Oct. 2 (Bloomberg) -- Alberto Vilar and Gary Tanaka, the technology investors convicted of stealing from clients in 2008, were ordered released from prison on bail while a federal court considers their appeal.
The U.S. Court of Appeals in New York today ordered a trial judge to set “appropriate conditions” for Vilar and Tanaka, the cofounders of Amerindo Investment Advisors Inc., to be released on bail. Vilar, 71, known for his philanthropy and love of opera, is serving a nine-year sentence in federal prison in New Jersey. Tanaka, 69, is serving five years in California.
A jury convicted Vilar in 2008 of all of the 12 criminal counts against him, including fraud and conspiracy. Tanaka, who was tried with his former partner, was convicted of three of 12 counts. The appeals court heard oral arguments in their case in August.
“I think it bodes well for getting a good result on appeal,” Vivian Shevitz, a lawyer for Vilar, said today in a phone interview. “It portends a positive outcome for us, finally, after all this time.”
Vilar has about four years remaining on his sentence, according to the Federal Bureau of Prisons website. Tanaka has about two years to serve.
Prosecutors claimed Vilar and Tanaka stole from clients, including Lily Cates, a former model who is the mother of actress Phoebe Cates, to keep New York-based Amerindo afloat and to pay Vilar’s personal expenses after the firm’s investments plunged in value beginning in 2000. The two men were arrested in May 2005 and Amerindo was forced out of business.
Before they were charged criminally, Vilar and Tanaka made and then lost billions of dollars for investors in computer, Internet and healthcare stocks.
Vilar was one of the world’s top benefactors of opera, donating millions to companies in the U.S. and Europe in addition to hospitals and educational institutions. He also failed to deliver on many of his charitable pledges, announcing new philanthropic plans as previous commitments remained unfulfilled.
Tanaka, born in a U.S. internment camp during World War II, was an owner of top-ranked thoroughbred racehorses.
In his appeal, Vilar claimed that his lawyer, Herald Price Fahringer, failed to adequately prepare for trial. Vilar also claimed that transactions took place offshore and weren’t subject to U.S. law. He argued that U.S. District Judge Richard Sullivan made mistakes in the trial that require the convictions be overturned.
Both men claim there is enough money in Amerindo’s accounts, frozen since 2005, to pay the investors they were charged with defrauding.
The order granting bail came from the same three-judge panel that is considering the appeal of Vilar and Tanaka’s convictions. Sullivan today told prosecutors to tell him by noon tomorrow whether Vilar and Tanaka should be released on their own recognizance, or whether additional bail terms should be imposed.
Ellen Davis, a spokeswoman for U.S. Attorney Preet Bharara in Manhattan, declined to comment on the case.
Earlier in the case, Sullivan denied requests by the defendants to be released pending appeal. Shortly after the 2008 verdict, he ordered Vilar locked up before sentencing, granting the request by prosecutors. They said Vilar was a “pathological” liar who invented stories about fleeing Fidel Castro’s Cuba and lied about his residency to duck jury duty.
The case is U.S. v. Vilar, 10-4639, Second U.S. Circuit Court of Appeals (Manhattan).
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