The judge called him a liar and his victims labeled him a cheater and a sociopath. The defendant offered up an apology, read aloud by his lawyer, and accepted his prison sentence in silence.
Deepal Wannakuwatte, the former owner of the now-defunct Sacramento Capitals professional tennis team, was sentenced to 20 years in prison Thursday for perpetrating one of the costliest Ponzi schemes in the region’s history. Prosecutors say Wannakuwatte conned his victims into investing in a West Sacramento medical supply company whose revenue was just a fraction of what he claimed.
The sentence wasn’t a surprise; it matched the terms of a plea agreement Wannakuwatte made with prosecutors in May. But the hourlong hearing in U.S. District Court didn’t lack for drama. Nine of his victims made statements to the court, either in person or by letters read out loud by the prosecutor. They all painted a picture of a man who preyed on mostly elderly investors and duped many of them out of their retirement savings.
One spoke about having to delay retirement and sell his house to make ends meet. Another submitted a poem that called Wannakuwatte a “miserable soul.”
The most striking moment came when Ron Ashley of San Rafael, who lost $22 million in the decadelong scheme, turned away from U.S. District Judge Troy Nunley to look directly at Wannakuwatte.
“Deepal, you are a sociopath,” he said. “You are a liar, a serial liar. A thief, a serial thief.”
Wannakuwatte, dressed in his orange Sacramento County jailhouse uniform, sat at the defense table and stared at the floor as Ashley berated him.
Michael Hooper, a Carmichael man who lost more than $200,000, recalled how Wannakuwatte ingratiated himself with his victims. When Hooper’s mother died four years ago, Wannakuwatte attended the funeral.
“He shows up at a funeral populated by people he was stealing from,” Hooper said.
Nunley was unsparing as well, calling Wannakuwatte a liar and adding: “You’re an evil person, there’s no way you can get around that.”
Later, Wannakuwatte stood silently as defense attorney Philip Cozens read a letter from his client in which Wannakuwatte apologized to his victims and said he had shamed his family and his Sri Lankan roots.
“I ask forgiveness,” said Wannakuwatte, who will be eligible for parole in 17 years.
Wannakuwatte, who turns 64 next week, has been in jail since February on charges of taking banks and individual investors for more than $100 million. Prosecutors said he persuaded his victims to invest in his West Sacramento medical supply company, International Manufacturing Group, by telling them he had contracts worth $100 million to sell latex gloves to veterans hospitals.
In truth, the government contracts were worth only $25,000. Court records show that the company’s revenue last year totaled less than $5 million.
He pleaded guilty to a count of wire fraud in May. Among his victims were banks, an Indian tribe in Washington state, as well as roughly 150 individuals.
Wannakuwatte has filed for bankruptcy protection. Although the government has initiated proceedings to seize his home in South Land Park, vacation properties in Hawaii and on the Oregon coast, and other assets, it’s considered unlikely that victims will receive more than pennies on the dollar.
“There’s no way I can make the victims whole,” Nunley said.
Prosecutors have said the net loss to investors came to $109 million. Wannakuwatte filed court papers this week saying the loss was really somewhere between $50 million and $80 million. A hearing has been set for Jan. 15 to sort out the discrepancy.
Wannakuwatte was born in Sri Lanka and moved to Georgia to play tennis in college. After college, he moved to Sacramento, started his company and became a fixture on the area’s tennis scene. After the previous owner of the Capitals went bankrupt in 2011 and the team was in jeopardy, Wannakuwatte stepped in and kept the team alive.
His partner in the Capitals, a Fair Oaks man named Ramey Osborne, wound up loaning Wannakuwatte about $456,000, according to bankruptcy court records. The loss has devastated him, according to a letter from his wife, Jayna. The letter was read aloud by Assistant U.S. Attorney Kevin Khasigian.
“Deepal took full advantage of him in any way he could,” she wrote. “He is a shadow of the man. ... The fraud has aged him and I pray daily he will survive.”
Shortly before Wannakuwatte was arrested, the team announced it was moving to Las Vegas. After the arrest, the franchise was disbanded by World TeamTennis.
Wannakuwatte was supposed to be sentenced Aug. 7. But he walked into court that day and announced that he’d fired his original lawyer, Donald Heller, claiming that Heller had coerced him into pleading guilty. Heller denied that.
Experts said it would have been difficult for Wannakuwatte to withdraw his guilty plea, and his new lawyer, Cozens, announced to the court in September that his client was ready to be sentenced.
Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.