The $500,000 bail for a California woman charged with feeding inside information about technology companies to hedge funds was revoked Wednesday after prosecutors unveiled new evidence supporting their argument that she wanted to flee to China or Taiwan after her arrest.
U.S. District Judge Robert Patterson denied bail for 43-year-old Winifred Jiau after prosecutors said in a letter that she spoke in a jailhouse conversation in Chinese with a friend in coded language about fleeing.
Prosecutors also said she failed to disclose $20,000 in cash in her residence at the time of her December arrest and that she had moved more than $100,000 from a bank account in the months before she was charged.
Jiau, a native of Taiwan, has pleaded not guilty to security fraud charges.
Patterson had granted the $500,000 bail last week with the understanding that she would pledge a $25,000 piece of property and $50,000 in cash as collateral to go along with other assets put up by friends.
Prosecutors said one of those friends Jiau intended to use to secure her bail was involved in some of the moves she had made to prepare to flee the country.
For instance, prosecutors said, Jiau and the friend had a cryptic, highly secretive conversation on Jan. 13 in which she admitted she had taken some unidentified items, possibly cash and other assets, to Beijing in October. The letter noted that FBI agents found suitcases in plain view in her Fremont, Calif., bedroom at the time of her Dec. 28 arrest.
The government cited a December jailhouse conversation in which Jiau said she "was very surprised" and "was not prepared" when she was arrested to rebut claims by her lawyers that she would have fled before her arrest if she wanted to because she knew it was coming.
Prosecutors say Jiau earned $200,000 during a two-year span when she worked as a consultant for Primary Global Research, a Mountain View, Calif., firm. Prosecutors say she provided inside information to hedge funds while she worked there, including one tip that earned a hedge fund more than $820,000 in profits.
Jiau is among several former employees of Primary Global Research who have been charged in an ever-widening probe of those in the securities industry who pass off inside information as legitimate research after coaxing employees of public companies to provide information about their companies before it is made public.
That probe grew out of what prosecutors have called the largest hedge fund insider trading case in history. In that investigation, more than 25 people were arrested and 19 of them have pleaded guilty. The main defendant, one-time billionaire Raj Rajaratnam, is scheduled to go to trial March 8. The founder of the Galleon Group of hedge funds has pleaded not guilty.