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WASHINGTON - A US-based hedge-fund billionaire charged as part of an insider-trading case was investigated by US authorities for allegedly raising funds for a Sri Lankan separatist group, The Wall Street Journal reported late Saturday.
Citing people familiar with the probe, the newspaper said federal agents had uncovered documents showing that Raj Rajaratnam, founder of the Galleon Group, was among several wealthy Sri Lankans in the United States whose donations to a Maryland-based charity made their way to the Liberation Tigers of Tamil Eelam.
The LTTE, commonly known as the Tamil Tigers, fought a brutal separatist war against the government of Sri Lanka from 1976 until it was defeated last May.
Rajaratnam, 52, was among six people arrested Friday in what the Federal Bureau of Investigation said is the largest-ever, hedge-fund insider-trading case, the paper noted.
Federal prosecutors in New York charged Rajaratnam with securities fraud and conspiracy to commit securities fraud.
Prosecutors allege Rajaratnam and his ring of alleged co-conspirators earned 20 million US dollars in improper gains, the report said.
Rajaratnam's New York-based Galleon fund firm manages 3.7 billion US dollars in investments.
Jim Walden, an attorney for Rajaratnam, said his client is innocent and will fight the charges, according to the paper.
Walden said Rajaratnam made charitable donations "to rebuild homes destroyed by the Tsunami" that devastated Sri Lanka and other countries in 2004, and that he wasn't involved with the LTTE, the Journal said.
As part of a separate terrorism probe, which was led by the FBI in Brooklyn, New York, eight other people have pleaded guilty to attempting to provide material support to the LTTE, designated as a terrorist organization by the United States, The Journal noted.
Prosecutors in the cases do not allege that Rajaratnam and other donors knew their contributions were routed to the Tamil Tigers, according to the report.
But documents in a federal criminal complaint filed in US District Court in New York's Eastern District include allegations by federal agents that money donated to a US charity called Tamil Rehabilitation Organization, or TRO USA, of Cumberland, Maryland, was funnelled to the Tamil Tigers insurgency, the paper noted.
The case was brought against Karunakaran Kandasamy, described by prosecutors as the head of the US branch of the LTTE, The Journal said. In the same case, an FBI agent cites documents uncovered in court-authorized searches as showing donations to TRO USA made by a person identified only as "individual B."
Rajaratnam is the person identified as "individual B," said the paper, citing "people familiar with the probe."
- AFP/ir
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