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July 18, 2012

Rajat Gupta hoping to get by (federal sentencing) with a little help from his friends

Sgt. Pepper's Lonely Hearts Club BandThis new sentencing story from Fox Business, which is headlined "Gupta Seeks Help From Friends for Lenient Sentence," has me in a Beatles mood today.  (This mood may also be the product of my being at Oxford in the UK and thinking about making a sojourn to Liverpool.  Folks reading this post in the US can think about Joe Cocker (and check out this classic live performance) for an American version of the same musical spirit.)  The story concerns a request made by a very high-profile white-collar defendant in preparation for his federal sentencing scheduled for this fall. Here are the details:

Rajat Gupta, the former Goldman Sachs board member recently convicted for providing illegal trading tips to former Galleon chief Raj Rajaratnam, has made an unusual request to former business associates and prominent acquaintances urging them to write letters of support to the judge in the case so he can receive the most lenient sentence for his crimes, the FOX Business Network has learned.

A copy of the request, obtained by FBN, even goes so far as to suggest that U.S. District Judge Jed Rakoff “would like to receive letters of support from friends and family” so the judge can “understand me as a person. This gives the judge a full idea of who I am and significantly influences the decision.”...

“I look forward to hearing from you with a positive response,” Gupta added in the request sent earlier in the month, “and thank you very much in advance.”

Gupta is scheduled to be sentenced on Oct. 18, and faces as many as 20 years in jail for securities fraud. So-called support letters of this kind have been known to prod judges to hand out more lenient sentences, though Gupta may have overplayed his hand in suggesting that Rakoff is personally requesting the letters.

The Fox Business Network has learned that Gupta sent the request to numerous people without his attorney reviewing the content.  A press official for Rakoff said there has been “no active solicitation of letters” from the judge.  FBN has also learned that after being alerted to the language in the request, Gupta’s attorney Gary Neftalis, reissued the correspondence removing the line implying the judge’s advocacy for the letters and simply pointing out that such letters of support delivered to the sentencing judge are “customary.”...

Columbia University law professor John Coffee said Rakoff is known to take letters of support seriously in doling out sentences, though he said Gupta’s aggressive pitch to friends and colleagues “is not going to help” in gaining leniency.

The aggressive tone of the letter underscores the difficult spot that Gupta finds himself in following the guilty verdict.  The former Goldman board member, and head of the giant McKinsey & Co., was cleared of two counts during his trial last month.  Yet he was convicted of several more, and is widely regarded as the most prominent business executive snared in the government crackdown on insider trading.  Among the most sensation counts Gupta was convicted on involved leaking to Rajaratnam details of a Goldman Sachs board meeting involving Warren Buffett’s infusion of cash into the firm at the height of the financial crisis.

Prosecutors showed phone records in which Gupta called Rajaratnam shortly after the board meeting and Rajaratnam purchased shares of Goldman before Buffett’s move was made public.  Rajaratnam himself was convicted of multiple counts of securities fraud and insider trading violations and is serving an 11-year sentence.  Most legal experts don’t expect Gupta to receive as lengthy of a jail term as Rajaratnam; prosecutors are likely to ask for a decade of jail time based on sentencing guidelines, but Gupta himself never traded on the inside information.  The best prosecutors could do was portray Gupta as using his inside knowledge and tips to curry favor and do business with Rajaratnam, once a billionaire fund manager and one of Wall Street top traders.

In Gupta’s favor is Rakoff’s reputation for handing less jail time than what prosecutors often recommend, which is why Gupta’s request for letters from prominent people -- many of them in fields outside of Wall Street -- is so important.  Friends of Gupta say both he and his family were hit hard by the guilty verdict, and the likelihood of jail time and the letter suggests as much....

One additional reason for the aggressive pitch may be that Gupta believes Rakoff will be less likely to cut such a prominent person a break on sentencing.  A former prosecutor who has argued cases before Rakoff says the judge is known to come down hard on white collar defendants who “should have known better.”  Rakoff sentenced attorney Marc Drier to 20 years in prison for stealing $400 million from his clients.

“Let’s face it, Gupta is a board member of Goldman and the former head of McKinsey,” the former prosecutor said. “He knows that he’s isn’t supposed to be telling people about what goes on during board meetings, and that may force Rakoff to come down harder on him than he would otherwise.”

Fox Business has made available at this link the letter referenced in its article.  I do not view the tone or wording of this letter as such a big deal; but the way in which Fox Business covers this seemingly minor pre-sentencing development confirms my sense that Gupta's sentencing will be one of the highest profile and most interesting federal sentencing cases of 2012.

Related posts on upcoming Gupta sentencing:

July 18, 2012 at 08:13 AM | Permalink


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Joe Cocker, alas, is also British.

Posted by: tb | Jul 18, 2012 8:53:09 AM

|| Lennon was right. The Giggling Guru was a shameless old fraud ||

Maharishi Mahesh Yogi:
--**-- "developed the Transcendental Meditation technique" and " claimed to offer practitioners the ability to levitate and to create world peace."

--**-- "To a sneering John Lennon, he was a money-grubbing, sex-obsessed fraud who cynically abused his influence over The Beatles and many other awed celebrities who worshipped, cross-legged, at his painted feet during the Flower Power era."

--**-- "an estate conservatively said to be worth some £600 million."

--**-- "Maharishi was a publicity-seeker with an unhealthy interest in meditating in close proximity to the Farrow sisters"

--**-- "His Holiness never meets anyone because his doctor is concerned that he might catch germs," [His media chief] Roth whispered. "He hasn't been outside for years."

--**-- He has "decided to excommunicate" the country of Great Britain.

--**-- Maharishi stated before his death to writer David Jones: "If at all, (The) Beatles became substantial by my contact."


Posted by: Adamakis | Jul 18, 2012 9:15:43 AM

tb: you are, of course, right about Cocker's nationality, and I am (only a bit) embarrassed I tried tried to claim him for the US. Maybe this post proves it is time for a decent US performer to try a go at a cover.

Posted by: Doug B. | Jul 18, 2012 9:59:39 AM

You didn't like Peter Frampton's version? (Backed by Aussies?)
Don't be so hard on yourself about Joe. His classic version was performed on a farm in upstate NY.

Posted by: Def. Atty | Jul 18, 2012 12:29:28 PM

BTW, the performance you linked to is not (despite its youtube title) the Woodstock performance. It's clearly indoors in a proper theater, with lights. The Woodstock performance was in daylight in open air.

(The above-stage lights at Woodstock collapsed before the show began. The lighting for the nighttime performances was from spotlights only.)

Posted by: Def. Atty | Jul 18, 2012 12:35:59 PM

It is certainly fair for the convicted defendant to try and obtain as many letters of support as possible. The Government actively solicits letters from victims in fraud schemes to be used against those who are to be sentenced--"Lost your money? Tell us how much and how specifically it hurt." This applies even if the victim has never heard of or had contact with the person who is convicted. The number of letters, and the extent to which the their suffering is described is certainly taken into account by judges, who should also look at and consider letters in support in their sentencing decisions.

Posted by: folly | Jul 19, 2012 9:15:45 AM

Keep it up; keep posting more n more n more.

Posted by: payday loans | Oct 20, 2012 3:57:31 AM

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