NY jury convicts opera-loving philanthropist

By: AP
By: AP

NEW YORK (AP) -- Opera-loving philanthropist Alberto Vilar was convicted on fraud charges Wednesday for swindling investors, including the mother of actress Phoebe Cates, out of millions of dollars.

Federal prosecutors accused Vilar and a business partner of falsely telling investors their money would be safe. Instead, the men poured millions of dollars into risky technology stocks that later crashed, prosecutors said.

Lily Cates, the mother of the actress, testified that $5 million of her money was lost improperly by Vilar and co-defendant Gary Alan Tanaka.

Lawyers for both men had insisted that they were innocent and never intended to cheat or mislead anyone.

Vilar was convicted of conspiracy to commit securities, investment adviser, mail and wire fraud; and 11 other counts. Tanaka, 65, was convicted of conspiracy as well as securities and investment adviser fraud, but was acquitted on nine other counts.

Both defendants reacted calmly to the verdicts and were allowed to remain free, though prosecutors sought a hearing next week to address bail conditions. No sentencing date was set. The men could face up to 20 years in prison.

Herald Price Fahringer, Vilar's lawyer, promised to appeal. "We are deeply disappointed in the jury's verdict," he said.

Tanaka's lawyer, Glenn Charles Colton, called the verdict an "inappropriate and improper result."

The verdict represented a spectacular fall for Vilar, who gave away millions of dollars to cultural institutions and opera houses. Just months after his May 2005 arrest, London's Royal Opera House said it had removed his name from the building's atrium after he failed to honor a pledge.

Vilar became wealthy by handling money for others through his San Francisco-based investment company, Amerindo Investment Advisors Inc., which he started in 1980. Forbes magazine said Vilar was worth $950 million before the collapse in technology stocks.

But the descent of technology stocks after 2000 caused massive losses for Vilar's customers as well as his own portfolio of assets.

Prosecutors said Vilar kept up his large donations even as his assets shrunk. They said he spent $500,000 of Cates' money on a donation to his alma mater, Washington & Jefferson College, based in Washington, Pa.

Fahringer said Vilar has contributed more than $200 million to entities including cultural and medical organizations across the globe.

Cates, a 70-year-old former model, who had invested successfully with Vilar before, recalled his enthusiasm before she turned over the contested $5 million.

"He said the interest you are getting is peanuts compared to what we will make," she said.

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