Federal prosecutors want former Rep. Chris Collins to spend “the top end” of a sentence guideline that ranges from almost four years to just under five years in prison for the crimes he pleaded guilty to in October: insider trading and lying to the FBI to conceal an insider trading scheme.
“There is no case that Collins cites, and no insider trading case of which the Government is aware, in which the circumstances call as clearly as they do here for a sentence that carries a sufficient term of incarceration to ensure respect for the law,” Max Nicholas, an assistant U.S. attorney for the Southern District of New York, wrote on behalf of the government.
Judge Vernon S. Broderick will consider the government’s filing along with requests by Collins’ former constituents of New York’s 27th Congressional District that he impose the maximum 57 months prescribed by sentencing guidelines. Current and former GOP lawmakers, including former Speaker John A. Boehner, have written letters of support for Collins to Broderick. His family and friends have also written on his behalf.
Sentencing guidelines call for Collins to serve anywhere from 46 to 57 months in federal prison, but his lawyers argue the 69-year-old should not go to jail. They want Collins to get probation with conditions of a significant house arrest term and extensive community service, along with a substantial fine. The U.S. Probation Office recommended Collins spend one year and one day in jail, a supervised release term and a $200,000 fine.
“A sentence at the top end of the Guidelines range is necessary to assure the public that those in power do not stand above the law,” prosecutors wrote. “The numerous letters that Congressman Collins’s former constituents have submitted to the Court expressing their deep frustration and disappointment with Collins’s secret illegal behavior reinforce the need for a substantial period of incarceration to promote respect for the law.”
Collins will be sentenced by Broderick at 2:30 p.m. Friday in New York City.
The New York Republican served on the board of an Australian biotechnology company, Innate Immunotherapeutics, and was alerted by the CEO in an email that Innate’s multiple sclerosis drug, MIS416, failed a crucial clinical drug trial. That drug was a primary component of Innate’s business and the company’s success hinged largely on the performance of MIS416.
Collins then called his son, Cameron, and urged him, along with others, to sell shares of Innate to avoid grave losses once the information of the failed test became public knowledge.
If the trial was successful, that would have been great news for the stock price, but because it failed, the stock price plummeted 92 percent when the information became public.
“As a member of Innate’s Board of Directors, Congressman Collins had a duty not to disclose material non-public information about the company that came into his possession,” prosecutors wrote. “During the summer of 2017, however, he violated that duty in order to confer a financial benefit on his family that ordinary investors, who lacked access to inside information, could not obtain.”
This allowed those close to Collins to avoid $768,000 in losses, although the former congressman did not trade his shares and lost millions. Collins could not trade his shares because they were still held by a transfer agent in Australia.
“It is critically important that the sentence imposed on Congressman Collins drive home the message that status does not constitute a basis for leniency,” prosecutors wrote. “Collins’s decision to break the law while making the law — a decision that he made twice, ten months apart — was brazen.”
Collins was one of Innate’s largest shareholders, holding 16.8 percent of its stock. Cameron held 2.3 percent in Innate stock.
Prosecutors also note that Collins committed this financial crime with a vast personal wealth estimated at $13.8 million, conservatively. They cite Collins’ possession of a baseball card collection and a coin collection each valued at $1 million each. Cameron has a net worth of over $21 million, prosecutors say.
“Collins could have ameliorated any concern he had that Cameron would lose money in Innate by simply gifting Cameron money. 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,” prosecutors said.
“His subsequent lies to the FBI indicate the same disregard. There is plainly a need for the sentence imposed in this case to be substantial enough that it will promote respect for the law, in light of the lack of respect that Collins has shown for it and the importance of making clear that conduct of this kind, by anyone, is not tolerated.”