Bloomberg News

Rajaratnam Said to Be Assigned to Prison in Massachusetts

November 02, 2011

(Adds judge’s prison recommendation in second paragraph.)

Nov. 2 (Bloomberg) -- Raj Rajaratnam, the hedge fund manager sentenced to 11 years in prison for insider trading, was assigned to a federal prison in Massachusetts, according to a person familiar with the matter.

Rajaratnam, 54, was ordered by U.S. District Judge Richard Holwell to report to prison on Dec. 5. Holwell, who sentenced Rajaratnam Oct. 13 in Manhattan federal court, said he would recommend at the request of the Galleon Group LLC co-founder that he be sent to the federal medical center in Butner, North Carolina, because of Rajaratnam’s health problems, which include diabetes, the possibility of kidney failure and the necessity of transplant surgery.

Rajaratnam will go to the federal medical center on the former Devens military base in Ayer, Massachusetts, said the person familiar with the matter. That facility the capacity to provide dialysis to 125 inmates and has given kidney transplants to 15 inmates since 2004.

John Dowd, Rajaratnam’s lawyer, declined to comment on the prison assignment.

Ed Ross, a Bureau of Prisons spokesman, also declined to comment, citing a policy not to disclose prison assignments before the prisoner is in custody.

The Butner prison is where Bernard Madoff is serving his 150-year term for the biggest Ponzi scheme in U.S. history.

Rajaratnam is the central figure in what U.S. investigators called the largest hedge fund insider-trading case in U.S. history. The probe, which leveraged the widespread use of FBI wiretaps for the first time in such an inquiry, led to convictions of more than two dozen people.

Prosecutors said the hedge fund manager made more than $72 million by using illegal tips to trade in stocks of companies including Goldman Sachs Group Inc., Intel Corp., Google Inc., ATI Technologies Inc. and Clearwire Corp.

The case is U.S. v. Rajaratnam, 09-01184, U.S. District Court, Southern District of New York (Manhattan).

--Editors: Peter Blumberg, Joe Schneider

To contact the reporter on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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