[ by Melanie Gretchen ]

Rajat Gupta is going places.  To Rwanda for community service?  To Prison?

Former Goldman Sachs Director has a 2 p.m. sentencing hearing before U.S. District Judge Jed Rakoff.  Gupta was found guilty by jury of his peers - he was charged for leaking stock tips to Galleon Group LLC co-founder Raj Rajaratnam. 

Mr. Gupta, 63, who ran McKinsey & Co. from 1994 to 2003 was convicted in June of securities fraud and conspiracy.  Prosecutors lobbied for up to 10 years in prison.  Mr. Gupta has sought probation and community service, as his lawyer has proposed that he work with needy children in New York or the poor in Rwanda.

Arguments:

• Defense attorney Gary Naftalis in a brief to Judge Rakoff last week: "Rajat Gupta has lived an exemplary life of uncommon accomplishment, compassion and generosity."
• Prosecutors' reply: Mr. Gupta "was at the pinnacle of a profession built on protecting client confidences.  Yet, time and time again, over the span of nearly two years, Gupta flouted the law and abused his position of trust."

Case Recap:

• Mr. Gupta rose to the top of corporate America after being orphaned as an 18-year-old in Kolkata
• History: Among his many accomplishments, Mr. Gupta (i) has served on the boards of Procter & Gamble Co. and AMR Corp., (ii) won praise for his charity from Microsoft Corp. Chairman Bill Gates and former United Nations Secretary-General Kofi Annan and, (iii) as McKinsey’s youngest managing director, almost tripled firm revenue.
• Most prominent of 70 people convicted since a nationwide insider-trading crackdown by U.S. prosecutors began 4 years ago
• Currently remains free on bail, while Rajaratnam, whose case will come before an appeals court tomorrow, is serving 11 years after his own conviction last year.

Why Rwanda? Besides support from Bill Gates and Kofi Annan, Mr. Gupta was championed by 400 letters to the judge chronicling what his lawyer said was Gupta’s lifetime of good works.  Among them was one from Tharcisse Karugarama, minister of justice and attorney general of Rwanda, who backed a defense proposal that Mr. Gupta work with the rural poor fighting AIDS, malaria and extreme poverty, based on Mr. Gupta's experience as chairman of the Global Fund, a public-health advocacy group for the developing world.

In contrast, prosecutors have argued that 97 months to 121 months, because he violated confidences and breached his duty as a senior official.  In the event of success by prosecutors' bid for a prison sentence, Judge Rakoff must also decide whether Mr. Gupta will report to an institution in coming weeks or may remain free until the outcome of his appeal.  The U.S. Bureau of Prisons would decide where Mr. Gupta serves his time.

The case: U.S. v. Gupta, 11-cr-907, U.S. District Court, Southern District of New York (Manhattan).

For further details, go to [Bloomberg, 10/24/12].