Danielle Chiesi, accused with Raj Rajaratnam in the largest insider-trading case involving hedge funds, testified that U.S. agents questioned her before advising her of her right to remain silent and to seek a lawyer’s advice.
Chiesi, testifying for the first time in a hearing today, told U.S. District Judge Richard Holwell in New York that a group of five federal agents who woke her up and arrested her in her apartment Oct. 16, 2009, asked her questions and tried to get her to cooperate with their investigation before giving her a so-called Miranda warning.
“Absolutely not,” Chiesi said, in reply to a question from her attorney asking whether she had any doubt about her claim that she wasn’t told her rights until after she was arrested.
Chiesi, a former New Castle Funds LLC consultant, and Rajaratnam, Galleon Group LLC’s co-founder, are charged with profiting from tips from company executives, hedge-fund employees and other insiders. Today’s hearing comes in response to court papers filed by Chiesi asking Holwell to bar the government from using any statements she made that morning to Federal Bureau of Investigation agents.
Chiesi claims the agents woke her around 6 a.m., pounding on her door, told her they had a warrant for her arrest and questioned her in her apartment for about 90 minutes without advising her of her rights. The failure requires Holwell to bar the government from using the statements against her, according to her lawyers.
Chiesi said the agents said she had a brief opportunity to help herself by cooperating with them and tried to get her to make a monitored phone call to someone on the West coast.
Prosecutors claim one of the agents told Chiesi of her rights while in her apartment and again later, after she was arrested. Chiesi claims the agents advised her of her rights only on the latter occasion.
On cross-examination, prosecutor Reed Brodsky tried to question Chiesi about the specifics of the information she gave agents during their questioning. Holwell, who didn’t permit the questioning, said prosecutors may file papers to try to persuade him to reopen the hearing next month.
During her testimony, Chiesi frequently shifted in her seat and fidgeted, sometimes answering questions before they were finished. She agreed with her attorney that she was nervous, testifying for the first time in her life.
Chiesi told Holwell the FBI agents, who she referred to by their first names, were “very nice” to her. She said her cat even warmed up to an agent named “Claire.”
“She’s usually very mean to people and now I’m getting arrested and she’s in a good mood,” Chiesi said of the cat.
The case is U.S. v. Rajaratnam, 1:09-cr-01184, U.S. District Court, Southern District of New York (Manhattan).