In Silicon Valley, the Ponzi scheme of William “Boots” Del Biaggio III, who pleaded guilty Wednesday to securities fraud, is causing a buzz. The New York Times reports that on Wednesday, Del Biaggio pleaded guilty to securities fraud. He has been charged with falsifying documents to obtain $100 million in fraudulent loans.
In December, as previously noted here, Del Biaggio, a former Silicon Valley venture capitalist and part-owner of the Nashville Predators hockey team, was charged by the SEC with securities fraud. The SEC complaint alleges that Del Biaggio falsified other people’s brokerage account statements to make it appear that he held securities he did not and used these statements as collateral to take out loans. The SEC also alleges that Del Biaggio set up a Ponzi scheme to mislead investors into giving him money, guaranteeing investors a 12 percent rate of return on their investment and “for several years, Del Biaggio paid clients their regular interest payments, often with funds raised from more recent clients.” That investigation is ongoing according to the SEC, the NY Times reports.
Del Biaggio reportedly will be sentenced June 10 and faces a maximum of 25 years in prison. His plea agreement calls for him to be imprisoned for six-and-a-half to eight years.