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Raj Rajaratnam May Have Compensated A Few Prisoners To Keep Himself In The Lifestyle He'd Grown Accustomed To

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Last August, a report came out claiming that Raj Rajaratnam was having the time of his life in prison. As someone who went to great lengths to avoid going to jail (not so much by staying on the right side of securities laws but by paying a high-priced lawyer to accuse people churning out supposedly slanted coverage of his client of "sucking [U.S. Attorney for the Southern District of New York] Preet Barhara's teat"), this revelation came as a surprise. As a hedge fund billionaire who'd grown used to a luxurious lot in which he paid many people to keep him comfortable and content, there was an expectation that life on the inside would come as a rude awakening. And, yet, the report claimed that Raj was "reigning like a king," "doing his time in the lap of luxury compared to other inmates," with a set-up that included:

  • A private toilet
  • A shared balcony
  • An adjustable bed
  • "A very delightful guy doing all sorts of stuff for him-- sort of like a 'manservant'"
  • An inmate who cooks for him using a microwave when he "doesn't want to hoof it to the dining hall"

Unfortunately for anyone anticipating doing time on the inside, all of these perks apparently come at a cost, according to a guy who claims Raj had to pay a number people off to arrange the manservant and en-suite, among other things.

A former driver for Raj Rajaratnam has sued the one-time billionaire, claiming he was fired for complaining about secret wire transfers the founder of the Galleon Group hedge fund made to fellow prisoners following his conviction for insider trading. Peter Malaszuk, a longtime assistant to Rajaratnam, sued his former boss, his wife, and a company she owns, saying the wire transfers were made to 20 inmates at the prison for several months, in violation of federal law. The transfers were done at Rajaratnam's direction "in order to control such prisoners and obtain special treatment and accommodations in prison," according to the lawsuit, filed Friday in federal court in New Haven, Connecticut...Malaszuk contended he was wrongfully fired for both complaining about the wire transfers as well as the use of an improperly notarized immigration document he said was used for Rajaratnam's son. He said he learned about the transfers from his former boss during visits to see him at the Federal Medical Center at Devens in Ayer, Massachusetts, where Rajaratnam is incarcerated.

During prison visits, Malaszuk said Rajaratnam would often give him pieces of paper with names and inmate numbers for prisoners and contact information for family members to wire money through Western Union. Rajaratnam told Malaszuk to use false names with Western Union for identifying the sender of the funds and told him to destroy the paper he gave him with the names, the lawsuit said.

Rajaratnam's ex-driver sues, claims secret payments to prisoners [Reuters]

Related: Raj Rajaratnam Is Having The Time Of His Life On The Inside


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