By Nate Raymond

BOSTON A former employee of a federal prison in Massachusetts has agreed to plead guilty to secretly accepting thousands of dollars from Raj Rajaratnam while the Galleon Group hedge fund founder was serving time for insider trading, according to court records and a person familiar with the matter.

Federal prosecutors in Boston on Monday said William Tidwell accepted over $90,000 in benefits and a $50,000 property loan from a high net-worth inmate while working as a correctional counselor at the Federal Medical Center Devens in Ayer, Massachusetts.

Court papers only identified the former inmate as "Individual 1." A person familiar with the matter said he was Rajaratnam, who was sentenced in 2011 to 11 years in prison and was released early in 2019.

Prosecutors had accused Rajaratnam, the founder of the New York-based hedge fund Galleon Group, of making as much as $63.8 million in illicit profit from 2003 to 2009 trading on stocks including eBay, Goldman Sachs and Google.

Rajaratnam was not charged in Monday's case against Tidwell.

"This is the first we're learning of the charges against Mr. Tidwell," said Samidh Guha, Rajaratnam's lawyer. "We of course would cooperate appropriately with the government if and when they reach out to us."

Tidwell as part of a plea deal has agreed to plead guilty to bribery in violation of official duties, making false statements to a bank and identity theft. His lawyer, Brad Bailey, declined to comment.

Starting in 2018, Tidwell began receiving undisclosed benefits from Rajaratnam and a close friend and business associate of Rajaratnam, according to charging papers and the person familiar with the matter.

Those benefits included $25,000 to help pay off loans for a family member and more than $65,000 in fees and other benefits stemming from an agreement to help manage certain properties, including one Tidwell lived at, prosecutors said.

During this time, Tidwell showed favoritism to the wealthy inmate by delaying his transfer from a coveted unit within the prison where inmates had more privacy and allowing him to set up legal calls more easily than other inmates, prosecutors said.

Later, after Rajaratnam was released from prison, Tidwell in 2020 received a $50,000 loan from the onetime inmate's friend to buy a house. Prosecutors said he lied on a bank loan application about the source of that money.

(Reporting by Nate Raymond in Boston; Editing by David Bario and Chris Reese)