Just under a year after Anilesh Ahuja, the founder of hedge fund Premium Point Investments, was convicted on charges that he fraudulently inflated the value of the firm’s investments, he is alleging that a federal prosecutor hid evidence in his case.
Attorneys for Ahuja, who was the chief executive and chief investment officer at Premium Point, filed a letter in the U.S. District Court for the Southern District of New York on Monday asking for the court to require the government to more broadly disclose evidence related to his case.
In May 2018, authorities arrested Ahuja, Premium Point trader Jeremy Shor, and Premium Point portfolio manager Amin Majidi for allegedly mis-marking certain securities held in their structured credit hedge funds between 2014 and 2016, Institutional Investor previously reported. The complaint also alleged that the three manipulated performance numbers and lied to investors about it.
[II Deep Dive: Hedge Fund Execs Convicted of Fraud]
Majidi pled guilty in October 2018 and is cooperating with the federal prosecutors as a witness. It is a speech he gave at that hearing that is central to the latest developments in Ahuja’s case.
According to Ahuja’s attorneys, the version of Majidi’s speech that he delivered in court was “materially different” from the one his attorney provided, and the government did not disclose that to Ahuja or Shor until June 2020, according to the letter from Ahuja’s attorneys, filed Monday.
The differences included an expansion of the timeline when the asset mis-marking took place, deleting references to Majidi pressuring traders, and the added mention of Jeremy Shor, according to Ahuja’s attorneys. The federal prosecutor also added the phrase: “I knew what I was doing was wrong,” which was not in Majidi’s initial speech.
“As a result of a [Freedom of Information Act] request to the Executive Office of United States Attorneys that the defense never should have had to make, we know that the government concealed significant evidence, made material misrepresentations to the Court, and, months later, failed to correct them even when it was clear to the government that they were not true,” Ahuja’s attorneys wrote in a letter.
The attorneys added that the government “put specific names, dates and words in Majidi’s mouth” and that the defense was not permitted to cross-examine him on these details because they were not in the earlier version.
In June court filings by the federal prosecutors, the prosecutors admitted that “certain representations” in the federal prosecutor’s court filings were “wrong.”
According to the letters from the federal prosecutors, the government had previously provided Majidi a draft version of the speech he gave at his plea hearing. The final version that Majidi read was different than the draft version, the federal government acknowledged in the letter.
The government did not disclose this to the court or to Ahuja’s attorneys, it conceded in the letter, though it argued that the mistakes do not invalidate the verdict.
“While the government’s communications with Majidi’s counsel were entirely proper, its recounting of those communications to the court was partly inaccurate,” according to a June 19 letter from Audrey Strauss, who represents the federal government in the case. “Some of the answers provided to the Court during trial were incorrect, albeit unintentionally. Again, this should have been brought to the Court’s and the parties’ attention in March. While these mistakes were not made in bad faith, and while they did not prejudice the defendants at trial and do not implicate the verdict against either of them, they should not have happened.”
Ahuja’s attorneys are asking the court to require the federal government to more fully disclose details on how they have interacted with witnesses. According to a filing from the federal government on Tuesday, it plans to respond by July 16.
