NEW YORK — Federal prosecutors said Tuesday they will file new charges against billionaire hedge fund operator Raj Rajaratnam alleging he made at least $36 million from trades based on insider information, double what the government previously believed.
The government's plans were outlined in court papers filed in U.S. District Court in Manhattan. Prosecutors oppose a request by lawyers for Rajaratnam to reduce his bail from $100 million to $25 million. Government attorneys said a rewritten indictment will be brought.
Prosecutors said they still believe Sri Lankan-born Rajaratnam should be detained without bail because he is likely to flee the country because of the substantial jail time he could face after he was indicted last month on 11 felony counts of conspiracy and insider trading.
They said he has the money and connections overseas to run and no bail would guarantee he would show up for trial.
Since Rajaratnam's October arrest, the government has strengthened its case after discovering his trades led to at least $37 million in profits, prosecutors wrote, noting there were recorded telephone calls that provide "overwhelming evidence of his guilt."
They said the government has learned that Rajaratnam obtained inside information between March and July 2006 about the acquisition of ATI Technologies Inc. by Advanced Micro Devices Inc., enabling him to make at least $19 million in illegal profits.
They said a conviction would likely lead to a prison term in excess of 15 years. Previously, they had said he would likely face no more than 10 years in prison.
Dan Gagnier, a spokesman for Rajaratnam, declined to comment. His lawyer did not respond to an e-mail request for comment.
Prosecutors also say Rajaratnam should be held without bail because he is at a greater risk to flee with his ties to New York dissolving. They say he initially tried to salvage the Galleon Group hedge fund he founded but the effort failed, causing it to enter the liquidation process.
The government said Rajaratnam has assets worth between $25 million and $35 million in Sri Lanka and owns property in Canada, Singapore and London.
As it has done before, the government noted that Rajaratnam is described by Forbes magazine as the world's 559th richest person, worth between $1.3 billion and $1.8 billion.
"The defendant's enormous wealth, coupled with his international ties, substantially heighten the risk that he will flee," prosecutors wrote.