Federal prosecutors are asking a judge to sentence former Republican New York congressman Chris Collins to nearly five years in prison after pleading guilty to being involved in an insider trading scheme as well as lying to the FBI.
Before his resignation, Collins had represented New York’s 27th Congressional District, which includes areas surrounding Buffalo and Rochester. He won reelection in November 2018, despite being criminally charged three months before.
Prosecutors in a court filing said on Monday that “the Government believes that a sentence at the top end of the Guidelines range is necessary in order to satisfy the objectives of [the federal criminal code] and in particular to promote respect for the law, to provide just punishment for the offense, and to achieve general deterrence.”
Federal sentence guidelines in the case have recommended between 47 and 57 months in prison, noted CNBC. Prosecutors also said they want to sentence Collins on the higher end of that range.
Collins pleaded guilty late last year in the case, which relates to an Australian biotechnology company, Innate Immunotherapeutics, a firm for which the former congressman sat on the board and held a significant stake in.
“I regret my actions beyond anything that I could explain here today,” Collins, 69, said in court at the time in October 2019, reported CNN. In a plea deal, he avoided other charges including securities fraud, conspiracy to commit wire fraud, and wire fraud.
“Collins admitted to, among other things, illegally tipping his son while standing on the White House lawn,” U.S. Attorney Geoffrey Berman said after his plea was entered, according to the news outlet. “By virtue of his position, Collins helped write the laws of his country, and acted as if the law didn’t apply to him.”
Prosecutors said that Collins learned in an email from Innate’s chief executive that a clinical trial for its proposed multiple sclerosis drug, MIS416, had failed. He told the news to his son Cameron Collins, who then told his fiancee, Lauren Zarsky, and her parents, Dorothy and Stephen Zarsky. By Collins’s actions, the Zarskys avoided significant losses in their stock holdings and began selling their shares of Innate Immunotherapeutics the next day, Reuters reported.
The firm’s stock fell 92 percent after the firm issued a press release about the failed drug test. Cameron Collins reportedly sold 1 million shares and avoided hundreds of thousands of dollars in potential losses.
Lauren and Dorothy Zarsky were not criminally charged in the case, but they reached civil settlements with the Securities and Exchange Commission.
According to prosecutors in their latest filing, “Collins pleaded guilty to one count of conspiring to commit securities fraud, in connection with his tipping his son, Cameron Collins, with material non-public information that would dramatically affect the stock price of Innate Immunotherapeutics Limited (“Innate”) so that Cameron could trade on that information and tip others, and to one count of making materially false statements to the Federal Bureau of Investigation (FBI) about this crime nearly a year after he had committed it.”
Cameron Collins and Stephen Zarsky, meanwhile, both pleaded guilty in the case, according to the Buffalo News. Prosecutors said recently that the younger Collins should get six months in prison.