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Reuters/Brendan McDermid
Roomy Khan was once reportedly worth $50 million.

The maid and the trader: Two Indian women involved in one of Wall Street’s biggest trading scams

By Shelly Walia & Madhura Karnik

It was one of the biggest insider trading scams in the high-risk, testosterone-fuelled financial stratosphere of Wall Street.

But after the 12-year-old investigation into the shenanigans of former hedge fund boss Raj Rajaratnam and one-time Goldman Sachs director Rajat Gupta, two India-born women found themselves at the centre of the scandal—one was a key witness, and the other a victim.

Roomy Khan, once a flashy millionaire trader who worked for Rajaratnam, is the better known of the two. At her peak, she was reportedly worth $50 million, and was directly involved in the scam when she provided insider information to Rajaratnam.

Little was known of the other woman—until now.

Manju Das was an uneducated housekeeper for Anil Kumar—one of Rajaratnam’s aides in his illegal trading activities—but whose name was used to create Galleon offshore accounts.

While Khan has been written about, including in the New York Times, Das’ story wasn’t well-known until this month when the Nation magazine’s Nilita Vachani wrote an in-depth profile of the middle-aged woman who, after a 10-year stint in the US, now lives in a village in West Bengal.

The millionaire maid

In 1998, Kumar and his wife recruited Das as a caretaker for their luxurious apartment in Saratoga, California, and took her from Delhi on a B1 domestic-employee visa.

Kumar—who had known Rajaratnam from his university days—was one of his informants for almost six years. In return for millions of dollars, he let out secret information about the clients of consulting firm McKinsey, where he was a senior partner and director.

Once in the US, Kumar stole Das’ identity, without her knowledge, for money laundering. He established her as an India-based offshore investor, and designed a mechanism to receive money from Rajaratnam through complex wire transfers. That money finally landed in Galleon offshore accounts in the name of Das.

“From roughly 2003 till 2009, hundreds of thousands of dollars were deposited each year in her name,” wrote the Nation. She was probably once the richest maid in the world, it added.

Meanwhile, Das was underpaid and overworked in California.

“I worked all the time,” Das told the Nation. “I cleaned the house, I cooked Indian food. I washed their clothes. I washed their clothes by hand, otherwise their fine fabrics would have run.”

Even when the illiterate woman took up the matter with Kumar, “he told me the minimum wage didn’t apply to me since I lived with them and ate their food and they took me to India once a year,” she told the Nation. She also did not get any health insurance.

In 2009, within weeks of Kumar’s arrest, Das was sent to Delhi. Here, a man met her and took her passport and some other documents she carried. She then went to her village in West Bengal.

Today, Das is finding it difficult to make ends meet.

AP Photo/Jin Lee
Raj Rajaratnam, co-founder of Galleon Group LLC, leaves Federal Court after his sentencing on 2011.

A hip injury that she got while she was working for the Kumar household doesn’t allow her to sit or stand for long durations. Her son is a taxi driver, and the only earning member of the family.

Till date, Kumar owes her Rs8 lakh ($12,000) as severance pay, but there’s little hope the man will deliver.

The apprentice

In 2009, the Federal Bureau of Investigation described Khan as a trader who worked as a paid consultant with a New York-based hedge fund.

Khan, now 54, is a former Intel and Galleon employee, and has served a one-year term.

She met Rajaratnam during one of her assignments at Intel, soon after she graduated from business school at UC Berkeley. The work-assignment soon turned into friendship and Khan started providing confidential information to Rajaratnam about Intel. She later also worked with Galleon for a brief period before working independently as a stock trader.

A month after she left Galleon, FBI had showed up at her house to probe the dealings at Intel. In 2001, after engaging with investigating officials for around 17 months, Khan pleaded guilty of wire fraud.

She had to serve a six-month home detention and also paid a fine. Later in 2005, after losing a lot of money as a stock trader she approached Rajaratnam for help. In return, she offered him a tip about a company.

It was this tip that led to her questioning by investigators once again in 2007 and that’s when she agreed to become a cooperating witness.

Khan had expensive tastes. She paid $10.5 million for a house in Atherton, California, in 2000. In her book, The Billionaire’s Apprentice, Anita Raghavan, author and a former Wall Street Journal journalist, wrote:

Roomy liked to spend money, and she spent it extravagantly. She bought a seventeen-carat diamond at Neiman Marcus. For running up a shopping tab of more than $1 million, the department store gave her a BMW.

“I am not kidding when I say I had money,” Khan told the New York Times. “I had a lot of money.”