DEVENS, Mass. – The hedge fund founder handed the longest prison term ever given for insider trading reported to a federal facility in Massachusetts early Monday afternoon to begin serving his 11-year sentence.
Raj Rajaratnam reported to the Federal Medical Center in Devens, U.S. Bureau of Prisons spokeswoman Traci Billingsley said. The prison for men is located in north-central Massachusetts, about 40 miles west of Boston. The facility on decommissioned military base Fort Devens houses inmates who require specialized or long-term medical or mental health care.
The Sri Lanka native and one-time billionaire lost his last-minute effort last week to get a federal appeals court to let him remain free pending appeal. He was convicted in May of trading on inside information from 2003 through 2009.
Prosecutors said he made more than $70 million in illegal profits in an insider trading scheme that enlisted friends and associates in the hedge fund industry and at public companies to provide inside information about earnings, mergers and acquisitions.
The 54-year-old Rajaratnam had asked for leniency because of health problems. The judge noted at Rajaratnam's sentencing that he has advanced diabetes and needs a kidney transplant.
His sentence, though the longest in history for insider trading, was about half of what the government had sought.
Prosecutors had called the case against Rajaratnam the biggest insider trading probe in history. It resulted in the convictions of more than two dozen people and led to a spinoff probe of Wall Street researchers who enabled corrupt public company employees to pass along inside information as legitimate research to hedge fund managers. The investigation also made unprecedented use of wiretaps, allowing jurors at Rajaratnam's trial to hear dozens of taped conversations between Rajaratnam and co-conspirators.