Chris Collins sentenced to 26 months in prison for insider trading

Chris Collins will serve more than two years behind bars for the insider trading case that caused his fall from congressman to convicted felon.

U.S. District Court Judge Vernon Broderick sentenced Collins Friday evening in Manhattan to 26 months in federal prison and a $200,000 fine. The sentence is more than the year and a day recommended by the U.S. Probation and Pretrial Services System, but less than the nearly five years sought by prosecutors. 

 

Collins, 69, resigned as leader of New York’s 27th congressional district and pleaded guilty to insider trading and lying to the FBI in October.

 

The case stemmed from Collins’ role as a board member of Australian biotech company Innate Immunotherapeutics. While on the White House lawn June 22, 2017, Collins received an email that Innate’s multiple sclerosis drug failed clinical trials. Collins then called and tipped off his son Cameron Collins, allowing Cameron to dump his stock in Innate and avoid more than $500,000 in losses. 

 

Collins later lied about the scheme when questioned by the FBI in April 2018, telling agents that Cameron sold his stocks because he was spooked by Innate’s trading halt.

 

Toward the end of a lengthy court proceeding Friday, Collins broke into tears when asked by the judge whether he had anything to say. The Clarence Republican apologized to his constituents, his former colleagues and his family, saying he tarnished the family's reputation and violated his core values. He said the ordeal left him in a "dark place" and asked the court for mercy for him and his son.

 

Broderick told Collins he considered his time in public service and the many letters written on his behalf in deciding the sentence. But he also said Collins' crime "goes to the heart of our financial system" and "makes people believe the market is rigged." He lamented the district's lack of representation and said there is "no good explanation" for what Collins did.

 

"Collins’s greed and disregard for the law have now led to a criminal conviction for insider trading and lying to the FBI, his resignation from Congress, and over two years in federal prison. Lawmakers bear the profound privilege and responsibility of writing and passing laws, but equally as important, the absolute obligation of following them. Collins’s hubris is a stark reminder that the people of New York can and should demand more from their elected officials, and that no matter how powerful, no lawmaker is above the law,” said U.S. Attorney Geoffrey S. Berman, in a statement following the sentencing.

 

Collins, a Republican, was indicted in August 2018, but maintained his innocence and continued his re-election bid, going on to narrowly defeat Democrat Nate McMurray.

 

However, less than a year later, Collins resigned from the U.S. House of Representatives and pleaded guilty to one count of conspiracy to commit securities fraud and one count of making false statements to law enforcement officials.

 

“The residents in NY-27 deserve trusted, honest leadership. Today’s action closes a sad chapter for our community and brings Western New Yorkers living in this district closer to regaining engaged, principled representation,” said Rep. Brian Higgins, in a statement

 

Collins’ sentencing guidelines were 46 to 57 months in prison. Prosecutors wanted Collins to receive something on the high-end of that scale, writing in their sentencing submission that Collins embodies “the cynical idea that those in power who make the laws are not required to follow them.”

 

Former Assistant U.S. Attorney Anthony Bruce said he was not surprised by the length of the sentence.

"I expected it to be above what Collins asked for, what Collins' attorneys asked for, but on the other hand, I didn't expect the judge to go all the way up to the 57 months, the guidelines range that was in the pre-sentence report. I think he looked at this, the 26 months, as a deterrent to anybody who wants to do this in the future. I think it's a good sentence. I think it's right where it should be," Bruce told WBFO.

 

Bruce noted the judge's sentence cannot be appealed.

 

U.S. attorneys called Collins’ crime gratuitous, considering he easily could have afforded to cover for his son’s losses. They noted Collins’ baseball card collection alone is worth $1 million.

 

“His choice to commit fraud instead, as if the two options were morally equivalent, bespeaks a total disregard for the rules that are intended to govern everyone’s actions,” they wrote.

 

Collins’ attorneys were seeking a sentence of probation and home confinement. In their sentencing submission, they argued Collins’ career-ending felony conviction is punishment enough.

 

“He also carries the heavy burden of having caused his family significant pain, shame, and torment, which can never be undone,” wrote Jonathan Barr of Baker Hostetler law firm. “It is difficult to imagine a more painful punishment for a devoted father.”

 

Collins’ family, friends, business partners and even former congressional colleagues had submitted more than 100 letters asking Broderick for leniency. Many of the letters to the judge said Collins’ insider trading was out of character and a momentary lapse of judgment.

 

There were some signs that Broderick did not agree. In an order filed Wednesday asking questions of both the prosecution and defense, Broderick questioned whether Collins’ insider trading was truly a one-time mistake.

 

“How can the argument that Defendant Collins committed an emotional and impulsive act on June 22, 2017 be reconciled with his lying to law enforcement approximately ten months later?” Broderick wrote to Collins’ attorneys.

 

Collins, a businessman who had a role in several Western New York manufacturing companies, served as Erie County executive from 2008 to 2011. He was elected to Congress in 2012. Collins was the first member of Congress to endorse then-presidential candidate Donald Trump.

 

Cameron Collins and his future father-in-law Stephen Zarsky, who was also an Innate investor, will also be sentenced for insider trading Jan. 23.

 

Republican strategist Michael Caputo said the sentence handed to Collins was more than he expected. He expressed hope that once he serves his sentence, Collins can live a normal life in his new legal residence of Florida.

 

"I know the family is going through a lot and I hope that, now that this is over, Chris Collins and his family can move on. Hopefully, the prison sentence will be shortened through probationary services and he can get back to living his life," Caputo told WBFO.

 

Caputo ran an unsuccessful campaign by David Bellavia to unseat Collins, but said the latter never held a grudge.

 

Candidates running for the vacant 27th District seat reacted to the sentencing with mixed emotions. Likely Democratic candidate Nate McMurray, who lost narrowly to Collins in 2018, said he did not take joy in seeing Collins sentenced.

"But at the same time, justice must be served, and you can't ignore what happened. This region was lied to. We lost representation. We were told over and over again he would be vindicated. And he laughed at one point about the challenges and about the allegations. But now we see a very different version of Mr. Collins and it is a sad moment," McMurray said.

 

Republican state Senator Chris Jacobs, one of the candidates vying to represent the GOP in a special election that will likely be held April 28, called it a sad day for both Collins’ family and his former constituents.

 

“I guess the only good, I hope, is that it’s finally over and we can all move on, as the Collins family can, from this chapter. And hopefully, the Collins family can start rebuilding their lives,” said Jacobs.

 

Other Republican candidates running for the 27th District seat include state Senator Robert Ortt and former Darien town justice and Fox News contributor Beth Parlato.