Federal prosecutors want Rajat K Gupta, once one of the world's most prominent businessmen, to spend as much as 10 years in prison for insider trading. Gupta's defence lawyers would rather he spend time in Rwanda.
It is just the latest intriguing twist in the case of Gupta, who was convicted of leaking boardroom secrets about Goldman Sachs to the hedge fund manager Raj Rajaratnam.
On Wednesday, prosecutors and defence lawyers filed sentencing memos to Judge Jed S Rakoff, who is scheduled to sentence Gupta on October 24 in Federal District Court in Manhattan. Gupta is the former head of the consulting firm McKinsey & Company and the most influential of the 69 individuals convicted in the government's sweeping insider-trading crackdown.
Gupta's lawyers have pleaded for a lenient sentence of probation, accompanied by an order that he perform community service. Gary P Naftalis, a lawyer for Gupta, made an unusual request in recommending that Gupta, who has played a leadership role in a variety of global humanitarian causes, be sent to Rwanda.
"The Rwandan government has expressed support for a programme of service in which Gupta would work with rural districts to ensure that the needs to end HIV, malaria, extreme poverty and food security are implemented," Naftalis wrote.
Gupta is hoping that Judge Rakoff is swayed by the more than 400 letters of support submitted on his behalf, including one from Bill Gates, the Microsoft billionaire and philanthropist, and Kofi Annan, the former United Nations secretary-general.
The letters depict a man who, but for his insider-trading conviction, has led an exemplary life.
Miles D White, the chief executive of the pharmaceutical giant Abbott, wrote, "Rajat's contributions to global welfare — in business, in philanthropy, in education, in civil society - have been rivaled by very few people." Gupta's leadership on global health issues has "made a real difference in the lives of literally millions of people around the world," Gates wrote.
The government, however, is asking that Gupta be sentenced to between 8 years and one month to 10 years and one month, a range based on a formula in the federal sentencing guidelines. "Gupta's crimes are shocking," wrote Richard Tarlowe, a federal prosecutor. "Gupta had achieved extraordinary personal success and was at the pinnacle of a profession built on protection client confidences."
Gupta's misconduct is "particularly troubling at a time when there is widespread concern about corruption, greed and recklessness at the highest levels of the financial services industry," Tarlowe wrote.
In June, a jury found Gupta, 63, a former director of Goldman, guilty of divulging confidential discussions about the bank to Rajaratnam, including Warren E Buffett's planned $5 billion investment in Goldman in the depths of the financial crisis.
Gupta, who also served on Procter & Gamble's board, was acquitted on a count related to giving Rajaratnam advance word of the financial results of the consumer products giant.
Gupta, a resident of Westport, Conn., plans to appeal his conviction.
Rajaratnam, the former head of the Galleon Group hedge fund, is serving an 11-year prison term for orchestrating a seven-year insider-trading conspiracy.
He had a vast network of informants, including traders, lawyers and bankers, but none was more prominent than Gupta.
A native of Kolkata, India, Gupta came to the United States to earn his graduate degree at Harvard Business School. He spent his career at McKinsey, the consulting firm, and was elected its global head in 1994. After running McKinsey for a decade, he was highly sought after as a board member, landing plum directorships at several public companies. He also devoted much time to philanthropic pursuits, becoming a trustee at the Rockefeller Foundation and an adviser to President Bill Clinton's philanthropy.
But after leaving McKinsey, Gupta also took on a variety of roles on Wall Street, including raising money for Rajaratnam at Galleon, then one of the world's most highly regarded hedge funds.
Gupta's lawyers argue that a lengthy prison term is unnecessary because Gupta has already paid a terrible price. They said that his reputation is in tatters given the intense media attention surrounding his trial. "This is the quintessential case of a monumental fall that is, in and of itself, severe punishment," said the defense.
In letters sent to Judge Rakoff, Gupta's wife and four daughters, who attended Gupta's monthlong trial nearly every day, described the strain of the case on their lives.
One of his daughters, Aditi Gupta, a recent graduate of Harvard Business School, described being harassed on campus because of her father's legal troubles. She said that news articles about her father's case "magically appeared" in her on-campus mailbox. An email circulated calling for Harvard Business School to cut all ties with Gupta, who served on the school's advisory board. She said that she could not bear to tell her father about these incidents.
"Nor did I tell him about the well-intentioned professors who suggested I take a year off to wait for everything to 'die down,' or what it was like to try and maintain my composure in a class of 90 people when Preet Bharara" — the United States attorney in Manhattan whose office brought the case against Gupta — "arrived to speak in one of my first year classes," she wrote.
Gupta's sentencing will be closely watched in legal circles. The roughly eight- to-10-year term requested by prosecutors is based on guidelines that are nonbinding. The rules are supposed to give judges direction when meting out sentence.
Judge Rakoff has been one of the most outspoken critics of the guidelines. In 2006, he sentenced a former corporate executive to a three and a half-year prison term for accounting fraud when prosecutors, hewing to the guidelines, had sought 85 years.
There can be, wrote Rakoff, an "utter travesty of justice that sometimes results from the guidelines' fetish with abstract arithmetic, as well as the harm that guideline calculations can visit on human beings if not cabined by common sense."
Prosecutors gave some credence to Gupta's accomplishments, but emphasised his "callousness and above-the-law arrogance" in repeatedly leaking secret corporate information to Rajaratnam over a two-year span. "Although Gupta's criminal conduct appears to represent a deviation from an otherwise law-abiding life," said prosecutors, "Gupta's crimes were not an isolated occurrence or a momentary lapse in judgment."
On Wednesday, the team of government lawyers and FBI agents that led the prosecution of Rajaratnam, Gupta and other insider-trading defendants were in Washington to receive a distinguished service award from Attorney General Eric H Holder.
© 2012 The New York Times News Service