Major donor to Royal Opera House held on fraud charges in US

One of the chief benefactors of the Royal Opera House, whose name adorns one of the venue's most impressive spaces, has been arrested on fraud charges.

One of the chief benefactors of the Royal Opera House, whose name adorns one of the venue's most impressive spaces, has been arrested on fraud charges.

The Cuban-born philanthropist Alberto Vilar has been held in custody in the US on a federal charge, alleging he used an investor's money as "a personal piggy bank". A glass-panelled court at the heart of the Covent Garden institution was named the Vilar Floral Hall in recognition of his financial contributions, when the venue reopened after major redevelopment in December 1999.

Mr Vilar, whose fortune has been estimated at more than £500m, pledged £20m for the Opera House's renovation and a fund to encourage young artists.

He has fallen behind with payments to a number of the operas he supports in the US and Europe after suffering financial setbacks due to the dotcom crash. New York's Metropolitan Opera and the Washington Opera have already taken his name off projects because they have not received the amounts which had been pledged to them.

Mr Vilar was arrested on Thursday and is being held without bail until a hearing on Tuesday. He is charged with engaging in business practices that were fraudulent, deceptive and manipulative. In a federal complaint, the US Postal Inspector, Cynthia Fraterrigo, alleged Mr Vilar improperly used money from someone who invested $5m (£2.6m) in his company, Amerindo Investment Advisors.

She said the investment was deposited into an account used by Vilar "as a personal piggy bank to pay personal expenses and make charitable contributions, without the knowledge, consent or authorisation of the victim". He denies any wrongdoing. Mr Vilar's donations to the ROH are not under investigation. The last payment to the Opera House was in March 2002, while the alleged contentious payments date from later than that. Tony Hall, the ROH's chief, said he was shocked to hear Mr Vilar had been charged. "We've had a long and fruitful relationship for nearly 10 years and he has contributed considerable sums to the Royal Opera House," Mr Hall said.

Since Mr Vilar's last contribution to the young artists' fund three years ago, the shortfall in payments has been made up by the Opera House, but it is in talks with other potential sponsors and expects to make a "positive announcement" about funding arrangements soon .

Redevelopment costs are unaffected by his payments being halted because a surplus of cash had been pledged and the excess was diverted to an endowment fund to cover other expenses.