Prosecutors want Roomy Khan tapes in Rajaratnam trial

Prosecutors Monday said instead of calling one of their key witnesses they would like to show the jury two surveillance videos of Khan allegedly faxing confidential data to Rajaratnam, who is currently on trial in Manhattan federal court for alleged $45 million insider trading trial.

Galleon Group co-founder Rajaratnam's lawyers, however, are trying to keep Mark West, an Intel security employee, from testifying about faxes Khan allegedly sent to Rajaratnam in late 1997 and early 1998, which the prosecution claims contained confidential company information.

Khan, who has pleaded guilty to insider trading, allegedly helped Rajaratnam male $4 million in a day by passing on a tip from Indian origin Moody's analyst Deep Shah about Hilton hotel chain takeover by private-equity firm Blackstone Group.

Shah, who was declared a fugitive two years ago and was recently located in Mumbai.
West, who was working on an Intel internal security investigation for about a month, set up video surveillance that included Khan's work station, a certain fax machine and the documents sent over that fax, according to court documents.

Some of the faxes allegedly included "book-to-billing" reports which the prosecution claimed provide a sense of Intel's earnings because they analysed customer demand for the company's processors.

Another kind of document, the government alleged, showed calculations relating to Intel's revenue and gross margins for the quarter ending March 1998. Defence attorneys, however, are fighting the prosecution's use of West's testimony, saying that it doesn't demonstrate a sufficient connection between Khan and Rajaratnam and  calling the videos and faxes "prejudicial than probative" and "based in part on hearsay."

In documents related to a 2002 court hearing in Khan's case, prosecution acknowledged that it could not show "that any Galleon trade resulted from Rajaratnam's possession of the information stolen for him by Khan from Intel," defence attorneys wrote in a letter to the court.