United States District Court, S.D. New York
MEMORANDUM OPINION AND ORDER
LORETTA A. PRESKA Senior United States District Judge.
the Court is a motion to correct, vacate, and/or set aside
the sentence pursuant to Title 28, United States Code,
Section 2255, (Mot. Vacate, June 16, 2015, dkt. no. 354), and
a motion for a writ of error coram nobis to vacate, reassess,
and amend the order of forfeiture, (Mot. Writ of Error, June
16, 2015, dkt. no. 351), filed by Petitioner Raj Rajaratnam
("Petitioner" or "Rajaratnam"). The
Government filed an omnibus memorandum in opposition to both
of Petitioner's motions. (Opp., Oct. 5, 2015, dkt. no.
360). Petitioner replied, filing both a reply memorandum
pursuant to 28 U.S.C. § 2255, (Reply Mot. Vacate, Nov.
6, 2015, dkt. no. 365), and a reply memorandum for a writ of
error coram nobis. (Reply Mot. Writ of Error, Nov. 6, 2015,
dkt. no. 364). Subsequent correspondence was filed to address
Salman v. United States, 137 S.Ct. 420 (2016), a
recent Supreme Court decision that is relevant to
Petitioner's arguments in his § 2255 petition.
(See dkt. nos. 368-372}.
reasons that follow, Petitioner's motions are denied.
March 8, 2011, the Petitioner's trial commenced before
Judge Richard Holwell. Petitioner was charged in a
Superseding Indictment in fourteen counts. (Superseding
Indictment, Jan. 20, 2011, dkt. no. 165). Counts One to Five
charged Petitioner with conspiracies to commit securities
fraud, with each conspiracy defined by the individual who
allegedly passed the information to Petitioner. (Id.
at ¶¶ 1-35). Counts Six through Fourteen charged
Petitioner with substantive securities fraud in connection
with some of the individual trades that were also the
subjects of the conspiracy counts. (Id. at
¶¶ 36-41). The counts included: (1) leading a
multi-year conspiracy with former and current employees of
Galleon, including Adam Smith, to trade based on illegal tips
from multiple insiders at public companies, (Count
One)(id. at ¶¶ 1-7); (2) leading a
multi-year conspiracy with Roomy Khan, a former Galleon
employee, and exchanging illegal tips with Khan related to
multiple stocks, including Polycom Inc.
("Polycom"), Hilton Hotel Corp.
("Hilton"), and Google Inc. ("Google"),
(Count Two)(id. at ¶¶ 8-14); (3) leading a
multi-year conspiracy with Rajiv Goel, an Intel Corp.
("Intel") executive, and trading based on illegal
tips from Goel about Intel and Clearwire Corp.
("Clearwire"), (Counts Three, Six, Seven, &
Fourteen)(id. at ¶¶ 15-21, 36-37, 40-41);
(4) leading a multi-year conspiracy with Anil Kumar, a senior
partner at McKinsey & Company, Inc.
("McKinsey"), and trading based on illegal tips
from Kumar about Advanced Micro Devices, Inc.
("AMD"), ATI Technologies Inc. ("ATI"},
and eBay Inc. ("eBay"), (Counts Four &
Thirteen)(id. at ¶¶ 22-28, 38-39); (5)
conspiring with Danielle Chiesi, a portfolio manager at
another hedge fund, and exchanging illegal tips with Chiesi
relating to AMD, Akamai Technologies, Inc.
("Akamai"), and other companies, (Counts Five,
Eight, Nine & Ten)(id. at ¶¶ 29-37);
and trading based on material, non-public information he
obtained from a source at PeopleSupport, (Counts Eleven and
Twelve). (Id. at ¶¶ 36-37).
trial, the Government offered physical and testimonial
evidence as to Petitioner's guilt, including: (1) wiretap
recordings of Petitioner's phone conversation with Kumar,
Goel, Smith, Chiesi, and others demonstrating that Petitioner
schemed repeatedly to obtain and to trade based on inside
information, (Opp. at 4); (2) testimony from Kumar regarding
his agreement to provide Petitioner with multiple illegal
tips, including tips related to AMD's acquisition of ATI
in 2006, and Petitioner's elaborate schemes to conceal
the bribes he paid to Kumar for those tips, (id.);
(3) testimony from Goel regarding his agreement to provide
Petitioner with multiple illegal tips relating to Intel's
April 2007 earnings and Intel's 2008 investment in
Clearwire, (id.); (4) testimony from Smith regarding
his agreement to share inside information with individuals at
Galleon including Petitioner and Petitioner's directives
to conceal their crimes, (id.); (5) testimony from
various executives at public companies and other firms
relating to the confidentiality of the information Petitioner
obtained from many sources, (id.); and (6) summary
charts reflecting Petitioner's phone calls with sources
of inside information and the extensive trading by Petitioner
and others based on that information. (Id.).
11, 2011, the jury found Petitioner guilty on all fourteen
counts. (Rajaratnam Trial Tr., May 11, 2011, at 5712-13). On
October 13, 2011, Judge Holwell sentenced Petitioner to a
term of 132 months imprisonment, to be followed by two years
of supervised release. (Judgment, Oct. 25, 2011, dkt. no.
328). Judge Holwell also ordered Petitioner to pay a fine of
$10 million, a $1, 400 special assessment, and forfeiture in
the amount of $53, 816, 434. (Id.)
appeal, Petitioner advanced two arguments: first, Petitioner
argued that the wiretaps capturing his illegal schemes should
have been suppressed because the Government included material
falsehoods or omissions in the relevant applications. (Appeal
Br. at 33, 11-4416, dkt. no. 75). Second, Petitioner
challenged Judge Holwell's instruction to the jury that
it could convict Rajaratnam if the inside information was
"a factor, however small, " in his trading
decisions. (Id. at 56). Petitioner concedes that
appellate counsel "did not challenge the trial
court's instruction on 'knowledge' and
'benefit' or the sufficiency of the evidence of
'knowledge' or 'benefit.'" (Mot. Vacate
at 12). The Court of Appeals affirmed Rajaratnam's
convictions by opinion dated June 24, 2013. United States
v. Rajaratnam, 719 F.3d 139 (2d Cir. 2013).
§ 2255 Habeas Petition
well settled that a § 2255 petition is not a substitute
for a direct appeal. United States v. Frady, 456
U.S. 152, 165 (1982); United States v. Vilar, 645
F.3d 543, 548 (2d Cir. 2011). A federal prisoner cannot use a
§ 2255 petition to litigate questions that could have
been raised on direct appeal but were not. Sapia v.
United States, 433 F.3d 212, 217 (2d Cir. 2005).
Society's interest in repose of criminal judgments
animates these procedural rules and compels their vigorous
enforcement. See, e.g., Harrington v.
Richter, 562 U.S. 86, 103 (2011)(discussing repose in
the context of petitions for habeas corpus from state
prisoners). Thus, where a petitioner has procedurally
defaulted a claim by failing to raise it at a trial,
sentencing, or on direct appeal, the claim may be raised
through § 2255 only if petitioner "can first
demonstrate either cause and actual prejudice, or that he is
actually innocent." Bousley v. United States,
523 U.S. 614, 622 (1998)(internal quotations and citations
Supreme Court has instructed that "cause" should be
construed narrowly. See Coleman v. Thompson, 501
U.S. 722, 752 (1991)(noting that "cause" arises
only when it is "something external to the
petitioner" which "cannot be fairly attributed to
him"). Where a petitioner argues that the
"cause" for the procedural default was a result of
ineffective assistance of counsel, the petitioner must
demonstrate that (1) counsel's representation fell below
an objective standard of reasonableness and (2) there is a
reasonable probability that, but for counsel's
unprofessional errors, the result of the proceedings would
have been different. Strickland v. Washington, 466
U.S. 668, 688, 694 (1984); United States v.
Whitman, 115 F.Supp.3d 439, 445 (S.D.N.Y. 2015).
Ineffective assistance of counsel claims include both the
"cause" and "prejudice" prongs because
the Strickland standard also requires a showing of
courts must "indulge a strong presumption that
counsel's conduct falls within the wide range of
reasonable professional assistance."
Strickland, 466 U.S. at 689. In reviewing
allegations of deficient performance by appellate counsel,
reviewing courts are instructed not to "second-guess
reasonable professional judgments and impose on . . . counsel
a duty to raise every colorable claim" on appeal.
Jones v. Barnes, 463 U.S. 745, 754 (1983)(internal
quotation omitted). When analyzing the objective
reasonableness of counsel's performance, such performance
"must be assessed in light of the information known at
the time of the decisions, not in hindsight."
Strickland, 466 U.S. at 680. Additionally, in
attempting to demonstrate constitutional ineffectiveness by
appellate counsel, "it is not sufficient for the habeas
petitioner to show merely that counsel omitted a nonfrivolous
argument, for counsel does not have a duty to advance every
nonfrivolous argument that could be made." Mayo v.
Henderson, 13 F.3d 528, 533 (2d Cir. 1994}. Instead, a
habeas petitioner must establish that appellate counsel
"omitted significant and obvious issues while pursuing
issues that were clearly and significantly weaker."
Id. "Strategic choices" made by appellate
counsel "after thorough investigation of law and facts
relevant to plausible options" are "virtually
unchallengeable." Strickland, 466 U.S. at
event a petitioner cannot demonstrate "cause" for
his procedural default, he or she can obtain review for his
or her claim by showing "that a fundamental miscarriage
of justice would result from a failure to entertain the
claim." McCleskey v. Zant, 499 U.S. 467, 494-95
(1991). The Supreme Court has repeatedly emphasized that a
"fundamental miscarriage of justice" results only
when petitioner can establish "actual innocence."
See Herrera v. Collins, 506 U.S. 390, 404
(1993)(referring to rule requiring "proper showing of
actual innocence" as the "fundamental miscarriage
of justice exception" and explaining the purpose of the
exception is "to see that federal constitutional errors
do not result in the incarceration of innocent
"'actual innocence' means factual innocence, not
mere legal insufficiency." Bousley, 523 U.S. at
623. Accordingly, this narrow test is satisfied only when
petitioner can demonstrate that his acts "have been
ruled not to constitute criminal conduct." Underwood
v. United States, 166 F.3d 84, 88 (2d Cir. 1999).