Rajat Gupta May Lose Mother Teresa Defense

MANHATTAN (CN) - A federal judge warned defense attorneys for former Goldman Sachs board member Rajat Gupta that they could not beat insider trading charges by trumpeting their client's history of philanthropy any more than Mother Teresa could use her missionary work to fend off bank robbery charges.

"If Mother Teresa were charged with bank robbery, the jury would still have to determine whether or not she committed a bank robbery," U.S. District Judge Jed Rakoff said.

Gupta's upcoming trial has been the most closely watched financial crime case since that of his alleged co-conspirator Raj Rajaratnam, the former Galleon hedge fund's billionaire chief sentenced last year to 11 years in prison and fined $156.6 million.

At a pre-trial hearing for Gupta on Wednesday, the typically droll Judge Rakoff rattled off a series of rulings and invited attorneys, "in the interest of wasting time," to challenge them.

Gupta's attorney Gary Naftalis took the bait, "forewarned of the hill I have to climb," to urge Rakoff to reconsider a decision limiting the time defense attorneys can spend talking about their client's charitable works.

Naftalis insisted that he should not be forced to play down Gupta's generosity when prosecutors will try to convince jurors that money motivated the alleged crimes.

That notion was inconsistent with Gupta's alleged reputation as "one of the most renowned and active humanitarians in the private sector in the world," Naftalis argued.

One of the prosecutors, Assistant U.S. Attorney Reed Brodsky, apparently had no argument with that position.

"You won't hear the government use the word 'greed,'" Brodsky said.

He explained that he intended to show that Gupta sought favor and opportunity from the alleged tips.

Brodsky also served as prosecutor for the Rajaratnam trial, where the defense also tried to depict their client as the humanitarian backer of the charter school Harlem Children's Zone.

But charity is "really not an issue in this case," Brodsky said.

Gupta has not appeared at pre-trial hearings, but is expected to be in court for trial on Monday.

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