Friday, 24 March 2017
Last updated 3 hours ago
Dec 2 2011 | 9:49am ET
Raj Rajaratnam, the one-time billionaire hedge fund manager convicted on insider-trading, will have to trade his Manhattan penthouse for prison bars on Monday, a federal appeals court has ruled.
The U.S. Second Circuit Court of Appeals in New York yesterday rejected Rajaratnam's bid to remain under house arrest while he appeals his conviction and sentence. "The defendant shall surrender at such time and place as shall be instructed by the district court," which means that the Galleon Group founder will have to move in to the federal prison medical center in Ayer, Mass., after a final weekend at home to begin serving his 11-year sentence.
On Wednesday, Rajaratnam's lawyers told the three-judge panel, including the court's top judge, U.S. Chief Judge Dennis Jacobs, that the use of wiretaps in Rajaratnam's trial was likely to result in an overturning of his conviction and a new trial. But the judges seemed more interested in prosecutors' assertion that Rajaratnam still had the means to flee, possibly to his native Sri Lanka.
The two-sentence order from the appeals court did not explain why the panel denied Rajaratnam's request. But at Wednesday's hearing, Jacobs asked Rajaratnam's lawyer, "Wouldn't he rather be living as a centimillionaire in his own country rather than as a convict in jail?"
What's more, prosecutor Jonathan Streeter added, "people successfully flee all the time," even when, like Rajaratnam, they are subject to electronic monitoring and have surrendered their passports.
The ruling ends Rajaratnam's bid to stay out of jail for now, but his lawyers will try to make sure his stay there is a short one. They plan to appeal Rajaratnam's conviction as well as his sentence, a process that could take over a year.
The prison that Rajaratnam will soon call home, Federal Medical Center Devens, features facilities to treat Rajaratnam's medical ailments, including serious diabetes. His lawyers say that it is likely that Rajaratnam will require a kidney transplant.