Many assumed last week that Raj Rajaratnam’s defence attorneys were enjoying the roll-out of the lies in Roomy Khan’s past, especially the one about her prior fraud conviction.
As we noted, such a previous conviction would be a great way to bring up Khan’s seemingly flexible relationship with the rules. And if she was dishonest then, the defence would say, how do we know she’s not lying now?
Except Rajaratnam’s attorneys probably already knew (and if they did not, well yesterday was not fun) what has now made it to the press.
DealBook: As far back as 1998, before he rose to prominence in the rarefied world of hedge funds, Mr. Rajaratnam was passed confidential information from an Intel employee who, the authorities now say, went on to play a crucial role in a vast insider-trading scheme involving some of the nation’s largest technology companies…But years before the current case erupted, [Roomy] Khan was caught passing information to a representative of the Galleon hedge fund, who, according to a person with knowledge of the case, was Mr. Rajaratnam. Ms. Khan was prosecuted in federal court in 2000, but the authorities did not pursue Mr. Rajaratnam or his firm, Galleon, in connection with that case.
So now, instead of the defence attorneys itching to get the fraud conviction into evidence, it might be prosecutors who want to strike first. Ropes & grey partner Christopher Conniff told DealBook that evidence from Khan’s earlier prosecution may be allowed if it can be established that Khan and Rajaratnam’s actions were part of a continuing conspiracy.
Prosecutors may therefore be able to bolster Khan’s testimony with the fraud conviction, in a way, by showing she and Rajaratnam have had an information-sharing relationship for a long time. “Roomy was doing the wrong thing more than a decade ago, but her partner-in-crime was Raj,” could be powerful evidence to a jury.
If defence attorneys try to keep that evidence out, they’d effectively be forfeiting the opportunity to bring up the conviction when trying to impeach Khan. What appears to be the long and interesting relationship of Rajaratnam and Khan is going to create all sorts of strategy questions for the lawyers.
That, of course, is always the case when a longtime comrade turns federal source.
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