Other attributes
Amerindo Investment Advisors was an investment advisory and venture capital firm co-founded by Alberto Vilar and Gary Tanaka.
The firm was founded in 1985 and made investments in a number of promising early internet startups including eBay and Amazon.com, yielding high returns for investors in the firm's flagship Amerindo Technology Fund.
Following the collapse of the first Dot Com bubble, however, the fund incurred significant losses. In 2003, Amerindo folded parallel funds, each focused on health, biotechnology, and B2B software and services, into its flagship Amerindo Technology Fund.
A 2005 trial brought against Vilar and Tanaka by the U.S. Southern District Attourney of New York found that the the partners had engaged in fraudulent activities as early as 1986. The expansive trial brought allegations of multiple counts of fraud, for which Vilar and Tanaka were convicted in 2008. Both served time in prison and paid millions of dollars in fines.
Vilar and Tanaka engaged in several types of fraudulent activity, according to the evidence presented at their trial. Chief among them was a misrepresentation of the firm's investment strategy. Amerindo Investment Advisors advertised a financial product it called the "Guaranteed Fixed Rate Deposit Account." (GFRDA), which they claimed provided a return of a fixed rate of interest over a fixed term. They said that the majority of the GFRDA funds were invested in high quality, short-term deposits, including United States Treasury bills and other safe debt securities. Based on these representations, numerous investors invested millions of dollars in GFRDAs. Contrary to these representations, Vilar and Tanaka invested all of the GFRDA investors’ funds in risky, volatile high technology and biotechnology stocks. Following the implosion of the stock market bubble, Vilar and Tanaka were unable to repay investors in the GFRDA.
Vilar and Tanaka were also convicted of defrauding a woman named Lily Cates of $5 million. Following the transfer of $5 million from Cates to accounts controlled by Amerindo, Vilar and Tanaka used that capital to fulfill various personal and corporate obligations. Vilar transferred $2 million to a personal account and used it to pay for a number of personal expenses, including a $540,000 donation to his undergraduate alma mater. Vilar and Tanaka used $650,000 to pay for various Amerindo business expenses. Additionally, Vilar and Tanaka wired approximately $2.85 million to an account in Luxembourg to repay a GFRDA invstor.
