United States is contemplating to expand the insider trading charges against the Sri Lanka-born U.S. Galleon hedge fund founder Raj Rajaratnam, Financial Times said in a New York datelined report.

“US prosecutors said on Tuesday they planned to expand the insider trading charges against Raj Rajaratnam, and accuse the billionaire founder of the Galleon hedge fund group of making at least $36m in illicit profits – more than twice the amount originally alleged”, it said.

The report said that the new claims were made in court documents filed by prosecutors in opposition to Mr Rajaratnam’s second request to reduce his $100m bail bond.

In the third week of December a U.S. grand jury indicted the richest Sri Lanka-born U.S. citizen and co-defendant Danielle Chiesi on charges of securities fraud on 17 counts.

The 52-year-old, worth $3.7 billion in assets, was arrested on October 16 by agents of the Federal Bureau of Investigation (FBI) on charges of vast insider trading. He was among six persons arrested on charges of securities fraud and conspiracy to commit securities fraud.

The case which began with two accused expanded in November to include 20 people on both criminal and civil charges. After the indictment, Rajaratnam’s lawyer John Dowd in a statement had said his client was innocent and that he looked forward to his day in court when a jury of his fellow citizens will examine and evaluate all of the evidence.

The case of Rajaratnam is followed closely both by the Government and the business circles here. Rated as one of the richest businessmen in the world, Mr. Rajaratnam is reckoned to be Sri Lanka’s most affluent son of the soil. The founder and head of the New York-based Galleon Management hedge fund, Rajaratnam has a stake in the top 10 listed Sri Lankan companies.

The Galleon Hedge Founder is also facing charges of being a leading contributor of money to the LTTE. According to the Sri Lankan Defence Ministry, the LTTE’s arms procurer and Prabhakaran’s successor, Kumar Pathmanadan (aka KP), revealed the information during his interrogation. He is now in now in government custody.

“KP’s evidence of the LTTE receiving money from America’s biggest swindler of its stock market have been corroborated by two letters now in the hands of the U.S. intelligence,” the Defence Ministry had said.

Despite his best efforts to contain the fall-out of the arrest, the travails of the business tycoon continue. Days after he wrote to the employees and clients of the Galleon group promising intended to “conduct an orderly wind-down” of the firm’s hedge funds, Mr. Rajaratnam was faced with a law suit in Newark, New Jersey, by a number of persons who identified themselves as victims of the LTTE’s terror acts and accused Rajaratnam and his father of knowingly helping the terrorist group.

Reports from the U.S. had said Mr. Rajaratnam was being sued for unspecified amounts in damages for the LTTE’s acts of violence. Jim Walden, his lawyer, was quoted as saying that the charges brought by the Sri Lankan victims were baseless. Besides, he lost the bid to reduce the value of his bail condition and sold off some of his firm’s holdings in Sri Lanka to partly finance his $100 million bail.

According to Financial Times report hearing about Mr Rajaratnam’s bail is scheduled to take place on Friday.