I. Background II. Executive Summary III. Scope IV. Approach V. Findings VI. Summary VII. Impact
Background:
The fraud examination was conducted after John Spano failed to provide the money that he owed to John Pickett for the purchase of the New York Islanders. John Spano had given John Pickett $80 million of the $165 million deal. The $80 million had been through a loan that John Spano had secured through Fleet Bank. Spano was to give Pickett $16.8 million as the first installment of the deal, which never arrived. The NHL than called upon a team of examiners to audit and research John Spano’s true net worth and to figure out where his money is. When the fraud examiners started to conduct their examination they discovered quite quickly how much Spano had lied about his true net worth.

Executive Summary: The actions that were performed during the fraud examination was to get to the bottom of John Spano’s web of lies and to figure out where the money that he still owed was. John Spano had claimed to have had money in a trust from the Lloyds Bank in London and was going to have money wire transferred to John Pickett. He had also had fraudulent letters from Lloyds claiming that he did indeed have this trust fund. The actions were pretty simple in this investigation. They were to look at John Spano’s bank accounts and to investigate how much money he truly had. He had claimed to be a wealthy businessman, who was able to purchase his home in Dallas that was paid-in-full. He had also claimed to have owned other properties, and cars and jets. Upon examine his claimed assets it was discovered that Spano did not own jets or other properties and matter of fact still owed money on his home in Dallas. We would also use our actions to discover that Spano had many bounced checks and he forged documents in hopes to secure the loan with Fleet so he could purchase the New York Islanders. We interviewed many people who have been associated with John Spano in his run to own the NHL team, as well as, reviewing documents. The outcome of the examination was beneficial we were able to see the lies Spano had told right on paper. By making phone calls we were able to confirm that he did not own property in the Hamptons like he had claimed. We were also able to confirm that he did not have a trust with Lloyd and he had forging a letter from them after the bank had claimed that they had nobody named Clive Jones employed with them.

Scope: We had the determination to figure out where the money was that Spano still had to owe to Pickett. We want to find out what the hold up is for him not paying and why he keeps misplacing the decimal on his wire transfers.

Approach: The team members of the fraud examination are: Laura Liljegren, Michael Darden, Devon Peterson, and Zack Carlson The procedures that were conducted were: Interviews, review of documents such as, the fraudulent letter, bank statements. The individuals that were interviewed were: Michael Rudman, John Pickett, Mike Milbury, Shelby Spano, Denis Potvin, Jim Lites, Jim Leslie, Gary Bettman, Fleet Bank, Lloyd Bank, and John Spano.
Findings:
Tasks Performed: The task we performed was researching the documents that had been given to us in hopes to find where the Islanders went wrong in selling the team to John Spano. We also wanted to figure out how Spano was able to create so many lies in order to secure the purchase of the Islanders, as well as, being able to fool Fleet Bank to get a loan.
What was found: Upon our investigation we decided to contact Lloyd Bank to ask what the balance in Spano’s trust was and why had their employee Clive Jones had signed a letter confirming the existence of the trust and the balance of the trust. During our call to Lloyd Bank we had learned that Clive Jones was not an employee there and the letter was a fraud letter that Spano himself had forged in order to secure his ownership of the New York Islanders. Spano had also claimed to have had a $3 million home in Dallas that was paid-in-full. Upon investigating his home we had learned that he has a $1.8 million mortgage on this home in Dallas, but is overdue in property taxes of $85,000 and three weeks prior had a check bounce that was to cover the amount of overdue property taxes. Spano had also claimed to have owned property in the Hamptons, but with the help of looking at property records in the Hamptons there was never any property owned by John Spano in the Hamptons. Spano made it seem like he had mad money to spend and made claims of owning jets. Not only did he claim to own a Learjet, but he had also owned a Gulfstream as well. His jets were not his and had been chartered by the Islander’s money for operations.
Memoranda of Interviews: While conducting the interviews of those who we have listed we had asked specific questions on their relationship with John Spano and if they had noticed anything odd about Spano’s behaviors. We kept detailed notes to reach our conclusions on how we thought Spano was able to fool everyone around him.

Summary: By conducting interviews and making phone calls we were able to discover the oddities that Spano had done in order to commit fraud. We were able to get concrete information against his claims and use it against him to prove that he did not own the properties he claimed to or not even have the trust that he claimed to have.

Impact: John Spano’s fraud impacted the New York Islanders and the NHL because this team did not have an owner and the team and the NHL were now responsible to clean up the mess that Spano had left. Considering that John Pickett resumed ownership and that he agreed to work out a payment back for the loan Spano had taken Pickett ended up being out roughly $80 million from the loan, but others could consider that Pickett was technically out the $165 million deal that he and Spano had agreed upon. The damages that occurred from this is the team was able to use the money Spano claimed to have to get free agents, the fans lost out on their trust on the team and NHL, and the NHL has been criticized to even allow this to happen.