Rajaratnam Co-Defendant Tells Judge She Wasn't Advised Of Her Rights

Nov 23 2010 | 12:09pm ET

Danielle Chiesi, former hedge fund consultant and insider-trading co-defendant of Galleon Group founder Raj Rajaratnam, took the stand for the first time yesterday as her lawyers moved to have statements she made on the morning of her arrest thrown out.

Unlike Rajaratnam—who answered only monosyllabically during a pro-forma hearing earlier this year about a potential conflict of interest on the part of his lawyers—Chiesi testified at length and in some detail. She even admitted that she briefly considered accepting a deal and wearing a wire.

Chiesi said that five Federal Bureau of Investigation agents woke her at 6 a.m. on Oct. 16, 2009, and told her she was being arrested. But Chiesi, formerly of New Castle Partners, said she was not informed of her Miranda rights for 90 minutes.

During that time, Chiesi said the agents questioned her and offered her an opportunity to cooperate in the probe. She said the agents wanted her to place a call—which would be recorded—to a person on the West Coast. Chiesi did not identify that person.

Prosecutor Reed Brodsky countered that Chiesi was advised of her rights twice and that she only remembers the second. But U.S. District Judge Richard Holwell would not allow Brodsky to question her about the information covered during the first 90 minutes she was questioned in her Manhattan apartment.

Chiesi, who admitted being nervous on the stand, said she considered taking the FBI agents, who she called "very nice," up on their offer to cooperate. She also noted that at least one of them, "Claire," won the affections of her usually antisocial cat.

"She's usually very mean to people, and now I'm getting arrested and she's in a good mood," Chiesi said.

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