Kim Kardashian-inspired law sees insider trading scammer Raj Rajaratnam getting early release from prison
The First Step Act allows some federal inmates over 60 years old or those who face terminal illnesses to serve the rest of their respective sentences at home.
Former billionaire Raj Rajaratnam has been released early from prison owing to a new Kim Kardashian-inspired law after he became the highest-profile hedge fund manager to be convicted in an insider trading probe.
In 2011, a Manhattan jury convicted Rajaratnam before he was sentenced to 11 years in prison, fined $10 million, and forced to forfeit another $53.8 million, Daily Mail reports. Rajaratnam was released from prison early in July, per Bloomberg, and is currently living with his family at their lavish Upper East Side apartment in Manhattan. That said, the 62-year-old can partly credit Kardashian for qualifying for early release under the First Step Act, one of a series of criminal justice reforms lobbied for by the reality star and signed into law by President Trump last year.
Without the latest reforms, Rajaratnam would have been eligible for release from the Federal Medical Center Devens, a prison facility located outside Boston, in July 2021. Rajaratnam reaped benefits from the act, according to Bloomberg, as it allows some federal inmates over 60 years old or those who face terminal illnesses to serve the rest of their respective sentences at home.
The judge who jailed Rajaratnam did not place a tougher sentence on him because he faced "imminent kidney failure" after suffering from advanced diabetes. During the sentencing, the judge referred to a report from Rajaratnam's defense saying his doctors had recommended starting dialysis as soon as possible and that they had already initiated the process for obtaining a donor kidney for transplant.
According to the report, Rajaratnam's application for house arrest as an "elderly offender" is just one of more than 240 applications that have been granted since the First Step Act became law. Having said that, while the Sri Lanka native is mostly restricted to his Manhattan apartment for the rest of his term, he is allowed to work outside his home during the day. What's more? The former hedge-fund honcho isn't required to wear an electronic bracelet either.
Rajaratnam was one of 80 defendants who were convicted in an insider trading investigation led by US Attorney Preet Bharara. The former billionaire was accused of making a whopping $63.8 million from 2003 to 2009 after he illegally traded in stocks such as eBay Inc, Goldman Sachs Group Inc and Google, now called Alphabet Inc. The Sri Lankan native was subsequently convicted on 14 securities fraud and conspiracy counts. Rajaratnam amassed billions after co-founding the Galleon Group LLC in 1997, which went on to become one of the world's largest hedge funds. While traders in the hedge fund industry are known to do whatever it takes to try and get an edge over their rivals, the Galleon case sent shock waves through Wall Street.
Rajaratnam, along with other defendants, had reportedly mined corporate insiders for corporate earnings or details of mergers which were yet to be released. The probe incorporated extensive use of secret FBI phone taps, which are usually reserved for organized crime or drug trafficking investigations. Nonetheless, the case was eventually deemed a major victory for the Justice Department.