Calling Rajat Gupta a "flight risk" due to his strong personal and financial ties to India, US prosecutors have asked a court here to reject the former Goldman Sachs Director's request to remain free on bail pending appeal of his conviction on insider trading charges.
63-year-old Gupta, who was sentenced last month to two years in prison, had appealed in the US Second Circuit Court of Appeals to grant him bail pending appeal and had asked for a stay on his surrender date.
The former McKinsey head is set to begin his jail term on January 8 next year.
In a memorandum submitted yesterday by US Attorney in Manhattan Preet Bharara and federal prosecutors Reed Brodsky and Richard Tarlowe, the government said Gupta's request for a stay of his surrender date and release pending appeal should be denied.
The prosecutors said Gupta "poses a risk of flight" due to his "strong ties overseas, including assets, family, and close friends in India and elsewhere, his incentive to flee after sentencing, his substantial means and his demonstrated disrespect for the law and capacity for deceit."
They said due to these concerns, the government had sought and obtained a USD 10 million bond from Gupta after he was arrested in October 2011.
The bond has been secured by the equity in his Connecticut home and co-signed by two individuals.
Gupta also had to surrender his passport and restricted travel conditions were imposed on him.
US District Judge Jed Rakoff had said at the time of Gupta's sentencing that he was not a flight risk but had denied Gupta's request for bail pending appeal.
Gupta was found guilty by a jury after a three week trial in May of passing confidential information about Goldman Sachs to his friend and business associate hedge fund founder Raj Rajaratnam.
The government had used wiretaps as evidence to show that Gupta had called Rajaratnam minutes after getting off Goldman board meetings following which the Sri Lankan billionaire had traded in the shares of the financial giant, making millions of dollars in profit and avoiding massive losses.
Rajaratnam is currently serving his 11-year prison term. He has appealed against his conviction.
Gupta has also been ordered to pay a USD five million fine even as the US Securities and Exchange Commission is seeking a USD 15 million penalty.
In papers submitted with the appeals court earlier this month, Gupta's lawyers argued that he should be granted bail pending appeal because the challenge to his conviction would likely raise several "substantial questions of law," including that the district court was wrong in allowing wiretaps of Rajaratnam to be played at his trial.
The prosecutors have argued that Gupta has not identified a "substantial question of law or fact" that is likely to result in reversal or a new trial.
"The evidentiary challenges advanced in his motion are plainly insufficient to warrant bail," they said.
