Legal News

Once Highflying Money Managers Found Guilty

By Amir Efrati

Associated Press

In this July 28, 2005 file photo, philanthropist Alberto Vilar enters Manhattan federal court in New York. (AP Photo)

The Law Blog hadn’t yet been launched when once-highflying New York money managers Alberto Vilar and Gary Tanaka were indicted on fraud and other charges for allegedly bilking investors out of millions of dollars.

The 2005 case drew so much attention that WSJ ran a Page One story on each of them. Click here for the story of Tanaka, who amassed phenomenal earnings by investing in thoroughbred horses even while the firm he ran with Vilar, Amerindo Investment Advisors, was tanking. Click here for the tale of Vilar (pictured, left), an opera patron who became known for pledging tens of millions of dollars to organizations but often didn’t pay up.)

Today the two men were convicted in Manhattan federal court. Here’s the story from Chad Bray of DJ Newswires.

Their careers came crashing down after one of their investors, New York resident Lily Cates, mother of actress Phoebe Cates, complained to federal authorities. According to the eight-count indictment, Vilar told Cates her $5 million investment in June 2002 was going into an Amerindo venture that would benefit from a federal program to promote investment in small businesses. But three years later, Amerindo still hadn’t gotten a license for such a venture. The indictment alleged that Vilar used the Cates money in the summer of 2002 for charitable contributions and personal expenses, including donations to his alma mater and the American Academy in Berlin.

Representing Vilar and Tanaka were Herald P. Fahringer and Glenn C. Colton, both of whom said their clients would appeal. Fahringer, as some LBers may recall, was scolded by U.S. District Judge Richard Sullivan for not disclosing scheduling conflicts.

Full post as published by Law Blog - WSJ.com on November 19, 2008 (boomark / email).