Perhaps not surprisingly, Spano rose to the defense of Bettman when the commissioner began to feel the heat over the botched Islanders sale. "The league and the banks did an enormous amount of due diligence on me," Spano told SI three days before turning himself in.
Voodoo diligence, more likely. According to the government's complaint, Joseph Lynch, a senior vice president at the Dallas branch of Comerica Bank, sent Pickett a letter last November certifying Spano's net worth to be more than $100 million. Lynch told prosecutors that letter simply reflected financial statements supplied to him by Spano that were never independently verified.
In early 1997 the government's complaint also states, Spano asked Dallas attorney T. McCullough Strother to administer Spano's trust, and identified him as the trustee. In financial records provided to the banks, Spano claimed the trust was valued at $107 million, which in turn could have led Fleet to take Spano at his word that he was worth $230 million and therefore a suitable candidate for the $80 million loan. Strother told prosecutors he never actually confirmed the existence of the funds because Spano wouldn't document them.
Then there was the monetary wild goose loosed in the aftermath of the April 7 closing of the Islanders' sale. "There were 30 ways Spano said he went about trying to pay Pickett that installment," says a source. On one occasion, another source says, Spano blamed an IRA bomb threat in the London Underground for holding up the payment. Still another time Spano cited a fire at the office from which the funds were to be sent.
Then Spano caught a case of the decimal-point yips. In early May he wired Pickett $5,000 instead of the $5 million he had promised. On June 5 a $17 million check (for the $16.8 million payment plus interest) from Spano bounced. Finally, late in the afternoon of June 17, Spano called Pickett to pass along the wire-reference number for the $17 million payment due that day. When Pickett came in the next morning, he found that Spano had sent $1,700. "With all the people watching and waiting for that payment, that was the end of the game," says yet another source.
The feints and misrepresentations outlined above make up some of the government's charges. The remainder include these allegations:
•Spano twice forged documents to keep his creditors at bay. A June 8 letter on Comerica Bank stationery claims that Spano had the funds to cover the $17 million bounced check. But a Comerica Bank executive over whose name that letter went out denies writing it, and prosecutors, calling the document an "obvious forgery," describe the fax machine markings at its top as "virtually identical" to those of a fax machine owned by Bison Group. Further, on May 22 Spano allegedly took a fax sent to him by his brokerage firm, Donaldson, Lufkin & Jenrette, and altered it to make it appear as if the firm was vouching for his having $27 million in treasury bills.
•During his three months in control of the Islanders, Spano collected at least $120,000 in management fees and spent about $220,000 from the team's operating budget. If it's determined that Spano fraudulently took title to the team, those expenses would be considered fraudulent too.
Not part of the federal case, but in keeping with the absurdist character of the tale, are the allegations regarding Spano's relationship with Lenco Holdings, Ltd., a South Africa-based firm that manufactures cookware and employs Douglas de Jager, the gentleman whom Lites remembers "cheerioing" him in 1995 when Spano was sniffing around the Stars. According to the complaint in a $4.5 million lawsuit Lenco filed against Spano in Dallas in June, Spano entered into a partnership with Lenco in '94 to sell the company's pots and pans in the U.S. Last January, Spano sent his partners evidence that he had finally made a strike: a purchase order for 270 sets of stainless-steel cookware from Nordstrom, the department store chain. Lenco promptly shipped nearly $2 million worth of pots and pans.
There was only one problem: Nordstrom doesn't carry pots and pans. According to a spokesperson for the chain, the department code indicated on the purchase order, which is now an exhibit in the lawsuit, is for women's coats. Nevertheless, Spano allegedly borrowed against the cookware venture to secure a loan of at least $1 million from Comerica Bank, which now wants to seize the pots and pans.