After a long period of silence, Raj Rajaratnam is back, and has just put up a repository for his defence.
The defence team is also making an attempt to suppress the most crucial evidence
· The government deliberately and/or recklessly misled the Court about the credibility of Roomy Khan, the government star’s witness. Agent Kang’s affidavit falsely asserted that government witness Roomy Khan — whose statements were the focal point of the government’s probable cause allegations and the resulting wiretap authorization — had not yet been charged with a crime and was a “reliable” witness. In fact, Ms. Khan was convicted of wire fraud in 2002, made false allegations against Mr. Rajaratnam which the government acknowledged it could not substantiate despite an “exhaustive” investigation, destroyed evidence, colluded with another witness to obstruct the government’s investigation and committed additional crimes between 2004 and 2007-none of which was disclosed to the authorizing Court.
· Ms. Khan is an unreliable witness by the government’s own determination. The Motion indicates that in a wiretap extension application, the government quietly dropped the label “reliable” from their description of Ms. Khan’s evidence, apparently hoping the Court would not notice. Nor did they inform the Court or in subsequent applications that Ms. Khan again lied and again obstructed justice by obtaining a cell phone under false pretences and using it to fabricate a story with a co-conspirator who, no doubt warned off by Ms. Kahn’s call, remains a fugitive from justice today. If the government itself no longer considered Khan to be reliable, it had a duty to tell the Court and to discontinue its reliance on her in its affidavits. As a result, the Motion maintains that all of the affidavit’s references to Ms. Khan’s evidence must be stricken.
· The government deliberately and/or recklessly mischaracterized publicly available information as inside information that benefitted Mr. Rajaratnam. Agent Kang’s affidavit was false and misleading in summarizing phone calls about Intel and Xilinx selectively and in a manner that implied improper conduct where none existed. In fact, there is no evidence whatsoever of insider trading on these calls, the information discussed was publicly available, his predictions were wrong and Mr. Rajaratnam had no trading positions in either company at the time — facts which Agent Kang concealed from the Court.
· The government failed to inform Court of a lengthy government investigation of Mr. Rajaratnam dating back to 2001 – material information that would have led the Court to deny the wiretap request. Further, Agent Kang misled the court by stating that the investigation of Mr. Rajaratnam started in late 2007, when in fact it began in 2001. Title III requires that wiretap applications contain a “full and complete” statement demonstrating the “necessity” of a wiretap that conventional investigative techniques had proven unsuccessful and/or futile. Agent Kang failed to reveal from the application the material fact of a nine-year SEC investigation with which Mr. Rajaratnam and his company, Galleon, cooperated fully. Indeed, the investigation provided the government with four million pages of Galleon records (including instant messages, emails, trade data, and business records), and dozens of hours of sworn testimony, including a lengthy deposition of Mr. Rajaratnam.
The Motion further details how the government intercepted Raj Rajaratnam’s calls in violation of Mr. Rajaratnam’s Fourth Amendment Rights and safeguards under Title III of the Safe Streets Act of 1968. Title III has a specific and limited grant of authority over the use of wiretaps and insider trading investigations are not listed among the crimes authorised by Congress. As a result, wiretaps are not authorised for use to investigate insider trading
· Securities fraud is not an offence for which Congress authorizes the use of wiretaps. No precedent exists for the authorization of a wiretap in an insider trading investigation. Congress has determined, as a matter of law, that wiretaps are not necessary to investigate securities fraud generally, or insider trading in particular. Because wiretaps are not authorised for insider trading investigations under Title III, they are expressly prohibited and fall outside the scope of the limited grant of authority outlined in Title III.
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