By LARRY NEUMEISTER - Associated Press Writer - Associated Press
Thursday, October 29, 2009
A billionaire hedge fund manager charged in an insider trading case asked that his bail be reduced from $100 million to $25 million Thursday, noting that even Bernard Madoff's bail was only $10 million even after he confessed to a multibillion-dollar fraud.
Attorney John Dowd said Raj Rajaratnam, one of the richest men in America, was subjected to "onerous conditions" of bail even though he faces no more than 10 years in prison if he is convicted. Madoff is serving a 150-year sentence after pleading guilty to fraud charges.
Rajaratnam, 52, "is confident that, when all the relevant facts come to light, he will be exonerated," Dowd wrote in a letter to a magistrate judge in U.S. District Court in Manhattan.
Janice Oh, a spokeswoman for prosecutors, said she had no comment on the letter.
Rajaratnam was charged this month with conspiracy. He was freed the day of his arrest but was required to post $2.5 million in cash and personal property valued at $17.5 million. Dowd asked that bail be reduced to $25 million with collateral of $10 million; he also asked for elimination of a requirement that Rajaratnam's travel be lmiited to $110 miles of New York.
The letter from Dowd also provided the first look at Rajaratnam's defense against what prosecutors called the largest insider trading case ever to result from an investigation of hedge fund trading. The case also relies heavily on tapes of telephone conversations.
Dowd said the government arrested his client Oct. 16 before it had "the critical information that will place its current allegations in the proper context and dispel any allegation of criminal conduct."
He said the government evidence relies heavily on a single cooperating witness who reportedly is a convicted felon and who has fabricated evidence for a court proceeding before.
"Far from intending to flee, Mr. Rajaratnam looks forward to defending himself and correcting the mistaken and unwarranted allegations against him," Dowd said.
Dowd said Rajaratnam has remained engaged in the business of Galleon Group, a hedge fund that has managed as much as $7 billion in assets.
Dowd said Rajaratnam, a portfolio manager for Galleon, is considering ways to "wind down" the hedge fund, including the possibility that the company will be acquired by other interested parties, a move that would preserve jobs for many of Galleon's 125 employees.
Forbes magazine ranked Rajaratnam No. 559 this year among the world's wealthiest billionaires, with a $1.3 billion net worth.
The Federal Election Commission has said he has given tens of thousands of dollars to Democratic candidates and causes, including contributions to President Barack Obama's campaign, the Democratic National Committee and various campaigns on behalf of Hillary Rodham Clinton.
The bail for Rajaratnam overlooks his strong ties to the United States and to his family, Dowd said. Rajaratnam, born in Sri Lanka, has lived in the United States for nearly 30 years.
He said he lives in a $17.5 million New York City apartment with his wife of 21 years and his three children, two of whom attend city schools and a third who attends a U.S. college. Rajaratnam also owns a $10.5 million Connecticut home and a $1.4 million Florida condominium.
"Mr. Rajaratnam's loyalty to his family is deep-seated, and he comes from a culture in which commitment to one's family is of sacred importance," Dowd wrote. "Mr. Rajaratnam could not even conceive of abandoning his dependent family by fleeing the country."
The lawyer criticized the government for portraying Rajaratnam's plans to travel to London the day of his arrest as sinister, saying he had planned to attend the London Film Festival, where a film he had helped finance was being screened. He said he then planned to fly to Geneva with his wife, who wanted to celebrate her 50th birthday in the city where he proposed to her.
Dowd also noted that the document charging Rajaratnam included a footnote showing that he had telephoned a family member at 3 a.m. the day of his arrest. The lawyer said the call was made after Rajaratnam's daughter mistakenly dialed her father at that hour from college.
Dowd's letter was filed the same day that Rajaratnam co-defendant Rajiv Goel appeared in federal court in Manhattan for the first time. Goel, 51, of Los Altos, Calif., a director of strategic investments at Intel Capital, the investment arm of Intel Corp., was originally arrested in California on conspiracy and securities fraud charges. He was freed on $750,000 bail.