Two New York City financial advisors sentenced for fraud
February 6th, 2010 - 4:01 pm ICT by BNO NewsNEW YORK CITY (BNO NEWS) – Two former New York City investment advisors on Friday were sentenced to prison for their part in a multi-million dollar fraud, prosecutors said.
Alberto W. Vilar and Gary A. Tanaka, the former owners of Amerindo Investment, were sentenced today to nine and five years in prison, respectively, on charges stemming from a multi-million dollar scheme to defraud investors.
According to the evidence presented at the trial, Amerindo Investment Advisors was a financial services company that offered investment adviser services to institutional and private investors. Beginning in 1986, Vilar and Tanaka engaged in a fraudulent investment scheme involving three entities – Amerindo U.S., Amerindo U.K., and Amerindo Panama – and encouraged their victims to invest funds in, among other things, a product known as the “Guaranteed Fixed Rate Deposit Account” (GFRDA).
While doing so, Vilar and Tanaka represented to their victims that the GFRDA would provide a fixed-rate of interest for a fixed-term, and that the majority of the GFRDA funds would be invested in high quality, short-term deposits, including United States Treasury bills and other safe debt securities.
Based on Vilar and Tanaka’s representations, numerous victims invested millions of dollars in GFRDAs. Contrary to their representations, however, Vilar and Tanaka invested all of the GFRDA victims’ funds in risky, volatile high technology and biotechnology stocks. Following the sharp downturn of the Internet bubble in the fall of 2000, Vilar and Tanaka were unable to repay GFRDA investors. As a consequence, several victims lost millions of dollars.
In addition to the terms of imprisonment, Vilar, 69, of New York City, and Tanaka, 66, of London, were fined $25,000 and $20,000 respectively.
In sentencing Vilar, the Judge said, “People need to be able to trust their financial advisors. IF financial advisors are out for themselves, primarily, and use the assets of their clients as though they are their own, that undermines confidence in an entire sector – and that is dangerous.”
The case is the result of investigative work by the U.S. Postal Inspection Service.
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Tags: according to the evidence, biotechnology stocks, bno, debt securities, downturn, financial advisors, fixed rate of interest, high technology, imprisonment, internet bubble, investment adviser services, investment advisors, investment scheme, private investors, rate of interest, short term deposits, tanaka, treasury bills, united states treasury, vilar