Fresh trouble for disgraced hedge fund czar.
By Deepak Chitnis
WASHINGTON, DC: Disgraced hedge fund honcho Raj Rajaratnam has been sued by his former driver, Peter Malaszuk, who alleges that his boss fired him because Malaszuk refused to take part in illegal activities that Rajaratnam supposedly ordered him to carry out.
In the lawsuit, Malaszuk – who has been with Rajaratnam as his personal chauffeur for 15 years – claims that Rajaratnam terminated his employment because he ordered the driver to do certain things that were illegal – all while he was serving his ongoing 11-year jail term.
According to the lawsuit, that illegal activity came in the form of wiring money to the families of certain inmates, which Rajaratnam wanted to do so he could gain control over his peers in prison.
Rajaratnam has been in jail since 2011, but has kept Malaszuk on his payroll despite obviously not needing a driver. The New York Post reports that Malaszuk was receiving gifts and other bonuses from Rajaratnam while he was in jail, but never reported these because he didn’t know that doing so was illegal, and a violation of prison rules.
But Malaszuk finally understood that he was being used by Rajaratnam as a pawn in his scheme to gain the upper-hand over fellow prisoners at the Federal Medical Center (FMC) Devens Prison in Massachusetts. That’s when Malaszuk decided to file the lawsuit, which also names Rajaratnam’s wife, Asha Pablo, as a co-defendant.
Although Rajaratnam’s lawyer has denied the allegations, this is not the only report of the Galleon Group founder living in the lap of luxury while serving a federal prison sentence. The Wall Street Journal’s MarketWatch also reports that Rajaratnam lives in a “very nice cell with a very nice view,†and has a private toilet and a spacious cell on the highest level of the prison which is typically reserved for very sick inmates.
Meanwhile, Rajaratnam’s younger brother, Rengan, is still fighting his own court battle on insider trading charges. Two of the counts against him – including the most serious, which carried with it a 20-year prison sentence – were dropped by federal prosecutors, leaving only a conspiracy count that could land him, at worst, five years behind bars.
A timeframe for Rengan’s verdict and possible sentencing remains vague, however. If he goes to jail, he will become the second major Indian American to be thrown into prison for insider trading with Rajaratnam; the other, famously or infamously, is Rajat Gupta, the former Goldman Sachs honcho who just began his two year-long sentence last month.