Teary Khan Admits To String Of Lies In Whitman Case

Aug 9 2012 | 1:42pm ET

A lawyer for accused insider-trader Doug Whitman hammered away at the credibility of one of the government’s star witnesses in the case. But it took a prosecutor’s questions to make the former Galleon Group employee cry.

Whitman attorney Dave Anderson completed his cross-examination of Khan, who did not testify in the trial of Galleon Group founder Raj Rajaratnam, yesterday. Under direct examination, Khan said she passed confidential information about two technology companies to Whitman, who ran hedge fund Whitman Capital.

Anderson questioned Khan about her ties to Rajaratnam, noting that at one point she lied to him about having a source at Cisco Systems. When questioned about that alleged source by the Federal Bureau of Investigation, Khan told them that it was Whitman. On the stand yesterday, she said she didn’t “know why I was saying that.”

Anderson also questioned Khan about her two guilty pleas on insider-trading and obstruction of justice charges, her destruction of evidence, the money she paid her sources and whether she disclosed her convictions when she registered to vote in Florida three years ago.

“In the beginning, I was lying about everyone,” Khan said. “My first instinct was to try to keep out as many people as possible” in her discussions with the FBI. She even got a cell phone in her gardener’s name; “I think I had been lying to the government about a lot of things and I was just scared to use my own phone,” she said.

After Anderson finished with Khan, prosecutors began a redirect examination of her, which will continue today. Asked about the difficulty of cooperating and her ordeal, Khan broke down in tears.

“This has been very difficult for me, and I understand that I lied a number of times,” Khan said. “I realize many decisions I made were really wrong.”

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