Tuesday, October 20, 2020

Former congressman Chris Collins sentenced to 2 years prison in insider trading case

-

Representative Chris Collins had told so many people, from fellow House members to friends and relatives, about a surefire investment: a little-known Australian drug company that was developing a treatment for multiple sclerosis.

But when Mr. Collins learned about a critical drug trial that had failed, he set in motion a chain of events that led to a federal indictment, the end of his career in Congress and, on Friday, a 26-month sentence.

The judge, Vernon S. Broderick of Federal District Court in Manhattan, said Mr. Collins had a higher obligation to obey the law, given his position in the House and on the board of the drug company.

“You had a duty to meet, and you betrayed that duty,” the judge said.

- Advertisement -

The sentence capped a stunning fall for Mr. Collins, of western New York, who rose to prominence after he became the first sitting member of Congress to endorse Donald Trump, a fellow Republican, in the 2016 campaign, and emerged as one of the president’s most ardent supporters.

Mr. Collins delivered a long, tearful apology before he was sentenced, apologizing to those he hurt and lied to, including his family, his constituents and the F.B.I.

“People feel sorry for me. They shouldn’t,” he said in court. “I did what I did, and I violated my core values.”

Mr. Collins, 69, pleaded guilty on Oct. 1 to providing nonpublic information, admitting that he called his son, Cameron, about the failed drug trial; the warning allowed his son to avoid hundreds of thousands of dollars in financial losses. Mr. Collins also admitted that he had lied to the F.B.I. about the scheme.

- Advertisement -

Mr. Collins’s lawyers, citing what they said was their client’s long history of public service, had asked Judge Broderick to sentence Mr. Collins to probation, combined with a substantial period of home detention and extensive community service.

But the office of Geoffrey S. Berman, the United States attorney in Manhattan, sought a sentence of close to five years, writing to the judge on Monday that Mr. Collins “came to embody the cynical idea that those in power who make the laws are not required to follow them.”

Mr. Collins, a wealthy entrepreneur who was first elected to Congress in 2012 from the 27th District in western New York, was narrowly re-elected for a fourth term in 2018, months after he was indicted. Initially, he had said he would abandon his re-election bid and suspend his campaign.

He resigned his seat on Sept. 30 last year, and pleaded guilty the next day to charges of conspiracy to commit securities fraud and making false statements. He faced a maximum sentence of 10 years in prison.

Even before his indictment, Mr. Collins’s ties to the Australian drug company, Innate Immunotherapeutics, had raised ethical questions in Congress, where he sat on a House committee with jurisdiction over health care companies.

Mr. Collins was a member of Innate’s board of directors and owned nearly 17 percent of its stock, a federal indictment said.

According to the indictment, Mr. Collins was attending the annual Congressional Picnic on the South Lawn of the White House on June 22, 2017, when he received an email from Simon Wilkinson, the chief executive of Innate.




Mr. Wilkinson’s email, sent to Mr. Collins and other board members, reported that an experimental multiple sclerosis drug called MIS416 that the firm was developing had failed the clinical trial — “extremely bad news,” Mr. Wilkinson wrote in the email, according to the indictment.

The indictment said Mr. Collins responded: “Wow. Makes no sense. How are these results even possible???”

Mr. Collins quickly set out to reach his son to warn him of the bad news. The congressman called repeatedly, finally reaching him from the White House lawn on his seventh try, divulging information that was not public in a call that lasted six minutes and eight seconds, according to the indictment.

“I was devastated by that news, in thinking about the multiple sclerosis patients we would not be able to treat,” Mr. Collins said in court when he pleaded guilty last year. “I was in a very emotional state at that moment in time, and I called my son, Cameron.”

- Advertisement -

By selling Innate stock before news of the failed drug trial became public several days later, Cameron Collins, 27, avoided losses of about $570,000, prosecutors said. Cameron Collins also passed the information to others, including his fiancée’s father, Stephen Zarsky, 67, who avoided losses of about $144,000, the government said.

Cameron Collins and Mr. Zarsky were also indicted; each pleaded guilty to one count of conspiracy to commit securities fraud, and both are to be sentenced next week.

Several of Mr. Collins’s former congressional colleagues had written to the judge on his behalf, including John A. Boehner, the former Republican speaker of the House, and Representative Peter T. King, Republican of New York.

The court also received scores of letters from Mr. Collins’s former constituents and others, most opposing leniency.

The government, in arguing for a stiff sentence, had placed Mr. Collins’s assets at more than $13.8 million, which included a baseball card collection and a coin collection, each worth more than $1 million.

“Collins could have ameliorated any concern he had that Cameron would lose money in Innate by simply gifting Cameron money,” the prosecutors said in their letter to the judge on Monday, adding that Mr. Collins’s illegal act was totally gratuitous.

“Collins committed a financial crime without having any financial need,” the prosecutors wrote.

Mr. Collins’s wealth no longer stems from his interests in Innate Immunotherapeutics: The company changed its name to Amplia Therapeutics in September 2018, and now trades at a nickel a share.

Source: nytimes.com

MUST READ

Goldman to pay over $2 billion in DOJ’s 1MDB Probe

Goldman Sachs Group Inc. has reached a long-awaited pact with the U.S. Department of Justice to pay more than $2 billion for the bank’s...

Ex-managers of Security firm pleads guilty in Santa Clara County concealed gun permit bribery scandal

Two former managers of a Silicon Valley international security firm pleaded guilty Monday to charges related to a bribery scheme to obtain concealed firearms...

Ohio former House Speaker Larry Householder to stand for reelection amid bribery charges

Republican Rep. Larry Householder’s name will be on the ballot Election Day as the disgraced Ohio lawmaker intends to serve his district for another...

Billionaire Robert Smith to Pay $140 million after admitting to tax evasion

Billionaire Robert Smith will pay about $140 million and acknowledge wrongdoing to end a four-year U.S. tax investigation involving assets held in offshore tax...

Mexico’s ex-army chief arrested in US on charges of drug trafficking, money laundering

Former Mexican Defense Secretary Gen. Salvador Cienfuegos, who led the country’s armed forces for six years under then-President Enrique Peña Nieto, has been arrested...
Advertisement
Advertisement

Latest News

This Week

Ex-CEO of dietary supplement maker USPLabs sentenced to prison in fraud case

They wanted to lose weight and get stronger to boost their military careers. But after taking USPLabs' dietary supplements – with ingredients made in...

Rapper Nuke Bizzle charged with COVID-19 relief aid fraud after bragging in music video

A rapper who bragged about defrauding the government’s unemployment program in a music video has been arrested on federal charges of carrying out the...

Medical device maker Merit Medical agrees to pay $18m to settle false claims

Medical device maker Merit Medical Systems Inc. (MMSI), of South Jordan, Utah, has agreed to pay $18 million to resolve allegations that the company...

La Joya Housing Authority former maintenance director charged with fraud

The former maintenance director for the La Joya Housing Authority is the latest person to be indicted in a case in which the former...
Advertisement

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks