Feds: NY Hedge Fund Boss Funded Terror
Donations were funneled to Tamil Tigers
By Nick McMaster,  Newser Staff
Posted Oct 19, 2009 1:20 AM CDT
Raj Rajaratnam, billionaire founder of the Galleon Group, is led in handcuffs from FBI headquarters.   (AP Photo/ Louis Lanzano)
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(Newser) – A hedge-fund manager busted for insider trading has been contributing money to a Sri Lankan terrorist group, according to FBI agents. Raj Rajaratnam came under scrutiny in a federal probe into the Tamil Rehabilitation Organization, a charity which was charged with funneling money to the Liberation Tigers of Tamil Eelam, a violent separatist group defeated by the Sri Lankan government last spring. Rajaratnam donated $2 million to TRO USA, which promptly wired the funds to Sri Lankan accounts, according to authorities.

The hedge-fund manager also created a charity, Tsunami Relief, which gave another $1.5 million to the TRO, ostensibly to help reconstruction efforts after the 2004 tsunami, the Wall Street Journal reports. It's not the first time Rajaratnam’s Galleon Group has been targeted by authorities. It once paid $2 million to the SEC to settle a claim that it was practicing an illegal form of short-selling.