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Originally published Wednesday, April 20, 2011 at 9:27 AM

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NY judge scolds feds over 'voyeuristic' recording

A judge said Wednesday that he's deeply troubled by an "apparently voyeuristic intrusion" by investigators who eavesdropped on phone calls between an insider trading defendant and his wife in a prosecution in which the government touted its first-ever extensive use of wiretaps in a white collar case.

Associated Press

NEW YORK —

A judge said Wednesday that he's deeply troubled by an "apparently voyeuristic intrusion" by investigators who eavesdropped on phone calls between an insider trading defendant and his wife in a prosecution in which the government touted its first-ever extensive use of wiretaps in a white collar case.

U.S. District Judge Richard Sullivan rejected a pretrial request by a lawyer for Craig Drimal to toss out evidence gathered from more than 1,000 intercepted calls against the former Galleon Group trader on the grounds that the government abused the permission it received to eavesdrop on Drimal's calls. He said the wiretap was professionally conducted and generally well-executed overall.

Drimal is among more than two dozen people who were charged in the biggest hedge fund insider trading probe in history. Closing arguments began Wednesday in the trial of Drimal's former boss, Raj Rajaratnam, the founder of the Galleon Group of hedge funds.

The judge said he was disturbed by monitoring of several of phone calls involving Drimal, including a 52-second message from his wife in which she discussed, "in detail, intimate aspects of their relationship" and another four minutes that were monitored of a 6 1/2-minute call in which Drimal and his wife had a "deeply personal and intimate discussion about their marriage."

The judge also cited calls involving conversations about the Drimals' children, home renovation projects and one in which the last 49 seconds of the call make clear it was a marital spat.

Sullivan said the agent who monitored the calls at a pretrial hearing provided no credible explanation for his failure to stop listening to the conversations once it became clear that the calls were privileged and not pertinent to the investigation. Investigators are supposed to hang up if a call is not pertinent to their probe.

Sullivan wrote that he was "deeply troubled by this unnecessary and apparently voyeuristic intrusion into the Drimals' private life."

At a hearing in which the judge heard testimony from federal agents and prosecutors, Sullivan said it was "disgraceful" that agents failed to stop listening to conversations of a deeply personal nature.

The government did not dispute that several calls between Drimal and his wife should not have been monitored. It notified Sullivan that the U.S. attorney's office has assembled a committee of supervisory prosecutors to review all aspects of the office's practices concerning the supervision of wiretaps and when monitors should stop listening.

Drimal's lawyer, JaneAnne Murray, said: "Hopefully, the deeply troubling privacy intrusions Judge Sullivan found here will not occur again."

Rajaratnam is accused of making as much as $68 million illegally through secret tips from coworkers and employees of public companies. He has maintained he based trades only on publically available information. Several recorded conversations gathered through wiretaps were played at the closings. During the trial, about four dozen taped conversations were aired for the jury.

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