(Updates with details from hearing, background on the case)
By Nate Raymond
NEW YORK, April 24 Money manager and arts patron
Alberto Vilar was resentenced on Thursday to 10 years in prison,
a year longer than previously, in connection with his 2008
conviction for fraud and money laundering.
U.S. District Judge Richard Sullivan in Manhattan, who had
imposed the original sentence, said a longer term was justified
because Vilar had taken steps to prevent victims from being
repaid. Two victims have died waiting to get their money back,
Sullivan also sentenced Gary Tanaka, Vilar's business
partner at the now-defunct Amerindo Investment Advisers Inc, to
six years in prison for securities fraud and conspiracy charges,
also a year longer than previously.
"I have to agree with the government, that the defendants'
conduct was designed at every step to punish investors,
particularly those who testified against them at trial,"
The longer sentences came after a federal appeals court last
August ordered both defendants resentenced in light of an
unrelated 2010 U.S. Supreme Court decision that affected how
punishments should be calculated.
It is unclear whether the defendants will appeal the new
sentences. Lawyers for the defendants declined to comment,
though Vivian Shevitz, Vilar's lawyer, at the hearing said
claims he stood in investors' way of getting repaid were
"completely untrue and unfair."
The proceeding likely ensures several more years of jail for
Vilar, 73, who except for a year on bail has been incarcerated
since December 2008.
Dressed in blue prison scrubs, Vilar chose not to make any
statements during Thursday's hearing. He had once donated
millions of dollars to organizations including the Metropolitan
Opera and the New York Philharmonic.
Prosecutors said that beginning in 1986, Vilar and Tanaka,
70, engaged in a fraudulent scheme investing in risky stocks
against Amerindo clients' wishes, and offering high returns by
investing in a sham product in guaranteed fixed-rate deposits.
At its height, Amerindo had $10 billion under management,
with investments in Microsoft Corp, Cisco Systems Inc
, Intel Corp and other technology stocks.
Prosecutors contended that after the tech bubble bust in
2002, Vilar and Tanaka were in deep debt and stole client money
to pay their bills.
The case largely centered on a single investor, Lily Cates,
mother of "Fast Times at Ridgemont High" actress Phoebe Cates,
who testified to being swindled out of $5 million.
At Thursday's hearing, Sullivan also ordered a new set of
financial penalties for Vilar and Tanaka, in light of a
directive by the 2nd Circuit to recalculate how much they should
pay in restitution and forfeiture.
Sullivan ordered Vilar and Tanaka to forfeit $20.6 million,
down from the previous $54.4 million, and pay more than $20
million in restitution, down from the original sum of $34.9
But the judge increased the amount of fines the Vilar and
Tanaka must pay to a joint sum of $10 million. Fines last time
were set at $25,000 for Vilar and $20,000 for Tanaka.
Sullivan has yet to decide how much to order Vilar and
Tanaka to pay in penalties and disgorged gains in a related
civil case by the U.S. Securities and Exchange Commission.
That regulator is seeking $21 million in disgorgement, to be
offset by any amount ordered as restitution in the criminal
case, plus $20.5 million in penalties.
The case is U.S. v. Vilar et al, U.S. District Court,
Southern District of New York, No. 05-cr-00621.
(Reporting by Nate Raymond in New York; Editing by Leslie Adler
and Lisa Shumaker)