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UPDATE 3-Money manager, arts patron Vilar gets 9 yrs prison

* Vilar convicted of securities fraud

* Vilar a major arts patron, donated to opera houses

* Partner Tanaka sentenced to five years imprisonment (Adds Amerindo partner sentenced to five years imprisonment)

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.

A Manhattan federal court judge also sentenced Vilar’s business partner at the now-defunct Amerindo Investment Advisers Inc, Gary Tanaka, to five years imprisonment. Tanaka, 66, headed the London office of Amerindo and he donated millions of dollars to the Imperial College in London, which named its business school after him.

Vilar, 69, stood in the 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.”

Both were arrested in mid-2005 on charges of defrauding millions of dollars from investors. They have spent the intervening years either in jail or under house arrest.

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. The crimes for which they were convicted involved private clients, a small part of the overall business.

“Our documentation was lax and that got us into trouble,” Tanaka, dressed in a suit, told the judge on Friday. “I’m sorry for what happened.”

The courtroom was crowded with friends and family, including Tanaka’s 86-year-old mother.

In November 2008, a jury found Vilar and Tanaka, 66, guilty of securities fraud, conspiracy and investment adviser fraud after an eight-week long trial. Vilar also was convicted of money laundering.

At the time of their conviction, their lawyers said they would appeal. Vilar and Tanaka have 14 days from sentencing to file any appeals.

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. Prosecutors centered their case largely on one investor, heiress Lily Cates, who was an Amerindo client for 18 years.

They accused the partners of stealing $5 million from Cates, who is the mother of actress Phoebe Cates.

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 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 is a race horse 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 and Carol Bishopric)

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