11/20/2008 1:00AM

Tanaka faces the music reflectively


In one sense, the company is not that bad. A three-time winner of the Eclipse Award for leading owner. A champion trainer. The minority interest owners of a Horse of the Year. These all represent levels to which most people who enter the racing game would aspire.

Unfortunately, the names attached to the above descriptions are convicted drug distributor Dan Lasater, convicted murderer Buddy Jacobson, and the disbarred lawyers William Gallion and Shirley Cunningham - the men who bought Curlin as a yearling - who face federal fraud and conspiracy charges after already losing a $42 million civil suit.

For better or worse, Gary Tanaka now finds himself in the same data bank alongside famous racing personalities who ran afoul of the law. On Wednesday in New York, Tanaka, 65, was found guilty in federal court on charges of securities fraud, investment adviser fraud, and conspiracy. Tanaka was found not guilty on nine other counts, while his business partner, Alberto Vilar, was found guilty on all 12 charges.

Tanaka was back at his son's Manhattan apartment Thursday, where he has been living under a varying degree of bail restrictions for the past 3 1/2 years. Justice, in this instance, was not very swift, especially since the delays were brought on by the prosecution as the case was assembled around the allegations of a single investor. Tanaka goes back to court on Nov. 26 to find out what kind of bail conditions he must meet while he awaits sentencing.

"The worst part is that there is more coming," Tanaka said. "But you can't bury your head in the ground and pretend it's not happening."

The attorney representing Vilar has already vowed that the verdict would be appealed. Tanaka, who figures to face considerably less of a sentence, is not certain of his next move.

"My attorneys say that we should wait for the sentencing before we decide on an appeal," Tanaka said. "What if they say four years, but since he's been locked up for 3 1/2 years in his son's place, six months, plus six months probation? You have to decide if it would be worth fighting. The only reason it would be is to clear my name, but there's a practical aspect, too."

By several accounts, including a report in the New York Times that described shouting in the jury room near the end of deliberation, it was apparent that the government's case against Tanaka was not nearly as clear as the one made against Vilar.

"It was tough on the jurors," Tanaka conceded. "How can they make [Vilar] guilty on 12 counts, and then how can I be a 50 percent partner and know nothing? So they had to wrestle with that."

Tanaka's firm, Amerindo Investments, dealt primarily with institutional funds invested by large companies. It was a few smaller investors who accused Vilar and Tanaka of improprieties in the handling of accounts and pressed for charges. Tanaka was asked if he thought the current economic climate, in which even the most conservative investments are taking serious hits, may have had an impact on the jurors.

"I think so, because nowadays you have major banks and institutions and brokers, and they're supposed to be prudent guys, and they're losing money," Tanaka said. "You've got money market funds and CDs that are supposed to be safe, and you're losing money there. Here we had a product supposedly with more risk that for 17 years there was no problem, and when it got in a little rough shape we still backed it up, saying we can't pay you this month but we can pay you next. Therein lies the problem."

Tanaka seemed resigned to the fact that his international racing stable would undergo some kind of dramatic change in the wake of his conviction. The green and gold Tanaka colors have appeared atop such champions and major stakes winners as Golden Apples, Rakti, Gourmet Girl, and Caitano. Most jurisdictions have strict rules regarding the licensing of convicted felons.

"I have to agree with that," Tanaka said. "You don't want the mafia in there owning horses. Funny thing I just remembered - I once had a guy named Tony Ciulla that I worked with. They kept giving him a tough time when he raced in California because he had the same name as a guy on the East Coast named Tony Ciulla, who was a mafia guy, and fixed some races."

Although his racing interests are small potatoes compared to his larger legal concerns, Tanaka was intent that questions about his stable be resolved. At this point, however, he could only offer that "something will run in someone's name." Two of them have important dates on the horizon.

"We've had like 16 years in a row winning at least one Grade 1 or Group 1 race," Tanaka said. "So the streak is on the line now. My back is to the wall in more ways than one, and that keeps you going. It will either have to be Proudinsky in the Citation at Hollywood Park or Pressing in the Hong Kong Mile. You might see my colors out there, but there might be a big funny letter in the middle, like an 'X' or something."