An investment advisor in his 70s was found guilty on Thursday on charges he defrauded clients by funneling money to a New York horse racing firm and small, thinly traded companies in exchange for secret kickbacks.

A federal jury in New York found James Tagliaferri, who managed TAG Virgin Islands, Inc in St. Thomas, guilty on 12 of 14 counts including investment advisor fraud, securities fraud, and wire fraud.

A mistrial was declared on two other counts after jurors were unable to reach a verdict, a court clerk said, and U.S. District Judge Ronnie Abrams set sentencing for Nov. 7.

Scott Tulman, Tagliafferi's lawyer, in an email said his client "continues to maintain that at no time did he ever intend to hurt his clients - some of whom were friends of his for decades."

A spokesman for Manhattan U.S. Attorney Preet Bharara had no immediate comment.

Prosecutors said Tagliaferri, 75, invested more than $120 million of funds he oversaw at TAG Virgin Islands in private or illiquid companies in exchange for at least $3.35 million in fees.

When some clients began demanding their promised returns, Tagliaferri used other clients' funds to repay them in a Ponzi scheme-like fashion, and to make payments for companies he was affiliated with, according to the government.

Among those companies was International Equine Acquisitions Holdings Inc, a Garden City, New York-based company that owned thoroughbred racehorses, including Big Brown, a stallion that won the 2008 Kentucky Derby and Preakness Stakes before coming up short in his attempt to complete the Triple Crown at the Belmont Stakes.

Tagliaferri, a resident of Connecticut and the U.S. Virgin Islands, also created false documents to conceal his fraud, prosecutors said.

All told, the scheme, which ran from 2007 to 2010, aimed to defraud more than 100 clients of TAG Virgin Islands, which reported having about $252 million under management in 2009, the government said.

Tagliaferri, who testified in his own defense, denied having acted in bad faith.

Tulman, his lawyer, told jurors at the trial's outset it made no sense to suppose a successful businessman would suddenly become the "Darth Vader of investment advisors" at the end of his career.

"He was negligent," Tulman said in his opening statement. "He may even have been reckless. But he never intended to deceive anybody, and that is what this case is all about."

The U.S. Securities and Exchange Commission has a parallel civil lawsuit that is pending.

The case is U.S. v. Tagliaferri, U.S. District Court, Southern District of New York, No. 12-cr-00115.