A former Ontario Hockey League team owner has been sentenced to almost 22 years in prison after pleading guilty in a U.S. court to masterminding a $130-million (U.S.) Ponzi scheme and using investors' funds to buy a private jet and a Caribbean vacation home.
A San Francisco judge sentenced William Wise to 262 months in prison after finding he misled 1,200 victims who thought they were making safe investments in certificates of deposit (CDs) paying up to 16-per-cent annual interest.
A statement from the U.S. Attorney office in California said investors' funds were not, in fact, used for overseas investments that generated the promised returns, but "were instead primarily used to enrich Wise and to make interest payments to earlier CD purchasers."
Mr. Wise, 64, is a lawyer by training and a native of Cornwall, Ont., who previously served two terms as a city alderman and owned the OHL's Cornwall Royals in the 1980s. He moved the hocky team to Newmarket, Ont., in 1992, and generated media coverage when he was fined $5,000 for spitting on a rival coach.
In the late 1990s, Mr. Wise moved to Raleigh, North Carolina, where he set up an offshore bank called Millennium Bank, which was licensed in St. Vincent and the Grenadines.
U.S. prosecutors said Mr. Wise sold bank certificates of deposit to investors through offices he set up in California and North Carolina. Sales staff told investors the CDs were issued by Millennium Bank and two related banks called United Trust of Switzerland and Sterling Bank and Trust. All three banks were founded by Mr. Wise.
Prosecutors alleged earlier investors received interest payments using funds from later investors, and Mr. Wise spent approximately $50-million of the money he collected on himself, including purchasing a private plane, a luxury property in St. Vincent, and a $500,000 wine collection.
Mr. Wise pleaded guilty to conspiracy, mail fraud, wire fraud and money laundering. He was in custody at his sentencing hearing and was ordered to start his sentence immediately.
U.S. district court judge Edward Chen scheduled another hearing for April 22 to determine how much restitution Mr. Wise will have to pay in the case.
In a 2012 interview with a Toronto Star reporter, Mr. Wise claimed he had no money left, saying, "I don't even have hundreds [of dollars] squirrelled away."
He said in the interview he agreed to turn himself in to U.S. authorities because he felt bad about what had happened, acknowledging "the result has been horrendous, horrific" for investors.
Mr. Wise's license to practice law in Ontario has been suspended by the Law Society of Upper Canada. He also separately pleaded guilty in North Carolina to tax evasion.