Alberto W. Vilar described in court as a lying fraudster who finagled money out of clients.

Alberto W. Vilar, the opera lover and disgraced patron of the arts, took center stage in a federal courtroom on Monday, when his trial for securities fraud opened with a prosecutor describing him as a lying fraudster who finagled money out of clients. Lawyers for Alberto W. Vilar said he made millions of dollars for his clients and that he returned "every penny" to them. Defense lawyers gave a contrasting view, portraying him as a top-rated investment adviser who made millions for big pension funds and individuals and returned “every penny” to his clients.An assistant United States attorney, Benjamin A. Naftalis, repeatedly used the words lie and steal to describe Mr. Vilar’s dealings with clients, and said that Mr. Vilar and his business partner had even had an employee use scissors and Scotch tape to attach a client’s signature to an order transferring $250,000 from her account.
Mr. Vilar, 67, and the partner, Gary A. Tanaka, 65, are charged with conspiracy and securities fraud, investment adviser fraud, mail fraud, wire fraud and money laundering while handling funds of clients of their firm, Amerindo Investment Advisors, from 1986 to 2005.They were arrested in May 2005. Mr. Vilar had already made headlines for failing to provide millions of dollars in promised donations to the Metropolitan Opera, the Los Angeles Opera, the Washington National Opera and other organizations. Nevertheless, he ranks as one of the culture world’s major donors for the millions he did give. With his trial finally under way in Federal District Court in Manhattan, Mr. Vilar, wearing a brown suit, sat expressionless during the session, occasionally making notes.Mr. Vilar and Mr. Tanaka “repeatedly lied to their clients about how they would invest their money,” Mr. Naftalis said. One scheme involved instruments called Guaranteed Fixed Rate Deposit Accounts, which he offered to clients.“He told them to their face their money would be safe and guaranteed,” Mr. Naftalis said, calling that an “absolute sham.” The money instead was put in risky technology stocks that ultimately lost most of their value, he said. Mr. Vilar never made that clear, Mr. Naftalis added. The prosecutor also outlined the indictment’s charge that Mr. Vilar diverted $5 million in 2002 from one of his first clients, Lily Cates, for personal and business expenses, including fulfillment of a $500,000 pledge to his alma mater, Washington and Jefferson College. About $3 million went to pay back another investor, he said. Mr. Vilar told none of this to Ms. Cates, Mr. Naftalis said, adding, “That’s crime. That’s fraud.” The $5 million was supposed to be for a new small-business investment fund. Mr. Vilar proposed the deal to Ms. Cates at his luxury apartment on United Nations Plaza knowing he did not have government approval for the fund, Mr. Naftalis said. “He looked her right in the eye, and he lied to her,” the prosecutor added.
Ms. Cates, the mother of the actress Phoebe Cates, was a close friend of Mr. Vilar’s. In 2003, the prosecutor said, the defendants stole $250,000 from her by diverting the money from one of her accounts to a personal account of Mr. Vilar’s. “This time they did it with a pair of scissors and a roll of Scotch tape,” Mr. Naftalis said. Mr. Tanaka’s assistant in London did the cutting and pasting, he charged.