Danielle Chiesi, accompanied by her attorney Alan Kaufman during her famous trial for insider trading, leaves the U.S. federal court in Manhattan. (Click Image To Enlarge)
Raj Rajaratnam, Galleon Group fund manager and co-founder, is arrested by U.S. marshals at his office in Manhattan in October 2009 for alledged violations of fraud and insider trading laws (Click Image To Enlarge)
Chiesi, who did a 15-month stint at a West Virginia prison camp for passing illegal stock tips to hedge-fund manager Raj Rajaratnam, returned in January to New York City and has been living at a federal halfway house in the north Bronx.
She said of her new found freedom from federal prison on being found guilty f fraud and insider trading laws.
“It’s good to be back. I feel good. I feel great.”
Chiesi, giving her first post-prison interview, is one of more than 70 stock traders, analysts, lawyers and executives who have been convicted of insider trading since August 2009. The former teenage beauty queen, who once showed up at technology conferences wearing form-fitting clothes and low-cut tops, is among the most flamboyant defendants to be ensnared in the sweeping federal crackdown.
The probe initially centered on Rajaratnam, the Galleon Group LLC co-founder who was convicted in 2011 of conspiracy after an eight-week trial. The Sri Lankan-born money manager, who allegedly earned at least $45 million on tips from corporate insiders, is serving an 11-year prison sentence.
Courtroom drawing shows Raj Rajaratnam, right; assist US attorney Andrew Michaelson, left, and Judge Richard Howell, top right, listening to Anil Kumar witness testimony during Rajaratnam's trial. Photograph: Shirley Shepard/AFP/Getty Images (Click Image To Enlarge)
At Rajaratnam’s trial, prosecutors played wiretapped recordings of his conversations with Chiesi, who worked as an analyst at New Castle Funds LLC in New York. In one, they speculated why another trader bought 1 million shares of Advanced Micro Devices Inc. (AMD) before the public disclosure of a transaction between Sunnyvale, California-based AMD and Abu Dhabi’s Mubadala Development Co. Prosecutors said they had a tip.
Chiesi said on the recording.
“That’s a very bold move to make. Do you think somebody knows what we know?”
Robert Moffat, a former senior executive of IBM whose phone conversations were recorded by the FBI in the Galleon hedge fund insider trading probe, pleaded guilty to securities fraud and conspiracy charges in March 2010 (Click Image To Enlarge)
Chiesi pleaded guilty to conspiracy before the trial and went to prison in October 2011. In her guilty plea, she admitted that she solicited inside tips from technology industry executives. Among them was Robert Moffat, a former International Business Machines Corp. executive with whom she had an intimate relationship, he said in his guilty plea. Moffat got a six-month sentence.
Chiesi said in the May 16 interview.
“I was complicit.”
Chiesi did her time in Alderson, West Virginia, at a minimum-security camp in the foothills of the Allegheny Mountains. Martha Stewart was once jailed there for lying to authorities about her sale of stocks.
Aerial View of Alderson Federal Prison Camp in Wesst Virgnia, the same facility where Danielle Chiesi did her time and Martha Stewart served time for lying about insider trading. (Click Image To Enlarge)
Chiesi’s home was an 8-foot by 10-foot cubicle. Her cellmate was doing time for a drug offense, as were many at the prison. She spoke to family on brief phone calls and tutored other inmates in math. She went running and tried to exercise in a sparse gym that lacked weights.
Chiesi said she earned respect from fellow inmates because she hadn’t cooperated with prosecutors.
“Not being a rat works. I didn’t talk, I didn’t speak, I kept to myself."
Chiesi said of a term she described as “very difficult.” Her cellmate was “an inspiration” who “really helped me get through.”
Chiesi left Alderson in early January after shaving time off her sentence for good behavior and participation in a drug and alcohol program. She headed for the community-based “re-entry” program in the Bronx, where she’ll spend six months before returning to an apartment in Manhattan.
“When my family picked me up, you cannot even believe the feeling. I had my mom, my brother, my sister, my nieces. They drove outside of the Alderson gates, and I jumped out of the car. It was surreal.”
She told her family.
“All I could say was, ‘I did it,’”
Now Chiesi is living on a tree-lined Bronx street that’s a far cry from the tony midtown Manhattan neighborhood that was once home. She has a room in a five-story facility housing men and women which is staffed by security officers guarding the entrance. Nearby are shuttered storefronts and a jeans shop selling $6 tank tops.
Chiesi, who is working for her brother in a job she declined to identify, comes and goes without an escort.
“Life is hard. I didn’t come back to something that’s perfect.”
At her sentencing, Chiesi’s lawyers argued that her former boss, Mark Kurland, co-founder of New Castle Funds, had used their “toxic” sexual relationship to manipulate her into feeding him tips. In the May 16 interview, Chiesi asked about Kurland, who was sentenced to 27 months in the case.
Mark Kurland was Danielle Chiesi's boss at hedge fund firm Galleon Group. On May 2, 2009, he departs federal court in New York after being sentenced to 27 months in prison for fraud and insider trading. (Click Image To Enlarge)
“I want to know what Mark Kurland is doing now.”
Chiesi’s lawyer, Don Buchwald, said in an interview on May 16 that Chiesi must serve an additional two years on supervised release, a form of probation, after she leaves the halfway house.
Chiesi says she’s resilient and is eager to move on with her life.
“I don’t have a career anymore, but I have drive and ambition, and I will make it work. I’m back.”
The case is U.S. v. Rajaratnam, 09-cr-1184, U.S. District Court, Southern District of New York (Manhattan).
COMMENTARY: In a blog post dated May 15, 2011, I blogged about the trial of Danielle Chiesi for fraud and insider trading and how she cunningly manipulated numerous individuals into providing her information that she fed Galleon Group co-founder Raj Rajaratnam to help him make millions on securities trades.
Let's look at the key players in the insider trading trial of Galleon Group co-founder Raj Rajaratnam, and how much money he made from the securities trades.
Click Image To Enlarge
He stood trial in U.S. v Rajaratnam (09 Cr. 01184) in the United States District Court for the Southern District of New York, and on May 11, 2011 was found guilty on all 14 counts of conspiracy and securities fraud. On October 13, 2011, Rajaratnam was sentenced to 11 years in prison and fined a criminal and civil penalty of over $150 million combined.
Rajaratnam is a very sick prisoner, suffering from Type II diabetes. Because of his medical condition, as of January 14, 2013 Rajaratnam is incarcerated at Federal Medical Center, Devens in Ayer, Massachusetts, an administrative facility housing male offenders requiring specialized or long-term medical or mental health care. Rajaratnam's release date is July 4, 2021.
The Danielle Chiesi case is absolutely incredible. It's difficult to believe that this bitch went to such lengths like sleeping with her victims to extract insider trader information to make a few bucks. The only other case I can compare it to is fictitious, from the blockbuster film "Wall Street" starring Charlie Sheen and Michael Douglas. In this film, Bud Fox, the a young stockbroker played by Sheen in the film, is hired by Gordon Gekko, a character very similar to Raj Rajaratnam, to get "information," by any means necessary. My only hope is that Hollywood makes a film from Ms Chiesi's exploits. I am looking forward to it, and will cover this bitch's exploits after she is finally given her freedom from justice.
Here's a short video clip of Danielle Chiesi and her attorney Alan Kaufman following her sentencing. Get a load of this bitch.
Courtesy of an article dated May 17, 2014 appearing in Bloomberg