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Begins an 11-year prison sentence:

Sri Lankan born Rajaratnam’s prison trades may run from postage stamps to mackerel packets

Raj Rajaratnam leaves behind the ruins of a Wall Street career that made him a billionaire hedge fund manager to begin an 11-year prison sentence, the price for running a far-flung insider-trading conspiracy that turned tips from company executives and technology consultants into cash.

He will trade in suits for a uniform, a luxury Manhattan apartment for a cell, and credit cards and cash for postage stamps and packages of mackerel, the black market currency of his new home.

The millions of dollars he made on illegal trades will be replaced by manual labor starting at 12 cents an hour.

Rajaratnam surrendered today at about 12:30 p.m., according to Robert Lanza, a spokesman for Federal Medical Center Devens in Ayer, Massachusetts. At 12:15 p.m., a red SUV with tinted windows and government license plates entered the prison grounds with a state police escort.

Today, Rajaratnam will be fingerprinted, photographed, strip-searched and issued a number to serve as his identity.

It is the beginning of what - for the convicted co-founder of Galleon Group LLC, agreed two former inmates and an ex-U.S. prison official - will be very hard time.

Rajaratnam, 54, was sentenced in October after a federal jury in Manhattan found him guilty of 14 counts of securities fraud and conspiracy.

He directed colleagues, consultants and corporate officers to leak information that made him tens of millions of dollars.

Longest Sentence

His was the longest sentence ever handed down for such a crime, and the culmination of a four-year nationwide probe of insider trading.

Last week, a three-judge panel rejected his last-minute plea to remain free while he appeals his conviction.

Devens is located on a decommissioned military base about 40 miles northwest of Boston. Rajaratnam said in court papers that he has health problems including diabetes, and will probably need dialysis and a kidney transplant.

As he gets used to his new surroundings, the former inmates and ex-prison official predicted Rajaratnam will have a particularly difficult experience adjusting to the loss of control faced by many former executives when jailed.

“You’re a white-collar guy who’s running a company or a stock broker wearing a suit and tie,” said Jack Donson, a consultant who retired from the U.S. Bureau of Prisons in June after 23 years working as a correctional treatment specialist.

“The hardest thing to get used to is being told what to do by a $30,000-a-year corrections officer.”

‘Shock For Him’

Devens houses 1,180 male inmates, said John Colautti, another prison spokesman. An adjacent minimum security prison has 124 men. John Dowd, a lawyer for Rajaratnam, declined to comment.

“A lot of things are going to be a shock for him. It is not by any means a country club,” said Joe Tomaso, who served 10 months at Devens in 2007 for mail fraud. “Everything is very rigid and structured.”

Rajaratnam, whose wiretapped telephone calls played a key role in his conviction, will be limited to 300 minutes a month on the phone - 400 minutes during the holiday months of November and December.

Except when he’s talking to his lawyers, his mail and calls will be monitored by prison staff. He’ll have to be sure he’s in his assigned spot for the five daily counts or risk a trip to the Special Housing Unit, the high-security lockup that inmates call “the hole.”

‘Disgusting’ Mackerel

He can move around the prison only during the 15-minute “open movement” periods, which are called every hour on the half hour. He’ll be told when he may eat, go to bed and buy extra food and supplies from the prison commissary.

Prisoners can buy luxuries including fresh vegetables and laundry service on the black market, paying with postage stamps and plastic and foil packages of mackerel, according to Tomaso.

“It’s disgusting, and I never ate it, nor would I, but mackerel, along with postage stamps, are inmate currency,” he said. Corrections officers check inmates’ lockers for the items. An inmate caught with too many stamps or too much mackerel may be disciplined - even sent to the hole, Tomaso said.

After his formal prison intake, he’ll be given prison identification with his inmate number - 62785-054 according to the BOP website - which will be his identity to prison staff.

Rajaratnam’s street clothes and possessions - with the exception of a wedding ring, glasses and a few other approved items - will be taken away, according to the author of “Federal Prison: A Comprehensive Survival Guide,” who uses the pseudonym “Jonathan Richards” in the book and on his website.

Tuberculosis

Richards, who was released from Devens in April 2007 after serving six months for student loan fraud, spoke on condition of anonymity because he doesn’t want his prison record publicized.

New inmates coming to Devens from outside the prison system are typically sent to the Special Housing Unit for at least 48 hours while waiting for the results of a test for tuberculosis, said Colautti, the Devens spokesman.

Most inmates outside the 132-bed hospital unit are housed in cells or in “cubes,” which are surrounded by a 5-foot concrete wall, according to Richards. The open-dormitory style cubes are noisy and put inmates sleeping in the top bunks within sight of everyone in the unit.

Inmates are required to work, and Rajaratnam will probably be assigned a job, possibly with limitations required by his physical condition, said Donson, who advises lawyers, defendants and inmates on the workings of the federal prison system.

“If you can push a broom or if you can dust off a windowsill, you’re going to be doing something,” said Donson. New Devens inmates are typically assigned to work in the kitchen, one of the least popular jobs, according to Colautti.

Ex-Drug Addicts

Devens houses male inmates who need specialized or long- term medical or mental health care, according to the BOP. If he requires dialysis for his failing kidneys, Rajaratnam will probably spend the time surrounded by ex-drug addicts suffering the effects of prolonged intravenous drug use, Donson said.

Devens is also the only federal facility that offers a high-intensity program for inmates classified as high-risk sexual offenders, the Residential Sex Offender Treatment Program.

Hundreds of physically healthy sex offenders, including child molesters and men serving sentences for Internet sex crimes, are assigned to Devens both for treatment and their protection, according to BOP documents. About a quarter of Devens inmates are sex offenders, said Colautti.

The Devens Federal Medical Center is classified as an “administrative facility,” which means it takes prisoners of all security designations. About one in five Devens inmates are considered medium- or high-security, Colautti said. Almost 20 are serving life sentences, he said.

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