REFUGEE

ri Lankan billionaire Raj Rajaratnam, who faces U.S. criminal charges that he earned millions of dollars trading on inside information, was accused in a civil lawsuit in New Jersey of financing attacks by the Tamil Tigers.

The suit was filed today by more than 30 victims and survivors of the Sri Lankan separatist group’s attacks. It also names J.M. Rajaratnam, the father of the founder of the Galleon Group hedge fund, and the Tamil Relief Organization, a Sri Lankan-based non governmental organization that the complaint says is controlled by the Tamil Tigers. The group is formally known as the Liberation Tigers of Tamil Elam and was designated by the U.S. Treasury Department as a terrorist group in 1997.

The plaintiffs claim to document the transfer of millions of dollars from Rajaratnam and his family’s foundation to the Tamil Relief Organization, which the Treasury Department in 2007 described as a front for the Tamil Tigers. Rajaratnam, his father and the Tamil Relief Organization were sued under the Alien Tort Claims Act, which allows U.S. courts to hear suits by noncitizens claiming violations of international law.

The three “have knowingly provided financial and material support to LTTE with the intent to advance the LTTE’s terror campaign,” according to the complaint.

‘Untrue and Libelous’

“The accusation that Mr. Rajaratnam supported the LTTE is flatly untrue and libelous,” his lawyer, Jim Walden of Gibson, Dunn & Crutcher LLP, said in a statement. “Mr. Rajaratnam has the greatest sympathy for all victims of violence in Sri Lanka and has a long history of helping Sri Lankans of all ethnic groups through substantial charitable donations over many years.”

At its peak, the Tamil Tigers controlled a quarter of Sri Lanka’s territory as part of its fight for a separate homeland in the country’s north and east. Besides the U.S., Sri Lanka, the European Union and India designate the Tamil Tigers a terrorist organization.

Rajaratnam, who is free on $100 million bail, was among six people arrested on Oct. 16 by federal prosecutors in New York and accused of trading stocks on inside information. He’s denied the charges. Prosecutors said they have taped conversations of him being tipped by some of the others in the case, including former executives at Bear Stearns Asset Management. Galleon Group managed about $3.7 billion before Rajaratnam’s arrest.

The New Jersey lawsuit was announced in a press release issued by lawyers bringing the case, including the firms of Motley Rice LLC of Mount Pleasant, South Carolina, and Newark, New Jersey-based Lite DePalma Greenberg & Rivas. The filing couldn’t be immediately confirmed independently.

The plaintiffs claim Rajaratnam made contributions to the Tamil Tigers individually, on behalf of his family’s charitable foundation, and as founder of a New York-based tsunami relief fund.

The case is Krishanthi v. Rajaratnam, U.S. District Court, District of New Jersey