Vail philanthropist Alberto Vilar convicted of fraud
VAIL, Colorado Alberto Vilar, once a pillar of philanthropy for opera and cultural institutions in Vail and around the world, 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, 67, and a business partner of falsely telling investors their money would be safe. The government said the men poured millions of dollars into risky technology stocks before they crashed.During the nearly two-month trial, Lily Cates, the mother of the actress, testified that $5 million of her money was lost improperly by Vilar and the business partner and co-defendant, Gary Alan Tanaka, 65.Vilar was convicted of conspiracy to commit securities; investment adviser, mail and wire fraud; and 11 other counts. Tanaka was convicted of conspiracy as well as securities and investment adviser fraud, a total of three counts, but was acquitted on nine other counts.Lawyers for both men had insisted that they were innocent and never intended to cheat or mislead anyone.Herald Price Fahringer, Vilar’s lawyer, promised to appeal. “We are deeply disappointed in the jury’s verdict,” he said.Glenn Charles Colton, a lawyer for Tanaka, called the verdict an “inappropriate and improper result.” He promised to explore all post-trial remedies, though he said he would talk to his client before deciding how to proceed.”The fact the jury acquitted nine of 12 counts demonstrated some serious indecision on the part of the jury,” Colton said.Both defendants reacted calmly to the verdicts and were permitted to remain free, though prosecutors sought a hearing next week to address whether bail conditions would be changed. No sentencing date was set. The men could face up to 20 years in prison.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.Vail and Beaver Creek, Colo., where Vilar had a home, were among his beneficiaries. He donated $7 million to rebuild a Beaver Creek theater, which was later named the Vilar Performing Arts Center. He also contributed $2 million toward revamping the Gerald R. Ford Amphitheater in Vail.Vilar became wealthy by handling money for others through his San Francisco-based investment company, Amerindo Investment Advisors Inc., which he started in 1980.Fahringer told the jury that Amerindo invested early in companies such as Microsoft Corp. and Google Inc., and that its clients included the Los Angeles police and fire departments, the Chicago police department, Cornell University and large corporations.Prosecutors said he promised clients safe and steady returns from 1986 to 2005 but then put their money in risky technology stocks. The stocks rose significantly in value in the 1990s, allowing clients including Cates to score spectacular returns.But the descent of technology stocks after 2000 caused massive losses for Vilar’s customers as well as his own portfolio of assets.Forbes magazine once said Vilar was worth $950 million, but that was before the collapse in technology stocks.Prosecutors said Vilar kept up his large donations even as his assets shrunk. They said he spent $500,000 of $5 million Cates entrusted to catch up on a pledge for donations to his alma mater, Washington & Jefferson College, based in Washington, Pa.He said Vilar has contributed more than $200 million to entities including cultural and medical organizations across the globe.Fahringer said Vilar made Cates as much as $7 million in profits on a $1.2 million investment she made in the late 1980s.Cates, a 70-year-old former model, had acknowledged during her testimony that her initial investment of less than $2 million had grown to nearly $18.5 million by 2000.It was a $5 million investment she made in 2002 with Vilar that became a major focus of the trial. Cates testified that the friendship she had developed with Vilar over the years deteriorated as the money disappeared. Still, though, she could recall Vilar’s enthusiasm at the prospects before she turned over the $5 million.”He said the interest you are getting is peanuts compared to what we will make,” she said.