John Spano

When the NHL's Board of Governors met in June 1997, Spano was not present. Instead, the Islanders were represented by two men from the Pickett regime. Upon further investigation, it emerged that Spano had only paid a total of $26,200 to Pickett for the cable rights after five attempts.[4] 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 $17 million.[1] At the request of Pickett, Bettman 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.[4]

In early July, Newsday, acting on tips from anonymous Islanders executives that their new boss was worth significantly less than advertised, began investigating Spano's background.[2] On July 9, Newsday published a story that exposed Spano as a fraud who was not worth 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 $5 million.
• His Bison Group had 22 employees and assets of $3 million.
• He had lied about numerous items on his résumé. 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 Ashtabula.
• His "inherited wealth" did not exist; neither of his grandfathers had an estate valued at more than $246,000.

Under the terms of a mediation brokered by Bettman, Spano relinquished control of the Islanders back 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.[1][4] It also emerged that Spano owed $85,000 in back property taxes on his home.[8]

There had been some questions about Spano even before the Islanders deal came unraveled; the other NHL owners were reportedly wary of Spano well before his purchase of the team was approved. 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 Islanders' TV rights under the name MSG Plus) that he was unsure if Spano was even 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 had not informed anyone within the Islanders organization about it. Spano had also offered the team presidency to former Islanders great Denis Potvin (who had reportedly planned to fire Milbury altogether), but negotiations collapsed after Spano apparently told Potvin that he was running out of money.[4] Potvin later said that Spano had almost no staff, which was unusual for a multimillionaire.[1]

Not long after Spano's cover was blown, it emerged that Spano was also being sued by South African cookware maker Lenco Holdings. Spano had reached a deal with Lenco to sell its pots and pans to American buyers at Nordstrom; however, Nordstrom had never sold 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 Comerica.[1] He was also being sued by a Dallas law firm after it was revealed that he had not paid them for legal work during his abortive run at the Stars. Had either of these suits come to light sooner, it is likely that Spano's pursuit of the Islanders would have been over before it started.

The Newsday report revealed that a federal investigation into Spano's affairs was well underway. On July 23, federal prosecutors on Long Island charged Spano with multiple counts of bank fraud, wire fraud and forgery.[8] 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.[9] 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.[1] 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.[2] 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.[8]

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.[8] Additionally, a Dallas attorney claimed as trustee of a $107 million trust later told prosecutors he was unable to verify the trust's existence because of Spano's reluctance to document the funds.[1] 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 on Long Island and Texas, admitting to forging documents and that he had planned to defraud the Islanders and Pickett.

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 due to concerns that they would not be paid, and Spano had no choice but to accept the original offer. He pleaded guilty to bank fraud on January 13, 1998.

In 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).

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.

On August 20, 2014, Spano was indicted by a grand jury in Ohio on one count of theft and 44 counts of forgery. In a scheme that took place from June 2011 until July 2013, Spano stole from his employers Image First, which rents linens to outpatient facilities in Ohio, and its sister company London Cleaners. He pleaded guilty to charges of collecting almost $70,000 in commissions on fraudulent accounts in May 2015[10] and was sentenced to 10 years prison on June 17, 2015. He was also ordered to pay more than $75,000 in restitution to Image First.[11]