MANHATTAN (CN) – Galleon hedge fund founder Raj Rajaratnam, a billionaire who faces up to 24½ years at his sentencing today (Thursday) for a $64 million inside-trading scheme, may have worked with more than the 40-plus people previously suspected, prosecutors wrote in a sentencing brief.
In March, prosecutors deployed dozens of wiretaps, three cooperating witnesses and reams of emails and other documents to show that Rajaratnam traded illegally in Intel, Akamai, Blackstone, Goldman Sachs, PeopleSupport, Advanced Micro Devices and other companies.
A jury convicted the Sri Lankan-born businessman of 14 counts of securities fraud in May. Prosecutors announced in June that each of his 40-plus coconspirators had been convicted.
Last week, a federal judge sentenced one of them, Emanuel Goffer, to 3 years in prison.
Prosecutors say the inside trading ring may have involved more than 20 unwitting accomplices.
These included eight Galleon employees and one HSBC employee, who helped Rajaratnam wire payments to co-conspirator Anil Kumar, a former McKinsey & Company consultant, the government’s brief states.
At least another 12 unknowingly helped Rajaratnam place illicit trades, according to the brief.
Defense attorneys claim the government has not proved that Rajaratnam led even five people in his conspiracy.
Leading five or more people in a criminal scheme can trigger a sentencing enhancement.
“Having failed to identify a single criminal activity in this case that involved five or more culpable participants, the government now leads with the argument that the various conspiracies were ‘otherwise extensive’ because they entailed the innocent participation of various individuals,” defense attorney Terence Lynam wrote. “But those arguments founder on both the facts and the law.” Rajaratnam also seeks mercy based on unspecified health conditions, which he shared with the court under a seal that prosecutors are trying to lift.