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Alan Dershowitz attacks the US case against Alberto Vilar

We’ve received the following exclusive account of the appeal hearing of the former opera benefactor Alberto Vilar and his partner Gary Tanaka. Alan Dershowitz, appearing for Tanaka, took the US Government to the cleaners.

Here’s Slipped Disc’s observer’s report:

I attended the oral arguments in the appeal of Alberto Vilar and his partner Gary Tanaka on Tuesday. The hearing before a panel of three judges took much longer than expected – about 1-1/2 hours – as the judges asked many questions and gave lawyers for the defendants additional time to present their case. The court where the hearing took place is United States Court of Appeals for the Second Circuit. Both defendants have filed motions to be released on bail pending the court’s decision.
 
Alan Dershowitz, the high-profile criminal appellate lawyer, blasted the government for conducting an illegal search of the offices of the defendants’ company, Amerindo Investment Advisors inc. The search led to their arrest in May 2005 on fraud and conspiracy charges. (Dershowitz actually represented Gary Tanaka, but his focus on the illegal search serves the purpose of both defendants)
Vilar’s appeals lawyer Vivian Shevitz, his lead attorney, repeated arguments she had made in her appeals brief, namely that the prosecutors concocted a Madoff-type fraud case and induced their star witness, heiress Lily Cates, to lie on the stand about her offshore investments.
Vilar’s defence team: Vivian Shevitz (left) and Jane Simkin Smith
Much of the testimony focused on the question of whether the US government has jurisdiction over offshore investments. All of Amerindo’s handful of private clients which represented less than 1 percent of the company’s business, kept their money outside the United States. This shields them from US Securities laws and saved them US taxes.
Why do  these victims’ seek protection from the government when the purpose of investing outside the US is to circumvent US securities laws and US taxes? one of the lawyers asked.
The government argued it does have jurisdiction over such offshore tax havens if fraud is involved. The defense attorneys disagreed. Both sides cite the case of Morrison v. National Australia Bank Ltd to make their point.
The defense also told the court that none of the victims  lost any money because when Amerindo was shut down in 2005, the brokerage firm of Bear Stearns froze all the assets and put no one in charge to manage them so they could earn interest.
The money – some $50 million – is being held today by JPMorgan Chase,the investment bank that took over Bear Strearns in 2008 during the global financial crisis. The frozen funds are well in excess of the victims’ claims at the time of Amerindo’s shutdown. These facts, the defense says, were kept from the jury and were disclosed only during Vilar’s sentencing hearing.
In February 2010, Vilar was sentenced in US Federal District Court to nine years in prison. He is serving his time at the minimum security facility of Fort Dix, New Jersey. His partner Gary Tanaka drew a five-year sentence. He is incarcerated at Terminal Island, San Jose, California.
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