India-born former Goldman Sachs director Rajat Gupta will start serving his two-year jail term from June 17 after a US court rejected his motion seeking surrender of the prison date and that he continue to be free on bail till his case on insider trading charges is reheard.
The US Court of Appeals on Friday issued a brief order that said "appellant, through counsel, moves for a stay of Appellant's surrender and continuation of bail pending further appellate review. It is hereby ordered that the motion is denied."
He is expected to be assigned to a medium-security prison in Otisville, New York, about 70 miles from New York City.
65-year-old Gupta had filed his 23-page motion earlier this month asking the court for an order staying his surrender date and continuing bail pending further appellate review of his conviction on insider trading charges.
The Harvard-educated former McKinsey head had lost his appeal to overturn his conviction on insider trading charges and was ordered in April to surrender and begin his two-year prison sentence on June 17.
He had petitioned that a three-judge panel, which upheld his conviction and two-year prison sentence, should reconsider its decision and the appeals court rehear the case, arguing that "critical evidence" in his favour was excluded at trial.
Manhattan federal prosecutor Preet Bharara had opposed Gupta's motion to stay his surrender date and be free on bail till his case is reheard.
The district court's order directing Gupta to surrender to the Bureau of Prisons on June 17 was "issued on Gupta's consent," Bharara said in the motion.
"Gupta's motion to stay the surrender date and continue bail pending his anticipated petition for certiorari should be denied...(His) motion... lacks merit. Gupta's motion curiously omits any reference to the fact that he consented to the District Court's entry of the surrender order that he now asks this Court to stay," Bharara said.
After a federal jury had found Gupta guilty in 2012 of passing confidential boardroom information to his hedge fund friend Raj Rajaratnam, he was sentenced to two years in prison, ordered to pay $5 million in fine and a separate $6 million in restitution to Goldman Sachs.
Gupta had challenged his conviction, contending that he is entitled to a new trial on the grounds that the trial court erred by admitting statements of a co-conspirator, recorded in wiretapped telephone conversations to which Gupta was not a party, and by excluding relevant evidence offered by Gupta.