SPORTS

The fall of a King

High-flying Bruce McNall faces fraud charges

D'ARCY JENISH November 28 1994
SPORTS

The fall of a King

High-flying Bruce McNall faces fraud charges

D'ARCY JENISH November 28 1994

The fall of a King

SPORTS

High-flying Bruce McNall faces fraud charges

The Los Angeles crowd was captivated by his charm and generosity. Journalists were intrigued by his success and splashy deal-making. Bruce McNall—short, pudgy, boyish-looking and endlessly energetic—made a fortune on rare coins and professional sports. He invested in race horses and Hollywood movies. In 1988, he bought the world’s greatest hockey player—Wayne Gretzky—for his Los Angeles

Kings and brought hockey unprecedented prominence in southern California. He shook up Canadian football in 1991 by signing U.S. college sensation Raghib (Rocket) Ismail to the Toronto Argonauts for $18 million. But that was then. Now 44, McNall has watched his magic evaporate. His companies are bankrupt, his reputation tarnished—and, last week, federal prosecutors in Los Angeles charged him with four offences in defrauding several banks of nearly $300 million. McNall was also expected to step down as the Kings’ president Yet he still has his friends. ‘We have all managed to remain pals,” says Canadian-born comedian Alan Thicke. “Bruce was not as much a high liver himself as he was generous with others.” Some of McNall’s ex-employees are now paying the price. Federal prosecutors in Los Angeles have charged five of them with various

fraud offences. They have admitted that, as early as 1986, they began overvaluing McNall’s assets, and understating or concealing his debts to obtain loans for his various businesses. Two have pleaded guilty, and are expected to be sentenced in the new year, while the others have indicated that they will enter guilty pleas. McNall, who is married and has two kids, has co-operated with investigators and, according to some reports, has been attempting to negotiate a jail term. “He hasn’t turned into a recluse or lost 40 pounds,” says Harry Omest 71, a semiretired Beverly Hills businessman who sold the Argos to McNall in 1991. “But sooner or later, Bmce is going to the can, and the talk is eight or nine years.” Meanwhile, McNall is helping a bankruptcy trustee sell off the assets of his opulent Hollywood lifestyle. His properties in Malibu and Palm Springs have been sold for undisclosed sums, and his 10,000-square-foot home is on the market for $8 million. He is also parting with his cars, including a Rolls-Royce and an

Aston Martin, and the 50 thoroughbred race horses he held shares in or owned outright. The Boeing 727 jet, purchased for the Kings in 1990 at a cost of $6.8 million, fetched $675,000, and the trustee is trying to unload McNall’s 28-per-cent interest in the team—he sold the balance last May for $80 million.

McNall, raised in a middle-class LA family—his mother was a lab technician and his father a biochemistry professor—built a for-

tune once estimated at $250 million out of his childhood obsession with rare coins. By his late teens, he was a prosperous Beverly Hills dealer and, in 1974, at age 24, he paid $420,000—a world record—for a fifth-century BC Athenian decadrachma. Then, in the early 1980s, he got really rich by acting as a broker for Texas oil billionaires Herbert and Nelson Bunker Hunt who, besides trying to comer the world silver market, acquired the world’s largest coin collection.

In a story published last April in Vanity Fair, McNall admitted that many of the rare coins and antique artworks that wound up in his Los Angeles shops had been excavated illegally in Turkey or Italy by professional smugglers. He also revealed that he had on several occasions smuggled objects of cultural value out of Mediterranean countries. But in the fast-lane Los Angeles of the 1980s, the origins of his wealth were far less important than the simple fact that he had it. McNall bought about 25 per cent of the Kings in 1986 and became sole

owner in March, 1988. Six months later, he completed the Gretzky deal for $17 million. Athough Gretzky was initially bitter about leaving Edmonton and the Stanley Cup champion Oilers, he and McNall quickly became friends and partners. At the time of McNall’s bankruptcy, they were partners in four thoroughbred race horses. They also paid $450,000 for a rare 1910 baseball card of Honus Wagner, a Pittsburgh Pirate shortstop. Their most celebrated venture in Canada was the acquisition—along with the late comedian John Candy—of football’s Argos. Recently, Gretzky estimated his losses on his McNall investments at less than $2 million—but there is no indication that the Great One will become embroiled in McNall’s financial troubles. The only mention of Gretzky in the charges referred to him as an investor in a horse that McNall had used as collateral for a loan. The charges state that McNall sought the loan without his partner’s permission and falsely

represented himself to the bank as the horse’s sole owner. According to some associates, McNall’s problems were developing even as he pulled off one dramatic sports move after another between 1988 and 1992. In the early 1990s, demand for rare coins, particularly among his wealthy Hollywood clientele, began to drop. One businessman and friend, who asked to re| main anonymous, esti3 mates that McNall lost up to $200 million in the ^ movie business even 5 though his production £ company, Gladden Enter® tainment, churned out several hits, including The Fabulous Baker Boys

and Mr. Mom. “The movies and the coins did him in,” says Omest, “not the hockey club, not the horses.” But McNall’s opulent style helped hide his problems. He flew to Toronto on his Boeing 727 for the Agos’ 1991 home opener, and his guests included actors Mariel Hemingway and Jim Belushi; Dan Aykroyd led the Blues Brothers Band in a half-time performance. Before each Kings home game, McNall provided dinner for as many as 50 people at a private club in the Forum, inviting entertainers like Candy and actress Goldie Hawn, as well as his bankers. “It’s no surprise that a guy like Bmce McNall fooled the bankers,” said one former associate. “They get to sit at the owner’s table. They meet Goldie. Most bankers have never gotten close to something like this.” And, after the ignominious fall of Bmce McNall, most are probably thankful they didn’t.

D'ARCY JENISH

ANNE GREGOR