Thaindian News

New York, March 16 (IANS) Lawyers of hedge fund tycoon Raj Rajaratnam sought to discredit prosecution’s star witness Indian American Anil Kumar calling him a money launderer and tax dodger who cut a plea deal to avoid criminal charges.

Kumar, 52, former McKinsey & Co. partner, has testified in the biggest US insider-dealing trial in decades about giving Rajaratnam inside information regarding his consulting clients in exchange for more than $2 million in offshore payments.

Cross examining Kumar, in a New York Court Tuesday, John Dowd, a lawyer for Sri Lankan born Rajaratnam, said Kumar had committed “a monstrous lie” by executing Galleon account forms in his housekeeper’s name at an address in India where she didn’t live.

“You weren’t charged with money laundering, right?” Dowd, asked Kumar. “You understand they could have charged you?” “Yes.”

Highlighting Kumar’s failure to report the fees on his tax returns, Dowd said: “In fact they were fraudulent.” “Is that a question?” countered Kumar.

“It’s important to testify to make Mr Streeter happy, correct?” Dowd said, referring to the prosecutor. Kumar, who has pleaded guilty to conspiracy and securities fraud, responded that he was testifying to “uphold the law”.

Rajaratnam, 53, is facing 14 counts of conspiracy and securities fraud. He is among 26 people charged in a criminal insider-trading probe, 19 of whom have pleaded guilty.

Earlier in the day, Kumar testified that Rajaratnam had suspected federal agents were on his trail in the weeks leading up to his 2009 arrest, but had continued to pass along inside information to his associates.

During a trip to Miami, he said he and Rajaratnam swapped information about companies, “sat out on the beach” and took an evening boat trip.

“We were in deck chairs on the beach,” Kumar testified when Rajaratnam told him he was “really disappointed” because “there’s another gentleman who used to work for me who I’m told is now wearing a wire.”

Then Rajaratnam cautioned him only to call using prepaid, disposable phones.

“You should be careful,” he said, according to Kumar.

Asked by federal prosecutor Jonathan Streeter who wore the wire, Kumar said it was money manager Ali Far, a former Galleon employee. Far has also pleaded guilty to criminal charges.