Former Galleon Group LLC trader Michael Kimelman said he wants jurors at his upcoming insider-trading trial to be told that he could have avoided jail by admitting guilt and rejected a plea deal because he’s innocent.
Kimelman is scheduled for trial on May 16 with fellow former traders Zvi Goffer and his brother, Emanuel Goffer, who are accused of being part of one of three rings that are the target of a nationwide U.S. probe of insider trading at hedge funds. All three have pleaded not guilty. Jurors in the case of Galleon Group co-founder Raj Rajaratnam ended their 11th day of deliberations without reaching a verdict yesterday.
A lawyer for Kimelman said in court papers filed May 9 in federal court in New York that his client wants jurors to know that he rejected the plea deal even though accepting it would have meant he wouldn’t have to serve any time in prison. The government’s offer would have had Kimelman plead guilty to conspiracy to commit securities fraud and “was still available last week,” according to the filing.
“Mr. Kimelman rejected this non-jail offer, electing instead to adhere to his position that he is innocent of any criminal conduct, despite the possibility that if convicted at trial, he could be sentenced to a period of imprisonment,” his lawyer, Michael Sommer, said in the filing. “Mr. Kimelman requests that the facts of the plea offered to him be admitted at trial.”
Kimelman has asked Sullivan for permission to show the jury an agreement between prosecutors and his lawyers describing the rejected deal, saying it was “evidence of his consciousness of innocence.”
Sommer said that while the government doesn’t dispute the offer was made, “it does oppose the jury hearing these facts.”
“It bears in mind that Mr. Kimelman did not just reject a plea agreement, he rejected a non-jail sentence,” his lawyer said. “A jury is entitled to believe that most people would jump at the chance to avoid jail.”
“Let us not deprive an innocent person, falsely accused, of the inference which common sense draws from a consciousness of innocence,” Sommer said.
Sullivan has yet to rule on Kimelman’s request. Ellen Davis, a spokeswoman for Manhattan U.S. Attorney Preet Bharara, whose office is prosecuting the case, declined to comment.
Prosecutors filed a superseding indictment in April in which Goffer, his brother and Kimelman are charged with conspiracy and securities fraud. Prosecutors said the Goffer ring of the Galleon-related cases traded on stock tips that came from lawyers at Ropes & Gray in New York and from Gautham Shankar, another former trader. Kimelman’s lawyers said he faces a statutory maximum of as long as 45 years in prison if convicted of all charges.
The U.S. has placed Zvi Goffer at the center of the scheme and claimed his accomplices called him “Octopussy,” a reference to the 1983 James Bond movie, because of his many sources of information. Goffer’s lawyers dispute the characterization.
The defendants were arrested in November 2009, the second round of defendants charged in a case stemming from the prosecution of Rajaratnam.
The case is U.S. v. Goffer, 10-cr-00056, U.S. District Court, Southern District of New York (Manhattan).