The Raj Rajaratnam fraud case used an evidentiary technique specifically new to business fraud cases, wiretaps. Historically, white collar crime cases like securities fraud and insider trading cases have been put together by prosecutors through witness interviews and loads of documents. Often, the cases are hard to prove because the evidence used to build the case is indirect, but wiretaps allow jurors to actually hear the defendant’s conversation.
Before, wiretaps were once only used by the Department of Justice for mob and drug cases. Now, U.S. Attorney Preet Bharara has said the Department of Justice will use all available means of evidence to investigate corporate fraud. According to one attorney who has represented bankers and banks, evidence gathered through wiretap is extremely effective because the recorded individual can directly incriminate him or herself and it helps make clear that the individual understood the consequences of his or her actions.
In the past, there were two things that stood in the way of using wiretaps for business fraud cases: cultural and legal hurdles. Within the bureaucratic culture of the Department of Justice, it was difficult to press the importance of wiretaps for white collar criminal cases. Prosecutors within the Department of Justice are now encouraged to use more aggressive tactics.
Legally, a federal judge must approve of a wiretap. Two things have to be shown to the judge. The first step is to demonstrate there was no other reasonable way to acquire the evidence and the second is that the use of the wiretap must be minimally invasive.
The criminal defense attorney for Rajaratnam plans to appeal the case’s verdict by challenging the legality of the government wiretaps.
Source: NPR, “Wiretaps: Not just for mob bosses anymore,” Carrie Johnson, 5/23/11