Billionaire Rajaratnam faces new charges in insider trading scam

NEW YORK - Galleon Group founder and billionaire Raj Rajaratnam, accused of masterminding the largest insider-trading scam in US history, faces an additional 40 years in prison under a new indictment.

Federal prosecutors added two new securities fraud charges against the Tamil Sri Lankan billionaire in an indictment filed in a Manhattan federal court Wednesday.

The superseding indictment also strengthens several of the other 17 charges against the former hedge fund chief, increases the amount of ill-gotten gains he allegedly netted and lengthens the time frame of the scheme.

If convicted of all of the charges, Rajaratnam, who has pleaded not guilty, could face as much as 185 years in prison.

Prosecutors are also demanding a total of $49 million in forfeitures from both Rajaratnam and his co-defendant, former New Castle Partners portfolio manager Danielle Chiesi. In the earlier indictment, prosecutors were seeking just $20.8 million.

Chiesi does not face any new counts in the indictment, but several of the 17 already levelled against her were amended with new allegations.

The new counts and allegations stem from two of the nine guilty pleas won by prosecutors in a case that has netted 21 people.

Two Indian-American executives, Anil Kumar, formerly of McKinsey & Co, and Rajiv Goel, formerly of Intel, both admitted to passing confidential information to Rajaratnam. Kumar alleges that Rajaratnam paid him as much as $2 million for the tips.