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Rajat Gupta and Rajaratnam, one-time allies on Wall Street, now in prison

RAJAT

NEW YORK: India-born former Goldman Sachs director Rajat Gupta has accepted his two-year imprisonment on insider trading charges as his “destiny” and spending a low- profile life at a Massachusetts prison where he occasionally runs into his friend and hedge fund founder Raj Rajaratnam.

Gupta, currently serving two years at the Federal Medical Center Devens in northwest of Boston on insider trading charges, washed tables at the facility, played handball and racquetball and bridge, according to an account in the New York Times.

Gupta and Rajaratnam are under the same roof at the prison with 1,000 other inmates.

Gupta occasionally runs into his one time friend-turned foe Rajaratnam, also serving an 11-year prison term on insider trading charges in the same facility, the report said.

The report quoted a former inmate David E Morgan, who served about a year and half on charges related to insurance fraud, as saying that he had met Gupta and Rajaratnam at Devens.

“The two lead parallel lives that sometimes intersect. They occasionally run into each other in the common areas at Devens and exchange pleasantries. Although both men are in prison for the same crime, their friendship is irrevocably broken,” the report said.

Initially, Gupta was rumoured to be a “snitch”, Morgan said but he quickly won over inmates.

“People would ask him about trading stocks,” Morgan said in the report, and Gupta would reply: “I don’t know anything about stocks.”

Often, before their release, inmates would seek Gupta’s advice on business plans and one even asked him to invest.

According to Morgan, Gupta replies: “I am out of business.”

Gupta, who arrived in June 2014 to begin his prison term, was assigned to Devens minimum security camp, which houses 135 inmates.

But in April, he was sent for six weeks to the Special Housing Unit, or SHU as punishment, the report said.

“His infraction was having an unauthorised item: an extra pillow,” it added.

The report said inmates often grabbed pillows of departing prisoners and Gupta had hoped an extra pillow would help with a bad back.

It was the second time that Gupta was sent to ‘the hole’, as the SHU is sometimes called.

Last summer, Gupta was dispatched to the unit for sitting during the inmate count.

“He was actually tying his shoe,” Morgan was quoted a saying in the NYT report.

Gupta seemed to have accepted his imprisonment, telling Morgan it was his “destiny”.

Before Gupta’s transfer to the main compound of the the centre, he had reported daily at 5:30 am to the cafeteria, where he washed tables.

His schedule included dinner at 4 pm, after which Gupta and Morgan walked and talked.

“Those conversations were priceless,” Morgan said.

While in the summers, the two men split a pint of ice cream from the commissary, in the winter, Gupta started writing a book, Morgan said.

When Morgan arrived at the compound in October 2013, Rajaratnam, a longtime diabetic who needs dialysis, was housed in the prison’s hospital in a “comfortable electrically operated bed”.

After a stint in the camp, when Morgan returned to the main prison compound late last year, he noticed that Rajaratnam “was in the same unit as I was” – a unit made up of two-man cells with a toilet, a sink, two lockers, one desk and narrow bunk beds.

The report quotes Morgan as saying that Rajaratnam had him asked about Gupta, saying: “I consider him my friend.”

Morgan responded, “He doesn’t consider you his friend” to which Rajaratnam said, “Listen, you need to know I had an opportunity to give up Gupta and I didn’t.”

Rajaratnam’s lawyer Samidh Guha said in the NYT report that his client recalled meeting with Morgan for a few minutes.

Rajaratnam had simply told Morgan that Gupta is a “good man and is innocent”, Guha said.

The report said Gupta has earned inmates’ respect, but prison conditions “can seem harsh to those accustomed to civilian life.”

Giving an insight into Gupta’s life at prison, the report said at a disciplinary hearing in May, Gupta’s privileges such as visiting rights were revoked.

When Gupta’s elder sister traveled from India to see him, he offered to serve more time if she could visit but his requests were denied, people briefed on the situation said in the NYT report.

Gupta’s sister returned to India without seeing her brother.

In prison, Gupta’s family has kept him going, the report said adding that he has pasted family photos on the bottom panel of the bunk above him.

“Hey, David, look at what we have to be grateful for,” Morgan recalled Gupta saying.

Gupta’s twin granddaughters used to visit on Fridays until recently, the report said.

“He lights up from ear to ear when the babies come,” Morgan said in the report adding that Gupta is sad they will no longer visit since visitors to the compound have to pass through clanging doors with steel bars and the Guptas felt the setting would frighten the grandchildren.

PTI