Anaheim Ducks Owner Accused Of Fraud

Ken ArmerSenior Writer IMay 16, 2008

Writer's Note: This Article appears in its entirety as found on Los Angles Times online. The original article is by Helene Elliott of the and the link can be found at the bottom of the article.

The owner of a Southern California-based NHL team is accused of fraud in a long-playing scheme, news that might ring a bell for anyone who watched Bruce McNall bamboozle banks and plunder the Kings' treasury before he was forced to sell up and spend four years making wallets in federal correctional facilities.

But the allegations made Wednesday against Ducks owner Henry Samueli aren't a script for Grand Theft Hockey, the Sequel.

The civil complaint filed Wednesday against Samueli and three other men by the Securities and Exchange Commission is significantly different from the misdeeds that led McNall to plead guilty to four criminal charges and forced the NHL to keep the Kings afloat until new owners could be found.

Although Samueli on Wednesday resigned as chairman and chief technology officer of Broadcom Corp., the chip-making company he co-founded, the NHL has not asked the Corona del Mar resident to step aside as owner of the team that won the Stanley Cup 11 months ago.

Nor has the league told him to sell his stake in the Ducks or the management contract for the Honda Center.

"Today's announcement has no impact on Henry's status as an NHL owner or on his ownership of the Ducks," Deputy Commissioner Bill Daly said.

"Civil litigation happens all the time. That doesn't disqualify anybody from owning a franchise, much less an NHL franchise."

According to NHL bylaws, the league can assume control of a club only if an owner were to be convicted of a criminal offense.

That hasn't happened here.

Michael Schulman, Samueli's top executive in his hockey and non-hockey ventures, said the Ducks would not be affected by the allegations that Samueli and others had backdated stock options at Irvine-based Broadcom.

"Not at all," Schulman said. "In terms of the Ducks, nothing has changed there, in terms of our operations."

In a statement released by the Ducks late in the afternoon, Schulman also said Samueli would continue to be active in matters relating to the Ducks, the arena and philanthropic activities. Samueli will also retain his post as the Ducks' representative to the NHL's Board of Governors.

Samueli and his wife, Susan, bought the arena management contract in December 2003 and purchased the Ducks from Disney 18 months later.

They're well-regarded for their hands-off policy toward personnel decisions and for their generosity. They designed and paid for jaw-droppingly lavish Stanley Cup rings that were presented to players and staff members a few months ago, and they allowed General Manager Brian Burke to assemble a payroll that brushed the salary cap in the just-completed season.

The NHL was not surprised at the complaint filed Wednesday in U.S. District Court in Santa Ana and it will watch closely as the matter goes through the legal system.

But know this: If NHL executives believed the Ducks' business operations were imperiled they would have acted swiftly, having learned the hard way that stability is vital to perception and reality.

John Rigas, facing bank, wire and securities fraud involving his family-owned firm, Adelphia Corp., was forced to relinquish his ownership of the Buffalo Sabres The club fell into bankruptcy until businessman Thomas Golisano bought the club.

Rigas was sentenced in 2005 to 15 years in federal prison.

The NHL was burned twice by owners of the New York Islanders. The league allowed John Spano to purchase the club for $165 million in 1996 and run it for more than six months before it became evident that he lacked the funds to satisfy his obligations. He later pleaded guilty to bank fraud and spent five years in jail.

Sanjay Kumar, a co-owner of the Islanders and executive of the software firm Computer Associates, was indicted for securities fraud, conspiracy and obstruction of justice in 2004 in connection with an accounting scandal. He was sentenced to 12 years in prison and ordered to pay $798.6 million in restitution. He sold his equity stake in the Islanders to his business partner, Charles Wang, who still owns the club.

Looking further back, longtime Toronto Maple Leafs owner Harold Ballard served a year in jail in the 1970s after being convicted of fraud for diverting money from the accounts of Maple Leaf Gardens to his own accounts.

And in the 1950s, a federal court dissolved the International Boxing Clubs owned by Chicago Blackhawks owner Arthur M. Wirtz and his business partner, James D. Norris, on the grounds the pair had taken a stranglehold on championship boxing bouts in the U.S.

Nice list, eh?

The NHL has an inglorious history of owners who had uncomfortable brushes with the law. Maybe because it has had so much practice and has learned to be cautious, the allegations made against Samueli Wednesday will not topple the Ducks or the league. 

Photo: From via original article by Helene Elliott as reported May 15, 2008.




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