FBI: “Former Sandia Corporation Scientist Pleads Guilty to Taking Government Property to China”

August 26, 2014

The Federal Bureau of Investigation (FBI) on August 25, 2014 released the following:

“ALBUQUERQUE— Jianyu Huang, a scientist formerly employed by Sandia Corporation (Sandia) at Sandia National Laboratories (SNL), pleaded guilty this afternoon to making a false statement and unlawfully transporting converted government property in interstate and foreign commerce. The guilty plea was announced by U.S. Attorney Damon P. Martinez and Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division.

Huang, 46, a naturalized U.S. citizen from the People’s Republic of China who resides in Albuquerque, N.M., was arrested in June 2012, on a six-count indictment charging him with misusing U.S. government resources and equipment to conduct research for Chinese research institutions and with falsely stating that he did not intend to take U.S. government equipment with him on a trip to China. The indictment subsequently was superseded to add an interstate transportation of converted property charge and a theft of government property charge. Huang was employed by Sandia until his employment was terminated in late April 2012.

SNL is a government-owned research facility operated by Sandia Corporation for the U.S. Department of Energy (DOE) National Nuclear Security Administration (NNSA) that is responsible for ensuring the safety of the nation’s nuclear stockpile; enhancing the security of energy and other critical resources; reducing the proliferation of weapons of mass destruction; addressing threats to national security; and protecting the nation against terrorism. The Center for Integrated Nanotechnologies (CiNT) is a DOE user facility and science research center devoted to establishing scientific principles that govern the design, performance, and integration of materials on the atomic and molecular scale, located at SNL.

In light of the sensitivity of SNL’s work, all Sandia employees are required to report to the Sandia Office of Counterintelligence (SOC) any substantive relationship with foreign nationals, including associations that involve meeting and sharing work-related information. Sandia employees also are required to submit to interviews with SOC before international travel on official business, and are prohibited from bringing government-owned equipment on international travel without prior approval.

Huang was employed by Sandia at CiNT, where he worked in an unclassified open science facility without access to classified national security information. As a Sandia employee, Huang was prohibited from bringing government-owned equipment on international travel without prior approval.

Counts 1 through 5 of the second superseding indictment charged Huang with federal program fraud and alleged that between Jan. 2009 and Jan. 2012, Huang unlawfully and without authority used DOE equipment, materials and property to conduct research for businesses and universities in the People’s Republic of China. Count 6 charged Huang with making a false statement charge to a federal officer and alleged that, in June 2011, Huang falsely represented to a counterintelligence officer that he would not take any U.S. government electronic equipment with him on an upcoming trip to the People’s Republic of China. The statement was false because Huang knew that he intended to take a U.S. government computer and hard-drive to the People’s Republic of China on that trip, and did in fact take that equipment with him. Count 7 charged Huang with the interstate transportation of converted property charge and alleged that between June 30, 2011 and July 18, 2011, Huang unlawfully transported a DOE-owned laptop computer and computer-related media in interstate and foreign commerce. Count 8 charged Huang with an embezzlement charge and alleged that between April 25, 2012 and June 2, 2012, Huang embezzled electronic files and documents, including research proposals, belonging to DOE that came into his possession by virtue of his employment with SNL.

During his plea hearing this afternoon, Huang pled guilty to Counts 6 and 7 of the second superseding indictment. In his plea agreement, Huang admitted taking a trip to China in July 2011, for the purpose of attending and making a presentation at a research conference. Huang acknowledged that in seeking and obtaining Sandia’s permission to participate in the conference, he represented that he would not take any DOE-owned equipment with him. Huang also admitted deliberately lying to a counterintelligence office when he made the representation because he intended to take his DOE-owned laptop on the trip.

Huang admitted taking a DOE-owned laptop computer with him when he traveled to China on June 30 and July 1, 2011, even though he knew that he did not have permission to do so. In so doing, Huang unlawfully converted the laptop computer to his own use. According to Huang’s plea agreement, U.S. Customs and Border Protection agents seized the DOE-owned laptop from Huang’s baggage when he returned to the United States on July 18, 2011, after Huang admitted that he did not have permission to take the laptop computer out of the country.

Under the terms of the plea agreement, Huang will be sentenced to a year and a day in federal prison followed by a term of supervised release to be determined by the court. Huang’s sentencing hearing has yet to be scheduled.

The case was investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Jonathon M. Gerson.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Thirteen Individuals Indicted in an Alleged Health Care Fraud and Drug Distribution Scheme

March 20, 2013

The Federal Bureau of Investigation (FBI) on March 19, 2013 released the following:

“Five Doctors, Four Pharmacists, and Home Health Agency Owner Among Those Indicted in Follow-Up to the Babubhai Patel Case

Thirteen individuals have been charged in a large-scale health care fraud and drug distribution scheme, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by Special Agent in Charge Robert L. Corso of the Drug Enforcement Administration, Special Agent in Charge Robert D. Foley, III of the Federal Bureau of Investigation, and Lamont Pugh, Special Agent in Charge of the Inspector General of the Department of Health and Human Services.

The superseding indictment, unsealed yesterday, adds 13 new defendants and new charges to a 2011 indictment, which charged Canton Pharmacist Babubhai ‘Bob” Patel with overseeing a massive health care fraud and drug distribution ring at more than 20 pharmacies that he owned and controlled in metro-Detroit.

The 13 new defendants named in the superseding indictment include five doctors, four pharmacists, and a home health agency owner:

  • pharmacist Mehul Patel, 34, of Canton
  • pharmacist Pradeep Pandya, 49, of Grand Blanc
  • pharmacist Vikas Sharma, 34, of Windsor
  • pharmacist Mukesh Khunt, 33, of Toronto
  • physicians Richard Utarnachitt, 71; of Clinton Township
  • physician Ruben Benito, 72, of Madison Heights
  • physician Javaid Bashir, 59, of Jackson
  • physician Carl Fowler, 60, of West Bloomfield
  • physician Rajat Daniel, 47, of West Bloomfield
  • home health agency owner Vinod Patel, 40, of Canton
  • business associate Atul Patel, 31, of Canton
  • marketer Anthony Macklin, a.k.a. “Jimbo,” of Detroit
  • marketer Michael Thoran, a.k.a. “Ace,” also of Detroit

The 21-count superseding indictment charges that Babubhai Patel was the owner and controller of approximately 26 Michigan pharmacies. The indictment alleges that Babubhai Patel would offer and provide kickbacks, bribes, and other illegal benefits to physicians to induce those physicians to write prescriptions for patients with Medicare, Medicaid, and private insurance. Patel would also direct that those prescriptions be presented to one of the Patel Pharmacies for billing. In exchange for their kickbacks and inducements, the physicians would write prescriptions for the patients and bill the relevant insurers for services supposedly provided to the patients without regard to the medical necessity of those prescriptions and services. The physicians would direct the patients to fill their prescriptions at one of the Patel Pharmacies, where Babubhai Patel and his pharmacists would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the medications were medically unnecessary and, in many cases, never provided. Patients were recruited into the scheme by patient recruiters or “marketers,” who would pay kickbacks and bribes to patients in exchange for the patients’ permitting the Patel Pharmacies and the physicians associated with Patel to bill their insurance for medications and services that were medically unnecessary and/or never provided.

The indictment further alleges a conspiracy to distribute controlled substances at the Patel pharmacies to facilitate the submission of false and fraudulent claims to Medicare, Medicaid, and private insurers. According to the indictment, Babubhai Patel and his associates paid physicians kickbacks for prescriptions for controlled substances for their patients and directed those patients to fill the prescriptions at a Patel Pharmacy. The controlled substances included the Schedule II drug oxycodone (Oxycontin), the Schedule III drug hydrocodone (Vicodin, Lortab), the Schedule IV drug alprazolam (Xanax), and the Schedule V drug cough syrup with codeine. According to the indictment, prescriptions for these drugs were written outside the course of legitimate medical practice. Babubhai Patel and his pharmacists would then dispense the controlled drugs to patients without medical necessity. The distribution of controlled substances in this manner was intended, in part, as a kickback to the patients for agreeing to enable their insurance cards to be billed for medications purportedly dispensed at the Patel Pharmacies. The indictment also alleges that Babubhai Patel and his pharmacists dispensed controlled substances outside the scope of legitimate medical practice to patient recruiters or “marketers,” as a kickback for their efforts in to recruit patients into the scheme.

In addition to his pharmacies, the indictment alleges that Babubhai Patel had an ownership interest in a home health agency managed by his brother, Vinod Patel. The indictment alleges that Vinod Patel, Babubhai Patel, and others bribed physicians and other referral sources for referrals to that home health agency and then billed the Medicare program for home health services that were medically unnecessary and never provided.

Of the 26 defendants originally charged in the indictment, six, including Babubhai Patel and four pharmacists, were convicted at a trial last summer. Fifteen additional defendants, including six pharmacists and two doctors, have pleaded guilty in the case. The five remaining defendants whose charges were renewed in the superseding indictment are set for trial on June 10, 2013. On February 1, 2013, Babubhai Patel was sentenced to 17 years’ imprisonment by U.S. District Judge Arthur J. Tarnow.

“Taxpayers fund Medicare and Medicaid to provide health care for needy citizens,” McQuade said. “We hope that doctors and pharmacists will take note that if they exploit these programs for personal profit, they will face serious consequences.”

Robert L. Corso, Special Agent in Charge of DEA’s Detroit Field Division stated, “Confronting the illegal diversion and abuse of controlled pharmaceuticals is a top priority of DEA and our law enforcement partners. Today’s indictments, particularly of the medical professionals are significant. It is alleged that these individuals abused their positions of trust and endangered the lives of countless people by illegally distributing opiate painkillers and depressants throughout southeast Michigan. This investigation makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”

FBI Special Agent Robert Foley stated, “Dishonest health care providers and pharmacists who exploit Medicare and Medicaid through fraudulent billing and other schemes will be held accountable for their crimes. The FBI remains committed to investigating this type of fraud and bringing those who abuse the system to justice.”

“Schemes involving the illegal diversion and/or distribution of controlled substances go hand and hand with the fraudulent billing of Medicare and other health care programs,” said Lamont Pugh, III, Special Agent in Charge of the U.S. Department of Health & Human Services, Office of Inspector General—Chicago Regional Office. “The OIG and our law enforcement partners are acutely aware of the potential for those who commit health care fraud to utilize this blended approach when seeking to line their pockets with tax payer dollars. The indictments and arrests announced today illustrate our combined commitment and effort to protect the safety and well-being of the public and as well as the health care programs they rely upon.”

The investigation in this case was handled by the Drug Enforcement Administration, the Federal Bureau of Investigation, and the Department of Health and Human Services Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys John K. Neal and Wayne F. Pratt.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Physician Pleads Guilty to Conspiracy to Commit Health Care Fraud Violation

October 10, 2012

The Federal Bureau of Investigation on October 10, 2012 released the following:

“NEW ORLEANS— Dr. Jack Voight, age 81, of Metairie, Louisiana pleaded guilty yesterday before U.S. District Court Judge Lance M. Africk to conspiracy to commit health care fraud, announced U.S. Attorney Jim Letten.

According to the second superseding indictment, Voight participated in a criminal organization for the purpose of fraudulently billing Medicare and Medicaid. Patients went to the medical clinics for medical tests that were not performed and not medically necessary. Patients were moved between the various clinics to repeatedly perform the same unnecessary tests. According to the superseding bill of information and indictment, the doctors, including Voight, gave the patients prescriptions for drugs, usually narcotics, for their cooperation.

Thereafter, bills for the false and unnecessary services were submitted to Medicaid and Medicare by a third party medical claims processing and billing company that worked with other New Orleans-area clinics that have already entered guilty pleas.

Count 32 of the superseding indictment carries a possible maximum sentence of 10 years’ imprisonment. Sentencing for Voight has been set for January 10, 2012.

Artem Gasparyan, Anahit Petrosyan, Vadim Mysak, Daria Litvinova, Ernestine Girod, Anna Aivazova, Aram Khlgatian, Jo Ann Girod; and the medical clinics, Health Plus Consulting Inc., Saturn Medical Group, New Millennium Medical Group, Inc.; and the biller, Solo Lucky Claims Processing Inc., have already pleaded guilty and most are awaiting sentence.

The investigation was conducted by special agents of the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of Inspector General; and the Louisiana Department of Justice, Medicaid Fraud Control Unit. The case is being prosecuted by Assistant U.S. Attorneys Patrice Harris Sullivan, G. Dall Kammer, and Jordan Ginsberg.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Five Individuals Charged in Alleged Connection with Death of a Customs and Border Protection Border Patrol Agent; $1 Million FBI Reward Announced

July 9, 2012

The Federal Bureau of Investigation (FBI) on July 9, 2012 released the following:

Individuals Charged Are Allegedly Responsible for Death of Agent Brian Terry

TUCSON, AZ— The indictment charging five individuals involved in the death of United States Border Patrol Agent Brian Terry was unsealed today in Tucson, Arizona, and a reward of up to $1 million for information leading to the arrest of four fugitives was announced by Department of Justice officials.

According to the indictment, Manuel Osorio-Arellanes, Jesus Rosario Favela-Astorga, Ivan Soto-Barraza, Heraclio Osorio-Arellanes, and Lionel Portillo-Meza are charged with crimes including first-degree murder, second-degree murder, conspiracy to interfere with commerce by robbery, attempted interference with commerce by robbery, use and carrying a firearm during a crime of violence, assault on a federal officer, and possession of a firearm by a prohibited person. A sixth defendant, Rito Osorio-Arellanes, is charged only with conspiracy to interfere with commerce by robbery.

The 11-count third superseding indictment (Case Number: CR-11-0150-TUC-DCB-BPV), which was handed up by a federal grand jury in the District of Arizona on November 7, 2011, alleges that on December 14, 2010, five of the defendants (Manuel Osorio-Arellanes, Jesus Rosario Favela-Astorga, Ivan Soto-Barraza, Heraclio Osorio-Arellanes, and Lionel Portillo-Meza) engaged in a firefight with Border Patrol agents. During the exchange of gunfire, Agent Terry was shot and killed. The indictment alleges that the defendants had illegally entered the United States from Mexico for the purpose of robbing drug traffickers of their contraband. In addition to the murder of Agent Terry, the indictment also alleges that the five defendants assaulted Border Patrol Agents William Castano, Gabriel Fragoza, and Timothy Keller, who were with Agent Terry during the firefight.

United States Attorney Laura E. Duffy said, “Agent Terry died in the line of duty while protecting his country. But he was more than a federal agent—he was a son, a brother, a co-worker, and a friend to many. The indictment unsealed today reflects the progress our dedicated law enforcement team has made piecing together this complex murder case. But there is more work to be done and we will not rest until we bring justice to the family of Brian Terry.”

“United States Border Patrol Agent Brian Terry made the ultimate sacrifice in December of 2010, while protecting our border,” stated James L. Turgal Jr., FBI Special Agent in Charge, Phoenix Division. “Today’s announcement is an important step forward in the pursuit of justice for Border Patrol Agent Terry and his family. It is our hope that the publicity surrounding this case will lead to information concerning the whereabouts of the remaining four fugitives. The FBI and our law enforcement partners will continue to pursue those individuals responsible for the murder of Border Patrol Agent Brian Terry.”

Manuel Osorio-Arellanes has been in custody since his arrest the night of the shooting. Rito Osorio-Arellanes has been in custody since December 12, 2010, when he was arrested by Border Patrol agents on immigration charges. The indictment is being unsealed today in order to seek the public’s assistance in locating the fugitive defendants.

This case is being prosecuted in federal court in Tucson by attorneys from the Southern District of California, Special Attorneys Todd W. Robinson, David D. Leshner, and Fred A. Sheppard. The U.S. Attorney’s Office for the District of Arizona is recused. This case is being investigated by the Federal Bureau of Investigation.

An indictment is a formal charging document and defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.

Wanted Posters
Ivan Soto-Barraza
Heraclio Osorio-Arellanes
Jesus Rosario Favela-Astorga
Lionel Portillo-Meza”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Former Corporate Chairman of Consulting Firm and Board of Director Rajat Gupta Found Guilty of Insider Trading in Manhattan Federal Court

June 15, 2012

The Federal Bureau of Investigation (FBI) on June 15, 2012 released the following:

“Gupta Convicted on Four Counts Arising from an Insider Trading Scheme in which He Provided Confidential Information About Goldman Sachs to His Business Partner and Friend, Raj Rajaratnam

Preet Bharara, the United States Attorney for the Southern District announced that Rajat K. Gupta, former corporate chairman of an international consulting firm and a member of the Boards of Directors of The Goldman Sachs Group Inc. (“Goldman Sachs”) and the Procter & Gamble Company (“P&G”), was found guilty today by a jury in Manhattan federal court of conspiracy and securities fraud crimes stemming from his involvement in an insider trading scheme with his business partner and friend, Raj Rajaratnam, the founder and former head of the Galleon Group.

Manhattan U.S. Attorney Preet Bharara stated, “Rajat Gupta once stood at the apex of the international business community. Today, he stands convicted of securities fraud. He achieved remarkable success and stature, but he threw it all away. Having fallen from respected insider to convicted inside trader, Mr. Gupta has now exchanged the lofty board room for the prospect of a lowly jail cell. Violating clear and sacrosanct duties of confidentiality, Mr. Gupta illegally provided a virtual open line into the board room for his benefactor and business partner, Raj Rajaratnam.

“Almost two years ago, we said that insider trading is rampant, and today’s conviction puts that claim into stark relief. It bears repeating that, in coordination with our extraordinary partners at the FBI, we will continue to pursue those who violate the securities laws, regardless of status, wealth, or influence. I thank the members of the jury for their time, attention, and service, and the dedicated career prosecutors from my office who so ably tried this case.”

According to the superseding indictment filed in Manhattan federal court, other court documents, statements made at trial, and court proceedings:

During all relevant times, Gupta and Rajaratnam maintained a close personal and business relationship. Among other things, Gupta described Rajaratnam as a close friend; Gupta invested his money in Galleon funds while he served as chairman of the international consulting firm; Gupta co-owned a fund of funds with Rajaratnam, which invested its money in Galleon funds; Gupta served as chairman of a $1.5 billion private equity firm called NSR in which Rajaratnam invested approximately $50 million and served on the investment committee; and Gupta was given the position of Chairman of Galleon International in 2008 and expected to receive 15 percent of that fund’s performance fees.

From 2007 through January 2009, Gupta repeatedly disclosed material, non-public information (“inside information”) that he acquired in his capacity as a member of the Board of Directors of Goldman Sachs, with the understanding that Rajaratnam would use the inside information to purchase and sell securities. Rajaratnam, in turn, caused the execution of transactions in the securities of Goldman Sachs on the basis of the inside information and shared the inside information with others at Galleon, thereby earning illegal profits, and illegally avoiding losses, of millions of dollars. On separate occasions that were proven at trial, Gupta gave Rajaratnam inside information that included highly sensitive and secret information. Illegal tips that were proven at trial include the following:

The September 23, 2008 Goldman Sachs Tip

The evidence at trial proved that, on September 23, 2008, within approximately 60 seconds after the conclusion of a Goldman Sachs telephonic board meeting in which the Board approved a $5 billion investment by Berkshire Hathaway, Gupta spoke with Rajaratnam. Immediately following the call, Rajaratnam directed two separate traders to purchase approximately $43 million of Goldman Sachs stock within minutes before the close of trading. During two court-authorized wiretapped conversations the following morning on September 24, 2008 between Rajaratnam and his principal trader and coconspirator, Ian Horowitz, Rajaratnam said that he received a call at 3:58 p.m. the day before telling him “something good’s gonna happen” at Goldman Sachs, that he directed the two traders to buy Goldman shares before the market closed, and that he could not yell this information out on Galleon’s trading floor. The evidence at trial showed that, based on Gupta’s illegal tip, Rajaratnam and co-conspirator Gary Rosenbach earned over $1 million in illegal profits.

The October 23, 2008 Goldman Sachs Tip

The evidence at trial proved that, on October 23, 2008, Gupta participated on a Goldman Sachs Board posting call during which he learned that Goldman Sachs was losing money for the quarter, which Goldman Sachs had never done since becoming a public company. Just 23 seconds after that call ended, Gupta called Rajaratnam. Following that call, at the first available opportunity after the stock market reopened, Rajaratnam started to sell his entire holdings in Goldman Sachs stock. Later that day, during a court-authorized wiretapped conversation, Rajaratnam explained to a senior portfolio manager at Galleon International that Rajaratnam had spoken with a member of the Board of Goldman Sachs and learned that Goldman Sachs was losing money during the quarter while Wall Street analysts expected the company to make money. The evidence at trial showed that, based on Gupta’s illegal tip, Rajaratnam was able to avoid losses of several million dollars.

* * *

Gupta, 63, of Westport, Connecticut, was found guilty of one count of conspiracy to commit securities fraud and three counts of securities fraud. He was acquitted on two securities fraud counts. The conspiracy count carries a maximum sentence of five years in prison and a maximum fine of the greater of $250,000 or twice the gross gain or loss from the offense. Each of the securities fraud counts carries a maximum sentence of 20 years in prison and a fine of $5 million. Gupta will be sentenced on October 18, 2012.

Rajaratnam was convicted in a jury trial on May 11, 2011 of 14 counts of conspiracy and securities fraud. He was sentenced on October 13, 2011 to 11 years in prison and was ordered to pay forfeiture in the amount of $53,816,434 and a $10 million fine.

Mr. Bharara praised the outstanding efforts of the FBI. He also thanked the SEC for its assistance in the investigation.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which U.S. Attorney Bharara serves as a co-chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

Assistant U.S. Attorneys Reed Brodsky and Richard C. Tarlowe are in charge of the prosecution.

– Statement by FBI New York Assistant Director in Charge Janice K. Fedarcyk on Gupta’s conviction”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Appeal

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.