Vilar trial starts in NYC
NEW YORK Opening statements have been made in the fraud trial of an opera-loving philanthropist accused of lying to clients of his investment company while gambling their money on risky technology stocks.Lawyers for Alberto Vilar and co-defendant Gary Alan Tanaka said they welcomed the trial to redeem the reputations of their clients against overzealous prosecutors who filed criminal charges in a dispute they believe belongs in civil court.Monday’s opening statements offered wildly different portrayals of the 67-year-old, Cuban-born Vilar, who started a San Francisco-based investment company, Amerindo Investment Advisors Inc., in 1980.Assistant U.S. Attorney Benjamin Naftalis said the men repeatedly lied to clients from 1986 to 2005 by promising safe and steady returns even while they invested much of their portfolio in risky technology stocks that ultimately lost most of their value.Naftalis, who said Vilar’s promise to clients that their money would be safe was an “absolute sham, a complete lie,” accused Vilar of spending $500,000 of $5 million entrusted to him by investor Lily Cates to catch up on a pledge for donations to his alma mater, Washington & Jefferson College.He said another $650,000 of Cates’ investment was spent on Amerindo expenses and $3 million was used to pay back another investor who demanded her money.Both men are charged with conspiracy to commit securities, mail, wire and investment adviser fraud and money laundering. They could face more than 10 years in prison if they are convicted.Vilar’s lawyer, Herald Price Fahringer, said his client was innocent.”There was no intent to steal anyone’s money, to defraud anyone’s money,” he told the jury.Fahringer said Vilar, who was once worth nearly $1 billion, has contributed more than $200 million to entities including opera and medical organizations around the world.He said Amerindo was ranked first among 7,500 investment companies in the 1980s for its performance and second in the 1990s. He credited Amerindo for investing early in companies such as Microsoft Corp. and Google Inc., and said Amerindo’s clients included the Los Angeles police and fire departments, the Chicago police department, Cornell University and large corporations.Fahringer said Vilar met Cates in 1987 or 1988 and agreed to invest $1.2 million on her behalf, making her as much as $7 million in profits over the next four years. He said another client who prosecutors claimed lost her entire $74,000 life savings with Amerindo actually made $139,000.Tanaka’s lawyer, Glenn Charles Colton, said his 65-year-old client was battling cancer in 2003 and could not have been actively involved in some of the paperwork prosecutors say they will use to prove their case.”A man battling for his life is not directing simple money transfers,” Colton said.Colton said the way the money invested by Cates was used for other purposes was no different than when a bank accepts a $100 cash deposit and then immediately gives that cash to the next person who walks up to the teller to cash a check.”Has the bank stolen my money?” he asked. “Of course not.”
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