Under Watch: Eliot Spitzer, Alberto Vilar and others
Under watch: New York Attorney General Eliot Spitzer, finally confronted in the courtroom by one of his business targets, former Bank of America broker Theodore Sihpol, in a match reminiscent of David and Goliath. The jury found Sihpol’s after-market-close trading, which Mr. Spitzer called criminal, to be commonly accepted practice. Sihpol was acquitted on 29 counts, with the jury hung on four others, for which a single juror held out for conviction. Sihpol had refused a plea offer that included jail time, putting himself at risk for a 30-year term. Other business targets have caved into Spitzer’s prosecution-by-press-release and threats of indictment or the destruction of an entire company, paying enormous fines (often with shareholder funds). None had previously risked a trial. Alberto Vilar, former patron of the arts and investment adviser, co-founder of Amerindo Investment Advisors Inc., arrested on charges of fraud and money laundering. Vilar, who spent big, lived high, made grandiose promises of bestowing charitable gifts and whose firm once managed $7 billion, reportedly now has no money and owes the Internal Revenue Service $24 million. The week he was arrested, he had boasted he was planning to take a close friend to Paris for his birthday and dine in London on the way back with Prince Charles. While blaming a series of back surgeries that left him bedridden for missing charitable pledges to hospitals, universities and opera houses, he admitted to taking 16 different medications for dislocations in his back. His Amerindo Technology Fund, a stock mutual fund, is down about 80% from its 2000 peak.
Dean Arthur Schwartzmiller, whose notes in binders detailing hundreds of child molestation victims over a 30-year period were found by police; there were 36,720 entries in seven binders categorized by age, willingness to engage in sex acts and types of acts. Schwartzmiller’s roommate, Fred Everts, was also charged with molesting children. Rep. Randy “Duke”Cunningham (R-San Diego), under investigation, no doubt for graft, by the FBI over the sale of his Del Mar Heights home in November 2003 for $1,675,000 to Washington-based MZM Inc., a defense contractor, which put the house back on the market the following month. They sold it for $975,000 seven months later, a loss of $700,000 in the midst of a booming real estate market. The House Republican leader, Rep. Tom DeLay of Texas, defended Cunningham as “an honorable man with high integrity.”Cunningham, an eight-term member of Congress, sits on the Defense Appropriations Subcommittee. Ventura County Senior Sheriff’s Deputy Patrick J. Dain indicted for allegedly filing false income tax returns from 1994 to 2000 on which he reported zero wages, and for threatening an IRS auditor who had levied his wages. Riverside County Sheriff’s Deputy Efrain Santos, Jr. , charged with five counts of spousal and child abuse, along with criminal threats against his live-in girlfriend and 4-year-old daughter; he is also under investigation for allegedly using excessive force in an arrest. Kathy Trant, whose husband died in the 9-11 attacks at the World Trade Center and who was showered with some $5 million from the government and well-wishers, admitting she is down to her last $500,000 after tripling the square footage of her house, adding a pool, hot tub and a full-size basketball court, filling her wardrobe with expensive fashion items costing her a half million dollars and squandering $70,000 taking a group of friends to the Super Bowl. After the terror attack, she admits to having been “beset by depression, drinking and a body weight that yo-yoed between 90 and 170 lbs.,”and says she spent to alleviate the pain. Claiming her life has been wrecked again — this time by money — she might want to take a look at the role that “drinking”may have played in her compulsive spending, eating disorders and depression.