UPDATE 2-Money manager, arts patron Vilar gets 9 yrs prison

Fri Feb 5, 2010 5:12pm EST

* Vilar convicted of securities fraud

* Vilar a major arts patron, donated to opera houses (Adds Vilar's, investor's quotes)

By Grant McCool

NEW YORK, Feb 5 (Reuters) - Alberto Vilar, a New York money manager convicted of fraud in 2008 after riding the dot.com tech stock boom and donating tens of millions of dollars to the arts, education and hospitals, was sentenced to nine years in prison on Friday.

Vilar, 69, and his business partner at the now-defunct Amerindo Investment Advisers Inc, Gary Tanaka, were arrested in mid-2005 on charges of defrauding millions of dollars from investors.

In November 2008, a jury found them guilty of securities fraud after an eight-week long trial. Their lawyers said at the time they would appeal. Both men have spent the years since they were charged either in jail or under house arrest.

Vilar stood in Manhattan federal courtroom in loose-fitting blue and brown prison garb and told U.S. District Court Judge Richard Sullivan:

"I deeply regret any inconvenience our 14,000 clients might have suffered. Only five clients lost money and I am more than 95 percent confident they will be paid."

The jury also convicted Vilar, who over several decades donated some of his wealth to opera houses in the United States and Europe, of money laundering.

Amerindo had $10 billion under management at its height, with investments in Microsoft Corp (MSFT.O), Cisco Systems Inc (CSCO.O), Intel Corp (INTC.O) and other technology stocks.

Prosecutors said that after the tech bubble burst in October 2002, the partners were deep in debt and stole from clients to pay money they owed.

The judge described Vilar as a "complicated man" and acknowledged his generosity when he sentenced him.

"Nine years is a long time, particularly for a man of 69 years of age, but gives him the hope of returning to society," Sullivan said, adding, the investment world "needs to know this kind of behavior cannot be tolerated."

Sullivan was also scheduled to sentence Tanaka on Friday.

RESTITUTION

Sullivan approved a government request for payment of $21.9 million in restitution for investors. U.S. prosecutors and defense attorneys agreed that there was about $42 million frozen in an account that could be used to repay the money.

One such investor, Herbert Mayer, a retired 89-year-old Yonkers, New York, surgeon was brought into the courtroom in a wheelchair.

"I worry about the mounting debts and our financial situation is unstable," Mayer told the judge. "Alberto Vilar and Gary Tanaka were completely deceitful. In addition, very unfriendly and aloof."

Vilar donated millions of dollars to organizations such as: the Metropolitan Opera, New York Philharmonic, Carnegie Hall, the Royal Opera House in London and the Salzburg Festival in Austria.

Tanaka, 66, headed the London office of Amerindo. He, too, donated millions of dollars to the Imperial College in London, which named its business school after him. Tanaka is a race horsing enthusiast, but his lawyer denies government assertions that he owns 20 thoroughbreds.

The case is USA v Vilar et al, U.S. District Court for the Southern District of New York, No. 05-621. (Reporting by Grant McCool; editing by Andre Grenon, Leslie Gevirtz)

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