Ex-correctional official sent to US prison for payments from Galleon's Rajaratnam

[May 09, 2024]  By Nate Raymond

BOSTON (Reuters) -A former correctional counselor at a federal prison in Massachusetts was sentenced on Wednesday to two years in prison for corruptly accepting tens of thousands of dollars from a wealthy inmate identified by a source as Galleon Group hedge fund founder Raj Rajaratnam.

U.S. District Judge William Young in Boston rejected a request by William Tidwell, 50, for a more lenient sentence, calling the corruption he engaged in while at the Federal Medical Center Devens in Ayer, Massachusetts "intolerable."

Prosecutors said that corruption involved accepting over $90,000 in payments through an arrangement with an "ultra-high net worth" inmate under Tidwell's care in exchange for giving him favorable treatment.

"The conduct for which you stand convicted cuts to the very heart of our justice system," Young said. "It's corruption of the most dangerous sort."

Young ordered the New Hampshire resident to forfeit $95,058 and pay a $10,000 fine.

Tidwell's lawyer, R. Bradford Bailey, had argued for just six months in prison, saying Tidwell's 23 years with the Federal Bureau of Prisons was "not without distinction and accolade" before he broke the law during a period of financial strain.

No one in court identified the inmate by name. But a person familiar with the matter previously confirmed he was Rajaratnam, who was convicted and sentenced in 2011 to 11 years in prison for insider trading and was released early in 2019.

Prosecutors have said Rajaratnam, the founder of the New York-based Galleon Group, made as much as $63.8 million in illicit profit from 2003 to 2009 trading on stocks including eBay, Goldman Sachs and Google.

Galleon hedge fund founder Raj Rajaratnam departs Manhattan Federal Court in New York October 13, 2011.. REUTERS/Lucas Jackson/File Photo

No charges have been filed against Rajaratnam related to Tidwell's case. Rajaratnam's lawyer, Samidh Guha, has said he would "cooperate appropriately with the government if and when they reach out to us." Guha declined to comment on Wednesday.

Tidwell pleaded guilty in September to charges that he received payments in violation of his official duties, made false statements to a bank and committed identity theft.

Prosecutors said Tidwell, beginning in 2018, received a stream of financial benefits from the inmate and one of his close friends.

Those benefits included $25,000 to help pay off loans for a family member and more than $65,000 in fees and other benefits to help manage certain properties, including one in which Tidwell lived, according to charging documents.

After the inmate's release from prison, Tidwell in 2020 received a $50,000 loan from the ex-inmate's friend to buy a house. Prosecutors said he lied on a bank loan application about the source of that money.

(Reporting by Nate Raymond in BostonEditing by Bill Berkrot)

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