11/19/2008 12:00AM

Tanaka found guilty on fraud charges


Gary Tanaka, the U.S.-based horse owner who frequently purchased high-class racing stock in Europe and other countries, was found guilty on Wednesday by a U.S. jury on three counts of securities fraud, investment adviser fraud, and conspiracy.

Tanaka, whose business partner, Alberto Vilar, was also found guilty on 12 counts of securities fraud, conspiracy, and money laundering, was arrested in 2005 after prosecutors released a 12-count indictment against the two men, who co-founded Amerindo Investment Advisors Inc. The judge delayed sentencing until after post-trial motions have been argued.

Tanaka was found not guilty on nine of the counts. According to the New York Times website, Vilar will appeal the ruling. Tanaka's attorney, Glenn Colton, did not indicate after the verdict was released whether his client would appeal.

The indictment accused Tanaka and Vilar of misrepresenting their investment activities to clients and then defrauding them when technology stocks deteriorated beginning in 2000. Both have been under house arrest since the indictment was released.

Tanaka has owned a number of international stakes horses, including Star Parade, an Argentine transplant who won or placed in 15 graded stakes races in the United States, and Docksider, who won the 1999 Hong Kong Mile. The indictment said that some of the misappropriated funds were used to buy three racehorses.