Almost three years after he was arrested at his home in California, Rajiv Goel was sentenced on September 24, 2012, to probation. He had exhausted his savings paying his legal bills and was forced to sell his house in Los Altos, California, to stay afloat. Fired from Intel after his arrest, Goel has had a hard time finding a new job. In the meantime, loans from his family in India have allowed two of his children to attend the universities of their choice.
Roomy Khan, the former Intel employee who had a hard time telling FBI agents the truth, spent 2012 rehabilitating herself and her tattered reputation. Since she started cooperating with the government in early 2008, much has happened to the fifty-four-year-old Khan. In 2009, she sold her house in Atherton at a loss and moved to Florida. Despite some ups and downs, she and her husband, Sakhawat, remain married. Away from the stressful life of wheeling and dealing and nonstop entertaining she once led, Khan has lost weight. Like Goel, she too is eager to work, but for now it’s only government prosecutors who need her help. And they don’t pay.
In August, she made her debut on the witness stand in the trial of US v. Doug Whitman. Khan turned in a superb performance for the government. Whitman, Khan’s former neighbor in Atherton, was convicted on two counts of conspiracy and two counts of securities fraud. But her star turn for the government was not sufficient to keep her out of jail. On January 31, 2013, Judge Rakoff sentenced her to one year in prison, saying, “This is too serious. You cannot have it both ways—to cooperate and then obstruct justice.”
On Tuesday, November 20, 2012, the US attorney’s office in Manhattan and the SEC brought criminal and civil charges against Mathew Martoma, a former portfolio manager for SAC Capital Advisors, the hedge fund run by the famous trader Steve Cohen. Among the South Asian community in the United States, there was a palpable sigh of relief. After three years of unremittingly bad press about some of the community’s shining lights, it appeared that prosecutors had moved on. Judging by his name, it looked like their newest target was someone in mainstream American society. Their euphoria turned out to be short-lived. By the end of the week, Bloomberg News reported that Martoma was born Ajai Mathew Mariamdani Thomas. He was the son of Indian immigrants and had changed his name in 2003.
The fall from grace of Raj Rajaratnam, Anil Kumar, and, most important, Rajat Gupta was not just a pivotal turning point in the lives of three individuals and their families. It was an important stepping-stone in the odyssey of the twice blessed. For four decades, the South Asian diaspora in the United States had enjoyed unrivaled success. Its members were considered the new “model minority,” a community that had come to the United States with very little and, within the span of two decades, had vaulted to the highest echelons of society.
When Rajat Gupta was indicted in October 2011, Gurchuran Das, the former chief executive officer of Procter & Gamble India and the author of India Unbound, one of the first books highlighting India’s resurgence, articulated a worry that many Indian corporate executives in the West harbor but dare not utter.
“He has stained the India story,” Das declared.
Over the years, Indians had developed a reputation in the West as being highly effective managers. Their leadership skills were fodder for new frontiers in academic research. One book written by four Wharton School professors and entitled The India Way purported to tell “how India’s top business leaders are revolutionizing management.” Now, with one of the country’s most beloved icons convicted of a crime, there was hand-wringing behind the scenes about how Indians would be perceived in the future. Would the rose-colored glasses come off?
David Ben-Gurion, considered the founder of the state of Israel, reportedly once said, “In order for Israel to be counted among the nations of the world, it has to have its own burglars and prostitutes.” It is an apt analogy for the South Asian community in the United States today. When South Asians first started streaming into America in growing numbers after the Hart-Cellar Act was passed in 1965, there was a natural patriotism, a penchant for flag-waving. Ethnic newspapers like India Abroad sprang up celebrating Indian achievements. Among South Asians in the United States, Indians make up the single largest group.
Today, after forty years of steady and growing immigration, the community is vibrant, rich in diversity, and strong in numbers. There is no better example than Edison, New Jersey, where Sanjay Wadhwa’s parents, Arjun and Rashmi, now live. Its central thoroughfare, Oak Tree Road, is called “Little India.” Every store on the street—even the auto repair shop—is owned by an Indian-American.
Much like the Irish-Americans and the Italian-Americans in the first half of the twentieth century, Indian-Americans in the twenty-first century have emerged as a force to be reckoned with in the United States. They no longer are confined to walking the corridors of corporate America; they now stalk the halls of justice. Forty years ago, when Rajat Gupta arrived in the United States, or even twenty years ago when he ascended to the helm of McKinsey, Indian-Americans were too small in number and too invisible a group to matter. Today, as tragic and heartbreaking as Gupta’s fall from grace is, it is a sign that Indians, much like the immigrant groups before them, have attained a certain security and once unimaginable position in American society. They are large enough in number to be counted and, more important, they constitute a diverse collection of voices. No longer fearful of standing out, the children of the twice blessed are all too eager to stand up.
Photos
Rajat Gupta and his wife, Anita, heading into the White House for a state dinner in honor of Indian prime minister Dr. Manmohan Singh on November 24, 2009.
Danielle Chiesi, in a tank top (right); and her mother, in a floral-patterned dress; Galleon’s Gary Rosenbach, in a T-shirt; and his wife, Susan (left), watch Kenny Rogers perform in the Rajaratnams’ Greenwich, Connecticut, backyard. Raj is standing in the background wearing a cowboy hat.
Raj and his kid brother Rengan in Kenya for Raj’s fiftieth-birthday bash. At the August 2007 event, guests wore black T-shirts that read “The Riotous, Rowdy, Rebellious Raj Tribe.”
The campus of IIT Delhi, where Rajat Gupta graduated in 1971. The school has become an incubator for global leaders in technology and finance. (Courtesy of the Hindu.)
Kashmir House at the Doon School. The old boy network of Doscos, India’s answer to Etonians, aided Anil Kumar as he helped launch McKinsey’s business in India.
The aspiration of a Doon School boy as laid out by its first headmaster.
Sanjay Wadhwa, senior associate regional director of the New York office, came to the United States from India in 1986. Wadhwa paid for his undergraduate education by working fifty-hour weeks as a stockroom boy and cashier at a local drugstore.
US attorney for the Southern District of New York, Preet Bharara. Bharara, whose parents immigrated to New Jersey from India in 1970, would oversee the prosecution of his fellow South Asians Raj Rajaratnam and Rajat Gupta. (Courtesy of Rick Maiman.)
Special assistant US attorney, Andrew Michaelson, who started working on the Galleon case at the SEC and was later loaned out to the US attorney’s office.
Rajat Gupta presents an award to Henry Kravis at the American India Foundation gala in 2009. After Gupta retired from McKinsey, he went to work for Kravis and his partners at Kohlberg Kravis Roberts & Co.
Rajat Gupta and Hillary Clinton at the American India Foundation gala awards dinner in April 2004.
Rajat Gupta and his lead attorney, Gary Naftalis. (Courtesy of Rick Maiman.)
Anil Kumar and his wife, Malvika, leave the Manhattan federal courthouse after his sentencing. (Courtesy of Rick Maiman.)
Raj Rajaratnam leaves the Manhattan federal courthouse after his conviction. His
sentence of eleven years was the stiffest punishment doled out to date in an insider
trading case. (Courtesy of Rick Maiman.)
Acknowledgments
This book would not have been possible without the ambitious vision of Shawn Coyne. From the beginning, S
hawn, my agent, saw that this book was much more than a book about insider trading. He realized early on that the Galleon case was the perfect way to tell the story that I had been wrestling with for years: the rise and maturation of the South Asian diaspora in the United States. Shawn worked with me every step of the way, serving as editorial counsel on the project and guiding me as I navigated the twists and turns of this complex tale. John Brodie, my editor at Business Plus, enhanced the manuscript with his deft touch and keen appreciation of the important ingredients of a great story, honed by over twenty years as a working journalist. He, Meredith Haggerty, Carolyn Kurek, and the entire team at Grand Central did everything they could to make my first book a smooth journey.
A few others played a great role in producing this book. Sue Radlauer, the librarian at Forbes, devoted hours and hours of her own time, too immeasurable to count, to unearthing sources for me, finding research by academics, and tracking down articles that offered a key nugget or two. Like all librarians, Sue is a prodigious digger and invariably produced far more than I asked for, often going the extra mile to put the information she gleaned in context for me.
N. Ram, the former editor in chief of the Hindu, the largest newspaper in South India, opened up to me the most valuable possession a journalist has: his Rolodex, which he had cultivated through a remarkable forty-six-year career as one of the country’s finest journalists. Ram read the manuscript and offered constructive suggestions on how to strengthen it. Although he knew of me only through his daughter Vidya, with whom I worked at Forbes, I am grateful that he had the faith to believe in me and trust me with his contacts. I am also indebted to Vidya for introductions in her ever-widening circle of sources.
A close friend in London, Uma Waide, who edits books, made gentle but important suggestions to the manuscript. I have always respected Uma as a friend. In the past two years, I have come to admire her as an editor.
Seena Simon, an old friend from my early days in New York, read the manuscript with a critical eye. A number of former colleagues from Forbes were invaluable too. Kai Falkenberg was unflinching in her advice on legal issues, Naazneen Karmali helped open doors in India, Janet Novack assisted in all things Washington, and Tom Post got the ball rolling by championing a piece about Raj Rajaratnam for the Forbes 400 more than two years ago.
I am grateful to my fact checker and researcher, Matthew Resignola, who was tireless in chasing down people and checking memos, even offering to help during the Christmas holidays.
Much of the reporting for this book was done in New York, which once was my home. A number of old friends and some new ones eased my reentry to the city. First and foremost, I want to thank my old colleague from the Wall Street Journal, Ianthe Dugan, who made her home “a home away from home”; the Southworths and their daughter Leela; Dave Smith and Amy Stiller, my friends from my old building who made me feel as if I had never left; and my cousins.
Several others helped in this endeavor in various ways: Peter Lattman, George Packer, Andrew Sorkin, Kaja Whitehouse, Scott DeCarlo, Quinn Martin, Vai Rajan, Azam Ahmed, David Glovin, Patricia Hurtado, Chad Bray, Kara Scannell, Parmy Olson, Juju Menon, Raghu Kumar, Shaku Sindle, Anjollie Feradov, and my old friends at home in London, Shonu Das, Sara Calian, Amanda Partridge, and Stephen Macmillan. Finally, a special thanks to my former editor at the Wall Street Journal, Michael Siconolfi, for teaching me how to fish.
Writing a book is a lonely experience, and I would not have survived had it not been for Martin, who has accompanied me on this journey. His quirky sense of humor made me laugh when all I wanted to do was cry, and his love has nourished me when I flagged. All I hope is that one day I can do the same for him.
My father came to the United States in 1958 to study for his doctorate at Princeton University, and my mother came a year later on her own for an internship at the Brooklyn Public Library. Even at eighty-two, she is still a librarian at heart, eager to dig up a book or find a source for me. Like many in this story, my parents are symbols of Indian achievement in the United States. I am grateful to them for their love and support and, most important, for the values they instilled in me. No one could be blessed with more wonderful parents.
A Note on Methodology
This book was born with the arrests on October 16, 2009, of Raj Rajaratnam, Anil Kumar, and Rajiv Goel. Ever since I wrote a piece for the Wall Street Journal in 2006 about the Doon School and its graduates who had made it to the highest echelons of corporate America, I had been struggling to find an engaging way to write about the South Asian diaspora in the United States. The Galleon arrests provided the perfect vehicle. What is remarkable about the case is that it told many stories in a single story. It was a tale of the early migration of Indians to the United States, their breathtakingly swift rise and heady success in America, and last but most important, the emergence of a second generation of Indians who would ignore the blind loyalties their fathers held to kin and country and serve as a model of assimilated Indians in America. Of course, when I started on this odyssey I had no way of knowing that the story would also offer a compelling tale of India under the rule of the British and a window into the sacrifices that men like Rajat’s father made so that every Indian today has the privilege to live in an independent and free country.
This book is based on more than two hundred interviews in three countries: the United States, the United Kingdom, and India. To understand the forces that influenced Gupta, I traveled to Calcutta, now Kolkata, where I visited his uncle’s house, and interviewed his cousins, one of whom lives in the very same house where Rajat’s father was brought after his death. I also examined police records and spoke to journalists who knew his father, which helped round out the picture of Gupta’s father that I had started to form by trolling through records in the British Library and the Library of Congress.
A word is necessary on the spelling of an important name in the book. Rajat Gupta spells his father’s name Ashwini, which is the way his name would have been pronounced in Bengali. However, the account of Gupta’s father’s freedom-fighting crimes is drawn from historical sources and newspaper articles in which his name is given as Aswini. Such inconsistencies in name spellings are not uncommon in India and arise from the challenge of translating Indian names into English. My research establishes that Rajat’s father and the Aswini Gupta depicted in historical records and newspapers are one and the same person. A piece entitled “Aswini Gupta: A Life Sketch” that ran in the Hindusthan Standard on November 5, 1964, says that Gupta, the head of its news bureau in Delhi, was the younger brother of Mrs. Tatini Das, a former principal of Bethune College, Calcutta. He is similarly identified as the brother of Mrs. Tatini Das in newspaper reports in the mid-1930s on a crime and conviction case that was a cause célèbre in Calcutta. Finally, Indian cities in the book are referred to by their names at the time of the events in the story with a few exceptions, such as Pondicherry, which, despite its official name change, still goes by its old colonial name.
My research on Gupta continued in Delhi, which I visited three times. There I began to form an impression of the adolescent Gupta, and through the sources I cultivated for the Journal story on the Doon School, I was able to track Anil Kumar’s metamorphosis from quiet, unassuming schoolboy to master-of-the-universe wannabe.
In a sense, like the characters in my book, I was twice blessed in my reporting. This is the first book on an insider trading case written with the aid of nearly fifty wiretapped calls, some of which run nearly 30 minutes. The wiretaps offered an extraordinary glimpse into white-collar crimes, typically shrouded from public view, being perpetrated in real time. More important for me as a writer, the wiretaps were key in developing an understanding of a protagonist’s real character and a person’s state of mind. In situations where a person’s thinking could not be drawn from a direct interview of the subject, the wiretaps were invaluable.
All quoted conversations from these recordings are footnoted as coming from the relevant recordings and r
eflect the actual words spoken by the participants in the exchange. Other quoted conversations re-created in the book do not necessarily come from the individuals party to the conversations but rather reflect remarks heard by others or are contained in testimony or court documents such as FBI interview notes. Unlike the wiretaps, these re-created but quoted conversations in some cases rely on the individuals’ memories and represent their best recollections. Like the wiretaps, though, these sources were important in painting a scene or providing a window into a person’s thinking. Invariably, in a story like this, individuals try to retouch the truth after the fact or in their public declarations. This book relies to a large extent on conversations some of the key players had with their close circle of friends. In my view, it is in these private, unguarded moments that the closest semblance of the “truth” emerges.
In instances where there are two competing versions of events, I have footnoted the conflicting account and explained the reason I chose the version that appears in the text. Typical is the recounting of Anil Kumar’s role in the growth of the McKinsey Knowledge Center. My reporting points to Kumar’s playing a pivotal role in getting the Knowledge Center off the ground and leveraging his relationship with Gupta to secure approval from McKinsey’s Shareholder Committee. McKinsey disagrees. A spokesman flatly says, “That is not accurate. To our knowledge, Anil Kumar did not play such a role in getting support for the knowledge initiative.” My decision to follow my reporting in the text is based on interviews I conducted with individuals who were involved in the setup of the center at the time and who, in my mind, don’t have a vested interest in the way Kumar is portrayed. These individuals, while conceding that they were not fans of Kumar’s, said he was instrumental in the creation of the center.
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