Govt forced witnesses to lie: defence

Defence lawyer John Dowd said that the government had threatened to break up Galleon Group employee Adam Smith’s family, who testified against Rajaratnam.

Dowd described their “pre-package testimony” as “unreliable and worthless” that “fell apart on cross examination.”

The defence argued that Rajaratnam had traded on information that was already in the public domain.

Dowd told the jury members that if the content of the alleged tips were public, they “must acquit.” Dowd also blasted the prosecution for suggesting that a key defence witness, former Chief Operating Officer of Galleon Group Rick Schutte, had been influenced by the $25 million that Rajaratnam and family invested in his hedge fund.

“That’s absurd and it should offend you,” said. Dowd also slammed key government witness Anil Kumar for being “dishonest” about faking documents for his domestic help Manju Das in whose name he opened an account in Galleon’s Buccaneer’s Offshore Ltd. where payments for alleged tips eventually landed.

“Anil Kumar might be the most dishonest person in the world,” said Dowd. “He got his cronies in India to get a bunch of fake documents.” The lawyer said Kumar “giggled his way through the testimony.”

In his closing argument, US Assistant Attorney Reed Brodsky said that there was “overwhelming evidence that the defendant is guilty of conspiring with others at Galleon of trading on insider information.”

The government lawyer recapped the instances that Rajaratnam allegedly received confidential information including on Goldman Sachs Inc., Google Inc., Hotel Groups, Akamai Technologies and acquisition by Advanced Micro Devices (AMD), a computer chip-maker of its rival ATI Technologies.

Brodsky said that the defence would call government witnesses as liars because they had offered, “devastating proof of defendant’s guilt.”  Dowd said the prosecution was living in an “imaginary world” where the only way information became public was through press releases.

Earlier, Brodsky described the key defendant witness, Gregg A Jarell, of being “divorced from reality” and living in a “theoretical world.”

Jarrell, a professor of finance and economics at the University of Rochester, last week produced analyst reports and press clippings to show that the content of the alleged tips was public information.

Brodsky said that Rajaratnam had fallen victim to greed. “Once you get into the billions, you wanna keep going,” he said.

However,  prosecutors alleged that Rajaratnam set out “to conquer the stock market at the expense of the law” using what they called his “corporate spies” including at least three Indian Americans.

Brodsky said Galleon hedge fund co-founder was at the centre of a network of friends and “corporate spies”, who passed on secret share tips.

Brodsky alleged that Kumar had proposed that Galleon hire McKinsey for consulting work. Instead, Brodsky said, Rajaratnam lured Kumar into an illegal scheme by paying him $500,000 through a secret offshore account. “Your common sense tells you he corrupted Kumar.” Brodsky alleged Rajaratnam lured Goel, his friend from graduate school, into providing tips about Intel after loaning Goel $100,000 and giving him $500,000.