness
. He also let it be known that he intended to be a major player in the free-agent market.
In early July, Newsday
, acting on tips from anonymous Islanders executives that their new boss was significantly less than advertised, began investigating Spano's background. On July 9, Newsday published a story that exposed Spano as a complete fraud who didn't have even a fraction of the money required to complete the Islanders deal. Among other things, the Newsday investigation revealed:
Under the terms of a mediation brokered by Bettman, Spano relinquished control of the Islanders to Pickett on July 11. In return, Pickett agreed not to sue Spano for breach of contract
. Spano later told Sports Illustrated
that a "significant" capital call and a payment on a note blew apart his plans to pay Pickett. However, he claimed that once Pickett asked Bettman to intervene and the story broke in the press, it was impossible for him to resolve the dispute.
Immediately after the Islanders deal fell apart, it emerged that Spano owed $85,000 in back property tax
es on his home.
There had been some questions about Spano even before the Islanders deal came unraveled. He'd reportedly rubbed some of the other owners the wrong way, which held up formal approval of his purchase of the team. Then-New Jersey Devils
owner John McMullen
, for instance, told Stan Fischler
(a longtime television analyst for SportsChannel New York, which owned and still owns the TV rights under the name MSG Plus) that he wasn't sure if Spano was using his own money to buy the team. Fischler also learned that Spano had promised the leader of an Islanders fan club a post as his "special advisor," but apparently didn't tell anyone with the Islanders about it. Spano had offered the team presidency to former Islanders great Denis Potvin
(who'd reportedly planned to fire Milbury altogether), but negotiations collapsed after Spano apparently told Potvin that he was running out of money. Potvin later said that Spano had almost no staff, which was unusual for a multimillionaire.
Not long after Spano's cover was blown, it emerged that he was being sued by South Africa
n cookware maker Lenco Holdings. Spano had reached a deal with Lenco to sell its pots and pans to American buyers at Nordstrom
. However, Nordstrom, then as now, doesn't sell cookware, and the department code on the purported Nordstrom purchase order was for women's coats. Spano borrowed against the venture to secure a $1 million loan from his bank, Comerica
. He was also being sued by a Dallas law firm after he hadn't paid it for legal work during his abortive run at the Stars. Had either of these suits come to light sooner, it is likely Spano's pursuit of the Islanders would have been over before it started.
charged Spano with multiple counts of bank fraud
, wire fraud
and forgery
. On August 14, federal prosecutors in Fort Worth indicted Spano with additional unrelated charges of bank fraud and wire fraud for bilking two lenders out of $5.1 million. Soon afterward, federal prosecutors in Boston
(home to Fleet) began investigating Spano regarding the $80 million loan.
Prosecutors obtained evidence that Spano had forged numerous letters from bank officials in his business dealings from 1995 onward. After Spano bounced the $17 million check, Comerica reportedly sent a letter to Pickett's attorneys saying he had funds to cover the overdraft. However, the executive who purportedly signed it denied ever writing it. Moreover, the letter was written in two different fonts, one on the body and another on the signature block. A postal inspector
found that the fax machine mark at the top of the page was an exact match to the one used by Spano's Bison Group. The fax machine mark on a letter purportedly from Donaldson, Lufkin & Jenrette
that claimed Spano owned Treasury bills worth $27 million was also an exact match to the one used by Bison Group.
It also emerged that many of the banks who gave money to Spano had abandoned their traditional safeguards. Fleet had relied on a letter from a Comerica senior vice president saying that Spano was worth over $100 million. This figure was based on what were later described as "unverified documents" provided by Spano. Additionally, a Dallas attorney claimed as trustee of a $107 million trust later told prosecutors he couldn't verify the trust's existence because Spano wouldn't document the funds. The Fleet loan officer who approved the $80 million deal was forced to resign.
Spano initially fled to the Cayman Islands
, but eventually agreed to return to the United States. On October 8, he pleaded guilty to the charges lodged by prosecutors in Long Island and Texas. He admitted that he'd planned to defraud the Islanders and Pickett, and to forging documents.
The plea deal called for him to plead guilty to bank fraud charges in Boston a week later, but several deadlines came and went, and Spano began making noises in late November about withdrawing his plea. As a result, a Boston grand jury indicted him for bank fraud, and federal prosecutors there made plans to file a superseding indictment that could have sent him to prison for 60 years. However, Spano's new attorneys resigned out of fears they wouldn't be paid, and Spano had no choice but to accept the original offer. He pleaded guilty to bank fraud on January 13, 1998.
During 1999, his wife divorced him and sold their house, and he moved to a Philadelphia condo
where he had tried to pay the rent with an expired credit card, $10,000 in bad checks and wire transfers. This led to his arrest in February, and he lost his bail.
On January 28, 2000, he was sentenced to 71 months in federal prison and ordered to pay restitution of $11.9 million to his victims, including the Islanders ($3.4 million), two Dallas businesses ($4.4 million), and Mario Lemieux
($1.25 million).
had lied to his clients and enriched himself by skimming off the union's pension fund.
The NHL was particularly shaken after it was revealed that it spent well under $1,000 evaluating Spano's credentials (estimates range from $525 to $750); most leagues spend well over $30,000 to evaluate prospective team owners. When Spano bid for the Stars, the team was satisfied by a letter supposedly from Comerica attesting to his net worth. Prospective NHL owners are now vetted by Ernst and Young and a New York City law firm.
These safeguards were not enough, however, to prevent John Rigas from buying the Buffalo Sabres
, only to have the league take over the franchise after his arrest for fraud. Seven years later, the Nashville Predators
were sold to a group that included William Del Biaggio who was later revealed to have fraudulently obtained $110 million in loans from two NHL owners and eight banks in order to purchase a stake in the Predators, a crime for which he was sentenced to eight years in prison
on September 8, 2009 and ordered to sell his share of the team.
National Hockey League
The National Hockey League is an unincorporated not-for-profit association which operates a major professional ice hockey league of 30 franchised member clubs, of which 7 are currently located in Canada and 23 in the United States...
's New York Islanders
New York Islanders
The New York Islanders are a professional ice hockey team based in Uniondale, New York. They are members of the Atlantic Division of the Eastern Conference of the National Hockey League...
in 1997 before he was exposed as a fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
. Due to the NHL spending a minimal amount in checking his background and an abandonment of usual banking safeguards, he was able to make it appear that he was worth several times more than he actually was.
Early life
Spano was originally from the Upper East SideUpper East Side
The Upper East Side is a neighborhood in the borough of Manhattan in New York City, between Central Park and the East River. The Upper East Side lies within an area bounded by 59th Street to 96th Street, and the East River to Fifth Avenue-Central Park...
, but spent most of his life in Madison, Ohio
Madison, Ohio
Madison is a village in Lake County, Ohio, in the United States. As of the 2000 census, the village population was 2,921.-Geography:Madison is located at .According to the United States Census Bureau, the village has a total area of , all of it land....
, a suburb of Cleveland. He graduated from Duquesne University
Duquesne University
Duquesne University of the Holy Spirit is a private Catholic university in Pittsburgh, Pennsylvania, United States. Founded by members of the Congregation of the Holy Spirit, Duquesne first opened its doors as the Pittsburgh Catholic College of the Holy Ghost in October 1878 with an enrollment of...
with a degree in business administration in 1986 where he lived across the hall from Louie Santia. After working several sales jobs in Pittsburgh and Dallas, he founded the Bison Group in 1990. It was a Dallas-based company that primarily leased aircraft.
Interest in Dallas Stars
On September 1995, he reached a tentative agreement to buy a 50 percent interest in the Dallas StarsDallas Stars
The Dallas Stars are a professional ice hockey team based in Dallas, Texas. They are members of the Pacific Division of the Western Conference of the National Hockey League . The team was founded during the 1967 NHL expansion as the Minnesota North Stars, based in Bloomington, Minnesota. The...
, but the date for the closing was pushed back several times, during which Spano began making what owner Norman Green called unreasonable demands. Green backed out of the deal in November, eventually selling the team to Tom Hicks
Tom Hicks
Thomas Ollis Hicks, Sr. , is an American 'leveraged buyout' businessman living in Dallas, Texas. Despite Forbes Magazine estimating Hicks' wealth at USD 1 billion in 2009, Hicks was unable to pay off joint loans of circa £200 million the following year...
. Years later, Jim Lites
Jim Lites
James R. "Jim" Lites is an American sports executive who currently serves as President of the Dallas Stars of the NHL. He was formerly the president of Hicks Sports Marketing Group, and president of the Texas Rangers of Major League Baseball, all of which are holdings of Tom Hicks...
, the Stars' president at the time, recalled visiting Spano's mansion in the Dallas suburb of University Park
University Park, Texas
University Park is a city in Dallas County, Texas, United States, and a inner suburb of Dallas. The population was 23,324 at the 2000 census. The city is home to Southern Methodist University. Like its neighbor, Highland Park, it is a city partially surrounded by the municipality of Dallas...
. Despite Spano's claimed wealth, Lites said the house was unfurnished. Among the "laughable" excuses Spano offered were a written agreement with the team's top minor league affiliate, the Kalamazoo Wings and a request to have his South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
n partners meet with Stars officials. Lites also said that Spano insisted that Lites pick up the tab for their dinners—something Lites said he'd never seen in all of his years as a sports executive.
Spano also made an abortive bid for the Florida Panthers
Florida Panthers
The Florida Panthers are a professional ice hockey team based in Sunrise, Florida, in the Miami metropolitan area. They are members of the Southeast Division of the Eastern Conference of the National Hockey League . They play their games at the BankAtlantic Center in Sunrise and are the...
that year.
Purchase of New York Islanders
In October 1996, Spano agreed to buy the Islanders from longtime owner John Pickett for $165 million: $80 million for Pickett's 90 percent stake in the team and $85 million for its lucrative cable television contract with SportsChannel New YorkMSG Plus
MSG Plus is a regional sports network in the New York City metropolitan area, whose reach expands to cover the entire state of New York, Northern New Jersey, Southwestern Connecticut, and Northeastern Pennsylvania. The network was rebranded on March 10, 2008.Like its sister network, MSG, it is...
, which at the time earned the Islanders $13 million a year. He later agreed to buy the remaining 10 percent of the team held by the management group that had been running the Islanders' day-to-day operations since 1989.
Spano billed himself as the owner of a leasing operation that he'd built from one company with four employees to a group of 10 companies with 6,000 employees worldwide in just six years. He claimed to be worth $230 million largely based on money inherited from his wealthy grandfather Angelo. He claimed to own his University Park house free and clear; the house was supposedly worth $3 million.
Pickett and NHL Commissioner
NHL Commissioner
The National Hockey League Commissioner is the highest-ranking executive officer in the National Hockey League . The position was created in 1993 with Gary Bettman as the first Commissioner...
Gary Bettman
Gary Bettman
Gary Bruce Bettman is the commissioner of the National Hockey League , a post he has held since February 1, 1993. Previously, Bettman was a senior vice-president and general counsel to the National Basketball Association...
thought that Spano would be a lifesaver for the Islanders. The once-proud franchise, best known for their meteoric rise from also-ran to four-time Stanley Cup
Stanley Cup
The Stanley Cup is an ice hockey club trophy, awarded annually to the National Hockey League playoffs champion after the conclusion of the Stanley Cup Finals. It has been referred to as The Cup, Lord Stanley's Cup, The Holy Grail, or facetiously as Lord Stanley's Mug...
champions, had missed the playoffs in five of the last eight years. They had also been suffering at the gate, and rumors abounded that they were about to move to Atlanta, Nashville or Houston. Spano promised to keep the team in Long Island and either renovate, rebuild or replace the aging Nassau Coliseum. He paid for the team at signing with a loan from a syndicate of banks headed by Fleet Bank. He and Pickett agreed to a five-year installment package for the cable rights, and the league's other owners approved the sale in February 1997.
The first $16.5 million payment on the cable rights was due on April 7. The money wasn't there that day, but Spano promised Pickett it would be made, showing him a letter from Lloyds Bank
Lloyds Bank
Lloyds Bank Plc was a British retail bank which operated in England and Wales from 1765 until its merger into Lloyds TSB in 1995; it remains a registered company but is currently dormant. It expanded during the nineteenth and twentieth centuries and took over a number of smaller banking companies...
in London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
promising that the money would be wired out. This was enough to satisfy Pickett, and he closed the deal.
Even before the deal closed, Spano pumped $2.5 million into the team's payroll and forced head coach/general manager Mike Milbury
Mike Milbury
Michael Milbury is an American sportscaster currently working as an ice hockey analyst for the New England Sports Network , Hockey Night in Canada and the NHL on NBC. He played twelve seasons in the National Hockey League , all of them as a defenseman for the Boston Bruins...
to give his coach's role to Rick Bowness
Rick Bowness
Richard Gary Bowness is a Canadian former National Hockey League right winger and currently an associate coach with the Vancouver Canucks. He played for the Atlanta Flames, Detroit Red Wings, St. Louis Blues and Winnipeg Jets and Central Hockey League, AHL and QMJHL teams...
. He also let it be known that he intended to be a major player in the free-agent market.
Revealed as a fraud
However, when the NHL's Board of Governors met in June 1997, Spano was conspicuously absent. Instead, the Islanders were represented by two men from the Pickett regime. It emerged that Spano had only paid $26,200 to Pickett for the cable rights after five attempts. On one attempt, he'd wired Pickett only $5,000 instead of the $5 million originally agreed upon. On another, a $17 million check had bounced. On another, he sent $1,700 when he was supposed to send the $17 million. Pickett asked Bettman to mediate. The commissioner ordered Spano to remove himself from day-to-day control of the Islanders and not use any team assets until the dispute could be settled.In early July, Newsday
Newsday
Newsday is a daily American newspaper that primarily serves Nassau and Suffolk counties and the New York City borough of Queens on Long Island, although it is sold throughout the New York metropolitan area...
, acting on tips from anonymous Islanders executives that their new boss was significantly less than advertised, began investigating Spano's background. On July 9, Newsday published a story that exposed Spano as a complete fraud who didn't have even a fraction of the money required to complete the Islanders deal. Among other things, the Newsday investigation revealed:
- He had grossly misrepresented his net worth: he was worth only $2 million.
- His Bison Group had 22 employees and assets of $3 million.
- He had lied about numerous items on his resume. For instance, he had claimed to have graduated from an exclusive prep school in Ohio, but had actually graduated from a small Catholic school in suburban Cleveland.
- His "inherited wealth" did not exist; neither of his grandfathers had an estate valued at more than $246,000.
- He had a $1.8 million mortgage on the house he claimed to own free and clear.
Under the terms of a mediation brokered by Bettman, Spano relinquished control of the Islanders to Pickett on July 11. In return, Pickett agreed not to sue Spano for breach of contract
Breach of contract
Breach of contract is a legal cause of action in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other party's performance....
. Spano later told Sports Illustrated
Sports Illustrated
Sports Illustrated is an American sports media company owned by media conglomerate Time Warner. Its self titled magazine has over 3.5 million subscribers and is read by 23 million adults each week, including over 18 million men. It was the first magazine with circulation over one million to win the...
that a "significant" capital call and a payment on a note blew apart his plans to pay Pickett. However, he claimed that once Pickett asked Bettman to intervene and the story broke in the press, it was impossible for him to resolve the dispute.
Immediately after the Islanders deal fell apart, it emerged that Spano owed $85,000 in back property tax
Property tax
A property tax is an ad valorem levy on the value of property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state or a municipality...
es on his home.
There had been some questions about Spano even before the Islanders deal came unraveled. He'd reportedly rubbed some of the other owners the wrong way, which held up formal approval of his purchase of the team. Then-New Jersey Devils
New Jersey Devils
The New Jersey Devils are a professional ice hockey team based in Newark, New Jersey, United States. They are members of the Atlantic Division of the Eastern Conference of the National Hockey League...
owner John McMullen
John McMullen (engineer)
John J. McMullen, Ph.D was a naval architect and marine engineer, and former owner of the New Jersey Devils and Houston Astros. He founded the engineering firm John J...
, for instance, told Stan Fischler
Stan Fischler
Stan Fischler is a hockey and New York City Subway historian, broadcaster, author and professor.For his hockey knowledge, Fischler promotes himself as “The Hockey Maven” in both local and national circles...
(a longtime television analyst for SportsChannel New York, which owned and still owns the TV rights under the name MSG Plus) that he wasn't sure if Spano was using his own money to buy the team. Fischler also learned that Spano had promised the leader of an Islanders fan club a post as his "special advisor," but apparently didn't tell anyone with the Islanders about it. Spano had offered the team presidency to former Islanders great Denis Potvin
Denis Potvin
Denis Charles Potvin is a former defenseman and team captain for the New York Islanders in the National Hockey League and cornerstone for the Islanders' four Stanley Cup championship teams in the early 1980s. His brother, Jean Potvin, was also an NHL defenseman and the brothers were teammates for...
(who'd reportedly planned to fire Milbury altogether), but negotiations collapsed after Spano apparently told Potvin that he was running out of money. Potvin later said that Spano had almost no staff, which was unusual for a multimillionaire.
Not long after Spano's cover was blown, it emerged that he was being sued by South Africa
South Africa
The Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
n cookware maker Lenco Holdings. Spano had reached a deal with Lenco to sell its pots and pans to American buyers at Nordstrom
Nordstrom
Nordstrom, Inc. is an upscale department store chain in the United States, founded by John W. Nordstrom and Carl F. Wallin. Initially a shoe retailer, the company today also sells clothing, accessories, handbags, jewelry, cosmetics, fragrances, and in some locations, home furnishings...
. However, Nordstrom, then as now, doesn't sell cookware, and the department code on the purported Nordstrom purchase order was for women's coats. Spano borrowed against the venture to secure a $1 million loan from his bank, Comerica
Comerica
Comerica Incorporated is a financial services company headquartered in Dallas, Texas, USA. It has retail banking operations in Arizona, California, Florida, Michigan and Texas; and select business operations in several other U.S...
. He was also being sued by a Dallas law firm after he hadn't paid it for legal work during his abortive run at the Stars. Had either of these suits come to light sooner, it is likely Spano's pursuit of the Islanders would have been over before it started.
Arrest and incarceration
The Newsday report revealed that a federal investigation into Spano's affairs was well underway. On July 23, federal prosecutors on Long IslandLong Island
Long Island is an island located in the southeast part of the U.S. state of New York, just east of Manhattan. Stretching northeast into the Atlantic Ocean, Long Island contains four counties, two of which are boroughs of New York City , and two of which are mainly suburban...
charged Spano with multiple counts of bank fraud
Bank fraud
Bank fraud is the use of fraudulent means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently representing to be a bank or financial institution. In many instances, bank fraud is a criminal offense...
, wire fraud
Wire fraud
Mail and wire fraud is a federal crime in the United States. Together, 18 U.S.C. §§ 1341, 1343, and 1346 reach any fraudulent scheme or artifice to intentionally deprive another of property or honest services with a nexus to mail or wire communication....
and forgery
Forgery
Forgery is the process of making, adapting, or imitating objects, statistics, or documents with the intent to deceive. Copies, studio replicas, and reproductions are not considered forgeries, though they may later become forgeries through knowing and willful misrepresentations. Forging money or...
. On August 14, federal prosecutors in Fort Worth indicted Spano with additional unrelated charges of bank fraud and wire fraud for bilking two lenders out of $5.1 million. Soon afterward, federal prosecutors in Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
(home to Fleet) began investigating Spano regarding the $80 million loan.
Prosecutors obtained evidence that Spano had forged numerous letters from bank officials in his business dealings from 1995 onward. After Spano bounced the $17 million check, Comerica reportedly sent a letter to Pickett's attorneys saying he had funds to cover the overdraft. However, the executive who purportedly signed it denied ever writing it. Moreover, the letter was written in two different fonts, one on the body and another on the signature block. A postal inspector
United States Postal Inspection Service
The United States Postal Inspection Service is the law enforcement arm of the United States Postal Service. Its jurisdiction is defined as "crimes that may adversely affect or fraudulently use the U.S...
found that the fax machine mark at the top of the page was an exact match to the one used by Spano's Bison Group. The fax machine mark on a letter purportedly from Donaldson, Lufkin & Jenrette
Donaldson, Lufkin & Jenrette
Donaldson, Lufkin & Jenrette or DLJ is a defunct U.S. investment bank founded by William H. Donaldson, Richard Jenrette and Dan Lufkin in 1959. Its businesses included securities underwriting; sales and trading; investment and merchant banking; financial advisory services; investment research;...
that claimed Spano owned Treasury bills worth $27 million was also an exact match to the one used by Bison Group.
It also emerged that many of the banks who gave money to Spano had abandoned their traditional safeguards. Fleet had relied on a letter from a Comerica senior vice president saying that Spano was worth over $100 million. This figure was based on what were later described as "unverified documents" provided by Spano. Additionally, a Dallas attorney claimed as trustee of a $107 million trust later told prosecutors he couldn't verify the trust's existence because Spano wouldn't document the funds. The Fleet loan officer who approved the $80 million deal was forced to resign.
Spano initially fled to the Cayman Islands
Cayman Islands
The Cayman Islands is a British Overseas Territory and overseas territory of the European Union located in the western Caribbean Sea. The territory comprises the three islands of Grand Cayman, Cayman Brac, and Little Cayman, located south of Cuba and northwest of Jamaica...
, but eventually agreed to return to the United States. On October 8, he pleaded guilty to the charges lodged by prosecutors in Long Island and Texas. He admitted that he'd planned to defraud the Islanders and Pickett, and to forging documents.
The plea deal called for him to plead guilty to bank fraud charges in Boston a week later, but several deadlines came and went, and Spano began making noises in late November about withdrawing his plea. As a result, a Boston grand jury indicted him for bank fraud, and federal prosecutors there made plans to file a superseding indictment that could have sent him to prison for 60 years. However, Spano's new attorneys resigned out of fears they wouldn't be paid, and Spano had no choice but to accept the original offer. He pleaded guilty to bank fraud on January 13, 1998.
During 1999, his wife divorced him and sold their house, and he moved to a Philadelphia condo
Condominium
A condominium, or condo, is the form of housing tenure and other real property where a specified part of a piece of real estate is individually owned while use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas is executed under legal rights...
where he had tried to pay the rent with an expired credit card, $10,000 in bad checks and wire transfers. This led to his arrest in February, and he lost his bail.
On January 28, 2000, he was sentenced to 71 months in federal prison and ordered to pay restitution of $11.9 million to his victims, including the Islanders ($3.4 million), two Dallas businesses ($4.4 million), and Mario Lemieux
Mario Lemieux
Mario Lemieux, OC, CQ is a Canadian former professional ice hockey player. He is acknowledged to be one of the best players of all time. He played 17 seasons as a forward for the Pittsburgh Penguins of the National Hockey League between 1984 and 2006...
($1.25 million).
Aftermath
Spano was released in June 2004 on five years' supervised release and moved to a Cleveland suburb. However, he was arrested again in February 2005 for defrauding numerous companies by promising to obtain loans for them and pocketing the fees without getting the loans. He was jailed for 51 months and released from prison on April 3, 2009.Legacy
The Spano fiasco was highly embarrassing to the NHL, which was still reeling from revelations that former NHLPA head Alan EaglesonAlan Eagleson
Robert Alan Eagleson is a disbarred Canadian lawyer, convicted felon in two countries, former politician, hockey agent and promoter...
had lied to his clients and enriched himself by skimming off the union's pension fund.
The NHL was particularly shaken after it was revealed that it spent well under $1,000 evaluating Spano's credentials (estimates range from $525 to $750); most leagues spend well over $30,000 to evaluate prospective team owners. When Spano bid for the Stars, the team was satisfied by a letter supposedly from Comerica attesting to his net worth. Prospective NHL owners are now vetted by Ernst and Young and a New York City law firm.
These safeguards were not enough, however, to prevent John Rigas from buying the Buffalo Sabres
Buffalo Sabres
The Buffalo Sabres are a professional ice hockey team based in Buffalo, New York. They are members of the Northeast Division of the Eastern Conference of the National Hockey League .-Founding and early success: 1970-71—1980-81:...
, only to have the league take over the franchise after his arrest for fraud. Seven years later, the Nashville Predators
Nashville Predators
The Nashville Predators are a professional ice hockey team based in Nashville, Tennessee. They are members of the Central Division of the Western Conference of the National Hockey League...
were sold to a group that included William Del Biaggio who was later revealed to have fraudulently obtained $110 million in loans from two NHL owners and eight banks in order to purchase a stake in the Predators, a crime for which he was sentenced to eight years in prison
on September 8, 2009 and ordered to sell his share of the team.