Finally, the billionaire hedge fund manager Raj Rajaratnam is about to check into Federal Prison.. And, in an ironic twist for a man who made a living off market timing, the climate could not be worse for Wall Street criminals. Rajaratnam is the 54 old Sri Lankan born founder of the Galleon Group of Hedge Funds. He received an 11 year sentence. Part of this is based on his convictions, and part as a response to Rajaratnam’s apparent refusal to accept any responsibility for his actions.
So, let’s break this down and see how Raj has gotten to this desperate point and what he should have done and must start doing now.
The case of Rajaratnam is itself unique. He will be the only true billionaire who will most likely serve a ten-year plus term in Federal Prison. Think about it, most of the other Wall Street cases like Bernie Madoff, John Rigas, Richard Scrushy, Andy Fastow, Steve Madden and Martha Stewart have either received lighter sentences or do not still have big money by the time they hit the slammer. Blago will even be broke when he finally touches down at Fed Town. Raj was found guilty at trial of 14 counts of conspiracy and securities fraud including insider trading. Mistake number one! Raj could have worked out a plea agreement and faced a lesser prison term. Instead he went for broke as did his two former trading partners the Goffer brothers. In fact, Zvi Goffer received a ten-year sentence last week.
As we all know there are marches and protest all around the world right now. Occupy Wall Street has hit every major city in the United States and some overseas. There is little mercy for those who appear to have made illegal profits while many in the U.S. are struggling. Put this together with the way Raj and his team are acting and it spells FEDERAL PRISON. And I don’t mean a Federal Prison Camp. In fact, if Raj is sentenced to more that 10 years it is likely he will not be “camp” eligible for awhile and may have to start his prison term at an FCI or medium security prison like Madoff. Hey, they may even become bunkmates!
Our Criminal Justice System gives credit or “points” for accepting responsibility so start now Raj…
Many people do not know that a sentencing calculation is made up of a point system. Offense points, criminal history points and credits for accepting responsibility and pleading guilty. Yep, people also get credited points for cooperation in some cases. Raj did not plead guilty and so he has no credit points. To make matters worse for him, his lawyers have filed paperwork to try to mitigate his sentence saying Raj has a health condition but he still is appearing very grandiose. Of course this did not sit well with the U.S. Attorney’s office and will not work with the judge either. In these after the fact proposals I always encourage the client and their legal team to show a reason for mercy and make a proposal that is relevant and meaningful. Translation: SHOW THE COURT YOU GET THE DRIFT AND ARE SORRY. But, many people do not want to admit anything either because they will mount an appeal or because they do not feel they have done anything wrong. The bottom line is that you do not have to admit the crime but should admit that you have made poor choices and hence have earned a ticket to prison, and more importantly are willing to change your ways.
Changing your ways is key. Many of my clients think that because they have committed “white collar” crimes, they will be treated better in prison. WRONG!!!
How should Raj and his family prepare for prison?
The Rajaratnam family has a long road ahead. Not just Raj, but his entire family. His wife and three kids and all of his “friends.” I believe that an entire family actually needs to prepare for prison as it often more difficult on the family left behind than it is for the person inside. Raj and his family need to sit down and make a plan that includes how and when they will visit him and how they can get on with their lives and be productive while he is away. But, they must get into the proper mindset to do this well. Once again, prison staff or other inmates do not treat “white collar” inmates better. I call prison the ultimate equalizer and this is why. Once inside there are different rules and codes of conduct. In fact, the staff will often look at “white collar” inmates harsher at first because they know that many have not been properly coached and still have an entitled attitude. Hint- Grandiosity and entitlement are what lands people in prison and does not help once you are there. Raj also will need to find a way to make his time productive and busy while letting his family know he is doing fine. NO pity parties and NO complaining. These are a few of the tips I would give to the Rajaratnams. I would also encourage them to learn all about the rules, regulations, food, jobs and more.
These are just a few ideas on how to prepare for prison. Last word is respect. Respect is key and that goes for respecting the other inmates, the staff and everybody’s personal space. Believe it or not, prison is the easy part of this journey through our criminal justice process. So, Raj- Get real so you can get over it and get home! Otherwise, you will need an Incarcervention, something you should have had long ago!!!