New York, Feb 1 (IANS): A former Indian American employee of Galleon Group, who played a key role in the conviction of hedge fund billionaire Raj Rajaratnam for insider trading, has been sentenced to one year in prison.

Federal district judge Jed S. Rakoff Thursday also ordered Roomy Khan, 54, to serve three years of probation and pay $1.525 million in restitution, money she made by trading on confidential information about Google and Hilton Hotels among others.

Despite the assistance that Khan, a Delhi University graduate, had provided prosecutors in the case against Rajaratnam, her actions-in particular, lying to federal investigators-were serious enough to merit a prison term, Rakoff said.

"You cannot have it both ways," he was quoted as saying by the New York Times. "You cannot obstruct justice and then say, 'Well, because I've done good things since, forget about it.' "

The punishment, Rakoff added, sends a "very important message" about the consequences of hindering a government investigation.

Khan, who had sought five years of probation, pleaded guilty in 2009 to conspiracy to commit securities fraud and securities fraud, a charge that carried a maximum prison sentence of 20 years. She also admitted to lying to Federal Bureau of Investigation (FBI) agents.
The case was the second time Khan had been convicted of illegally passing information to Rajaratnam, according to the Times.

In a letter to Rakoff, Khan described how she returned to illegal trading, saying she needed money and felt pressure to maintain appearances.

In a separate case not directly related, Jason Pflaum, a witness who gathered evidence about his former Indian-American boss, hedge fund manager Samir Barai, was sentenced to two years of probation.

Pflaum, who pleaded guilty in 2010 to securities fraud and conspiracy to commit securities fraud, had helped prosecutors secure a guilty plea from Barai on insider trading charges, Times said.