Federal prosecutors closed their fraud case against the philanthropist Alberto Vilar on Wednesday by telling jurors that the opera-loving investment adviser "flat out stole" from some clients when his firm ran into financial trouble in the high-tech stock crash.
Vilar and business partner Gary Tanaka are charged with improperly investing millions of dollars of their clients' money in risky stocks after telling them it was going into ultra-safe investments such as government bonds.
When the Internet bubble burst, their company, Amerindo Investment Advisors Inc., found itself "drowning in a sea of debt," Assistant U.S. Attorney Benjamin Naftalis said.
"So they decided to steal money from their clients instead," he said.
The mother of actress Phoebe Cates claims to be a victim.
Prosecutors said Vilar and Tanaka, desperate to cover their own bills, illegally transferred hundreds of thousands of dollars out of Lily Cates' account without her knowledge after photocopying her signature onto a form to make it appear as if she had authorized the transaction.
"Talk about a hallmark of a fraud," Naftalis said.
Metropolitan Opera donors
Attorneys for the two men say they are innocent and never intentionally misled anyone.
Vilar's lawyer, Herald Price Fahringer, told the jury in his closing statement that his client was not some "scam artist who comes in and takes the money and is gone the next day."
He rattled off a list of Amerindo investors who had made a fortune with the company and said even when Vilar and Tanaka ran into financial problems they worked to get investors their money back, plus interest.
"That's not fraud, and we believe that the government hasn't proven fraud," he said.
Tanaka and Vilar, who pledged tens of millions of dollars to the Metropolitan Opera and other performing arts centers when their fortunes were soaring in the 1990s, each could face more than 10 years in prison if convicted.
The charges include conspiracy to commit securities, mail, wire and investment fraud.
Lawyers on both sides of the case began making their closing statements on Wednesday.