02/08/2010 12:00AM

Tanaka sentenced to five years for fraud

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Gary Tanaka, a former racehorse owner whose California-based string once participated at the highest levels of the sport, was sentenced on Friday by a Manhattan judge to five years in prison for securities fraud.

Tanaka, who continued to race horses even after being charged in 2005 with 12 counts of fraud, was sentenced along with a former business partner, Alberto Vilar, who was given nine years for his role in what prosecutors contended was a $40 million scheme. Tanaka was found guilty late in 2008 on three counts in the indictment, while Vilar was found guilty on all 12.

Tanaka, 66, will appeal the conviction and the sentence, according to his lawyer, Glenn Colton. During the sentencing, the judge indicated that Tanaka could be eligible to remain free on bail while the appeal is waiting to be heard, Colton said.

"Mr. Tanaka is leaning toward that application," Colton said.

As part of the sentence, Tanaka has 60 days to report to prison. Tanaka was been mostly confined to a son's Manhattan apartment since the arrest in 2005, though he was granted permission to travel several times in order to attend races for his horses up until the late 2008 trial.

In the 1990s and early 2000s, Tanaka's racing stable was one of the most successful in the racing world, straddling several continents. The stable took Grade 1 races in Hong Kong, the United States, and England, and included champions Gourmet Girl, the 2001 champion older female, and Golden Apples, the 2002 champion turf female.

After the 2008 conviction, which barred him from horse racing in the United States, Tanaka transferred ownership of his 13 racehorses to Annelies Glen-Teven, the wife of a friend from Massachusetts Institute of Technology, where Tanaka studied in the 1960s. The horses included Proudinsky, who won the San Gabriel Handicap on Dec. 27, 2009, at Santa Anita.

Prosecutors alleged that Tanaka and Vilar fraudulently used investors' money to pay off other investors. To cover up the transfers, the two falsified documents and forged signatures.

Amerindo was once one of the most successful private-equity management companies in the country. But its holding plunged in value following the dot-com bust, as most its stocks were in the technology sector.