The U.S. Securities and Exchange Commission said William "Boots" Del Biaggio III, 41, of San Jose, used $25 million of the allegedly fraudulently obtained funds to buy an interest in the Nashville Predators hockey team and the rest to "maintain a lavish lifestyle."
Del Biaggio was charged in a civil lawsuit filed by the SEC with defrauding investors of $65 million in two separate schemes.
The SEC said that in one scam, Del Biaggio forged his name onto account statements of innocent customers of a San Francisco brokerage firm and used the statements to obtain $45 million in loans.
It said that in the second scheme, Del Biaggio misappropriated more than $19 million from individual investors he advised.
The commission said that without admitting to the allegations, Del Biaggio has agreed to accept a permanent injunction against any further fraud and pay penalties and restitution in an amount to be determined.
SEC Regional Director Marc Fagel said, "Mr. Del Biaggio exploited his reputation and relationships to defraud numerous lenders and clients out of tens of millions of dollars, bankrolling his dream of owning a professional sports team and maintaining an extravagant lifestyle."
In the criminal case filed by federal prosecutors, Del Biaggio is accused of one count of securities fraud in using the forged brokerage statements to obtain the $45 million in loans plus another $55 million of loan guarantees.
The criminal charge carries a theoretical maximum sentence of 25 years in prison if Biaggio is convicted, but the actual penalty would be lower under federal sentencing guidelines.
U.S. attorney's office spokesman Jack Gillund said no date has been set yet for Del Biaggio's first court appearance.
In June, Del Biaggio filed for Chapter 11 bankruptcy protection.
He is also the target of several lawsuits filed by banks and investment groups that lent him money.
