Raj Rajaratnam Indicted for Insider Trading
Hedge-fund billionaire linked to terror allegedly ran $21 Million scheme.
Dec. 15, 2009 — -- A federal grand jury has returned an indictment against New York hedge-fund billionaire Raj Rajaratnam, the principal in the $21 million Galleon Group hedge-fund insider trading case -- the biggest such case ever brought, and the first to use court-authorized wire taps. As ABC News reported exclusively, Rajaratnam has also provided extensive financial support to a charity linked to the Tamil Tigers terror group.
The 36-page, 17-count indictment closely tracks the criminal complaint on which Rajaratnam was arrested in October. Rajaratnam is charged with conspiracy and securities fraud, accused of operating an elaborate insider trading operation in tech and other stocks through his hedge fund. Galleon Group had made Rajaratnam one of the wealthiest men in America, with an estimated net worth of $1.3 billion.
CLICK HERE TO READ THE INDICTMENT FILED AGAINST RAJARATNAM
John Dowd, Rajaratnam's lawyer, told ABC News that his client "is innocent and looks forward to his day in court when a jury of his fellow citizens will examine and evaluate all of the evidence."
Rajaratnam was a major contributor to the campaigns of Hillary Clinton and also the single largest known U.S. contributor to a charity linked to the Tamil Tigers in Sri Lanka, according to records obtained by ABCNews.com.
A Sri Lankan native, Rajaratnam gave more than $3.5 million to the Tamil Rehabilitation Organization (TRO), whose assets were frozen by the U.S. Treasury Department in Nov. 2007 because of alleged ties to the Tamil Tigers.
According to documents filed with the IRS, Rajaratnam's contributions to the TRO were made in 2005 and 2006 through a separate charity, which he founded in the wake of the tsunami which hit Sri Lanka in Dec. 2004.
Despite its stated relief efforts, the Treasury Department described the TRO charity as "a front" for Tamil Tigers fundraising and procurement in the U.S.
"TRO passed off its operation as charitable, when in fact it was raising money for designated terrorist group responsible for heinous acts of terrorism," said Adam Szubin, director of the Treasury's Office of Foreign Assets Control at the time.
The Tamil Tigers waged a bloody insurgency against the government of Sri Lanka in which both sides were accused of civilian atrocities. Under the Clinton administration, the State Department designated the Tamil Tigers as a terrorist organization in 1997.
Sri Lankan government officials alleged that contributions funneled through U.S. and Canadian-based charities prolonged the group's bloody campaign.
The leaders of the Tamil Tigers were killed by government forces in May, effectively putting an end to its insurgency.
Raj Rajaratnam Gave To Democratic Campaigns
Rajaratnam and his wife were also major contributors to a number of Democratic campaigns, giving a total of $118,000 to, among others, the Senate campaigns of Hillary Clinton and Chuck Schumer and the presidential campaigns of Mrs. Clinton and Barack Obama.
"He was big with Hillary and then jumped over to Obama after Hillary lost," said one Democratic party figure involved in fundraising.
Associates of Rajaratnam formed a Tamils for Clinton fund raising group for her presidential campaign and sought her help in getting the Tamil Tigers taken off the State Department's Designated Terror List.
"You shouldn't lump all terrorists together," Sen. Clinton said in 2007. Members of the Tamils for Clinton met with former President Bill Clinton in Dec. 2007 to press their case.
Rajaratnam is also a major trustee of the American India Foundation, which is a member of the Clinton Global Initiative. President Clinton is the Foundation's honorary chair, and has publicly thanked Rajaratnam and his wife for their multi-million dollar support.
Nagaratnam Ranjithan, the President of the U.S. branch of TRO, told ABC News in 2008 that his organization has nothing to do with terrorism: "I think we got into trouble because we did so much work after the tsunami, and the Sri Lankan government was not all appreciative of it. The people are suffering because we have a few people who told us to stop."
Raj Rajaratnam's Alleged Ties To Terrorism
Ranjithan's home was raided by the FBI in 2006 because of his ties to TRO.
U.S. Attorney for Southern District of New York Preet Bharara called the hedge fund insider trading case brought by his office today, "the largest hedge fund insider trading case ever charged."
Paraphrasing Gordon Gecko, the fictional character from the 1987 film "Wall Street" by director Oliver Stone, Bharara said, "greed, sometimes, is not good."
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Rajaratnam and his wife were also major contributors to a number of Democratic campaigns, giving a total of $118,000 to, among others, the Senate campaigns of Hillary Clinton and Chuck Schumer and the presidential campaigns of Mrs. Clinton and Barack Obama.
"He was big with Hillary and then jumped over to Obama after Hillary lost," said one Democratic party figure involved in fundraising.
Associates of Rajaratnam formed a Tamils for Clinton fund raising group for her presidential campaign and sought her help in getting the Tamil Tigers taken off the State Department's Designated Terror List.
"You shouldn't lump all terrorists together," Sen. Clinton said in 2007. Members of the Tamils for Clinton met with former President Bill Clinton in Dec. 2007 to press their case.
Rajaratnam is also a major trustee of the American India Foundation, which is a member of the Clinton Global Initiative. President Clinton is the Foundation's honorary chair, and has publicly thanked Rajaratnam and his wife for their multi-million dollar support.
Nagaratnam Ranjithan, the President of the U.S. branch of TRO, told ABC News in 2008 that his organization has nothing to do with terrorism: "I think we got into trouble because we did so much work after the tsunami, and the Sri Lankan government was not all appreciative of it. The people are suffering because we have a few people who told us to stop."
Raj Rajaratnam's Alleged Ties To Terrorism
Ranjithan's home was raided by the FBI in 2006 because of his ties to TRO.
U.S. Attorney for Southern District of New York Preet Bharara called the hedge fund insider trading case brought by his office today, "the largest hedge fund insider trading case ever charged."
Paraphrasing Gordon Gecko, the fictional character from the 1987 film "Wall Street" by director Oliver Stone, Bharara said, "greed, sometimes, is not good."