(Reuters) - A Boston-area real estate entrepreneur was sentenced on Wednesday to 20 months in prison after being convicted of engaging in insider trading in connection with Apollo Tyres Ltd’s attempt to buy Cooper Tire & Rubber Co in 2013.
Amit Kanodia, 49, was also ordered by U.S. District Judge Nathaniel Gorton in Boston to pay a $200,000 fine and forfeit $242,500 after a jury in October found him guilty on conspiracy and securities fraud charges, prosecutors said.
Martin Weinberg, a lawyer for Kanodia, said his client “will continue to challenge the legal basis for his conviction, but is respectful of today’s sentence of 20 months, which was substantially below the sentencing guidelines.”
Kanodia, a real estate entrepreneur and private equity investor, was at the center of what prosecutors said was an insider trading scheme involving two of his friends that resulted in around $1.27 million in illegal profits.
Prosecutors said that by late 2012, Kanodia, who lives in Brookline, Massachusetts, had learned details about a planned merger between India-based Apollo and Cooper Tire from his then-wife, who was Apollo’s chief legal officer.
Prosecutors said Kanodia tipped off two of his friends, including Iftikar Ahmed, a general partner of Greenwich, Connecticut-based Oak Investment Partners, and encouraged them to trade.
When the deal was announced, Ahmed sold his interest in Cooper Tire, making $1.1 million in profits, while Kanodia’s other friend, Steven Watson, made about $170,000, prosecutors said.
Both men shared some of their proceeds with Kanodia, depositing money in an account he opened for a charity, Lincoln Charitable Foundation, ostensibly to raise money for flood victims in India.
Kanodia then transferred the money into various personal accounts, prosecutors said. He also used the money to fund an investment in the venture capital fund where Ahmed worked, they said.
The merger was abandoned in December 2013 after an acrimonious legal battle between Apollo and Cooper Tire.
Watson pleaded guilty in August 2015 and became a cooperating witness in the case against Kanodia. He was sentenced in November to two years of probation and ordered to forfeit $170,000 and pay a $25,000 fine.
Ahmed, who was charged with Kanodia in April 2015, fled the United States for India in May 2015. Prosecutors have since separately accused him of embezzling $54 million from Oak Investment Partners. He remains a fugitive.
The case is U.S. v. Kanodia et al, U.S. District Court, District of Massachusetts, No. 15-cr-10131.
Reporting by Nate Raymond in New York; Editing by Jonathan Oatis