Rajiv Goel, a former Intel Corp. executive who leaked inside information to Galleon Group founder Raj Rajaratnam, avoided a prison term Sept. 24, when U.S. District Court Judge Barbara Jones sentenced him to two years probation, a fine of $10,000 and forfeiture of $266,649 in ill-gotten gains.
Goel, 54, was a key cooperating witness in the case against Rajaratnam, who is currently serving an 11-year prison term at a federal prison in Massachusetts on fraud and insider trading charges.
Jones said the former Intel executive was “essential” to the Galleon Group probe and pointed out he had the “good sense” to cooperate once he was caught in the government’s net.
“You have already been punished in the sense of the shame you feel for your family and your having lost your career,” the judge added.
Goel, who could have faced a sentence of up to 25 years in prison, told the court he had “a serious lapse of judgment and good sense.”
The Indian American executive apologized to his wife and children who, he said, “have been devastated by the trauma and the grief.” He added in a soft voice, “I hope that I am given another chance to repair the harm that I have caused and am deeply ashamed for the mistakes that I have made.”
Even before the government agreed to make Goel an official government cooperating witness, he admitted his illegal activities and began working with prosecutors, according to a court filing.
A resident of Los Altos, Calif., Goel was director of strategic investments at Intel’s investment arm, Intel Capital, until he left in 2009.
He admitted supplying secret details about Intel’s earnings and investments to Rajaratnam. The two men had met while they were studying at the University of Pennsylvania’s Wharton School of Business and became friends.
Rajaratnam also loaned Goel about $600,000 and made about $750,000 trading — often illegally — in Goel’s brokerage account.
At the Sept. 24 sentencing, David Zornow, a lawyer for Goel, called Rajaratnam a “master manipulator” and “clever seducer” who played his client “like a fiddle.”
Assistant U.S. Attorney Reed Brodsky said Goel did everything he could after his arrest to make up for his crimes, including continuing to cooperate even after Rajaratnam’s trial. He called Goel’s testimony “very powerful.”
Regarding her sentence, Jones pointed out that two other people who cooperated in the main investigation also received probation — Anil Kumar, a former McKinsey & Company executive; and Adam Smith, a Harvard-educated former Galleon Group trader.
The Galleon Group investigation has resulted in the convictions of more than two dozen people and led to spin-off probes.
The office of U.S. Attorney in Manhattan Preet Bharara has since 2009 charged at least 70 people with insider trading crimes. Of those, 64 have either pleaded guilty or have been convicted at trial.