A federal judge on Friday sentenced former congressman Chris Collins to 26 months in prison for his part in an insider trading scheme and lying to the FBI.
“You had a duty to meet and you betrayed that duty,” U.S. District Judge Vernon Broderick said as he handed down the sentence.
Collins tearfully apologized to his family and his constituents, acknowledging that he tipped off his son to confidential information that a small Australian biotechnology company’s new therapy for multiple sclerosis had failed a critical clinical trial. Collins’s son and several others used the information to avoid more than $700,000 in losses. Collins also admitted that he later lied to the FBI about the incident.
“I stand here today a disgraced former congressman,” said Collins, who was one of President Donald Trump’s first supporters in Congress. “I cannot face my constituents. What I have done has marked me for life.”
Collins said he particularly regretted the impact the case would have on his son, who is scheduled to be sentenced next week. “I have destroyed the reputation of my son,” he said.
Collins’s attorneys cited his age, 69, years of public service and track record as a businessman who saved hundreds of jobs in New York, in asking Broderick to sentence Collins to probation, home detention and community service. But prosecutors asked for a much longer sentence, 46 to 57 months in prison, arguing that the New York Republican had violated a public trust and the loss of status and money was not enough of a penalty.
After a more-than-three-hour hearing, Broderick said Collins was “highly unlikely to be a recidivist” but that he still considered the former congressman’s crime significant. Insider trading creates the perception for investors that the financial markets are rigged, he said.
Broderick received more than 100 letters of support for Collins, including from John Boehner, the former Republican speaker of the House, Collins’s family and former business associates. Others, including some former constituents, sent angry letters calling for a tough sentence.
Broderick sentenced Collins to 26 months each for two counts: conspiracy to commit securities fraud and making false statements. The sentences are to run concurrently. Collins was also fined $200,000.
The case ended the career of one of Trump’s most ardent early supporters. Collins represented New York’s 27th Congressional District, which encompasses suburban and rural areas stretching east of the Buffalo metropolitan area, for more than five years. The district is a Republican stronghold that supported Trump by a wide margin in the presidential election.
Even before facing federal charges, Collins was under scrutiny for his role in promoting Innate Immunotherapeutics, a small Australian company that was developing a new therapy for multiple sclerosis. Collins served on the company’s board and was its largest shareholder.
Then, while at the June 2017 congressional picnic at the White House, Collins received an email from Innate Immunotherapeutics’s chief executive alerting the company’s board that an eagerly anticipated drug trial had been a failure, according to court filings. Minutes later, the filings said, Collins responded to the email: “Wow. Makes no sense. How are these results even possible???”
Collins frantically attempted to contact his son, who owned millions of Innate Immunotherapeutics shares, according to the indictment. Within a few minutes, Collins and his son called each other six times before connecting and talking for six minutes. During that call, Collins told his son about the failed drug trial, according to the indictment, which cites phone and bank records as well as texts.
With that insider knowledge, Collins helped his family avoid significant losses before the news became public and the company’s stock price fell more than 90%, prosecutors allege. (Because Collins was a board member, he was prevented from unloading his stock and reportedly lost millions.)
Collins was “emotionally devastated” by the failed drug trial and when he shared the news with his son, the former congressman’s attorneys argued. “It was a stupid, impulsive action. He didn’t need the money, neither did his son,” said Jonathan Barr, one of Collins’s attorneys. “People are not robots.”
And when the FBI questioned him months later, making a surprise visit to his home at 6:30 a.m., Collins didn’t want to implicate himself or his son in a potential crime, Barr said. “He has paid a very heavy and public price for his conduct,” he said.
But prosecutors were skeptical. Collins didn’t act out of emotion but from financial interests, which he exacerbated by lying to the FBI, said Assistant U.S. Attorney Max Nicholas. “We do not agree this was a crime of emotion,” he said. “The fact that he was in a position to write the country’s laws… there is nobody in a better position to know not to lie to the FBI.”
Prosecutors also faulted Collins for running for reelection after being charged in 2018. “There was a courtship of the public trust… to hold this high office having just lied to the FBI to cover up a crime he committed ten months earlier,” Nicholas said.
After the federal indictment, Collins initially suspended his campaign but then reversed course. He was narrowly elected to his fourth term months after being indicted. He resigned his seat in October after entering a guilty plea.
Several of Collins former constituents wrote to the judge complaining that they had been left unrepresented on Capitol Hill and now faced the cost of putting on an another election.
While standing before the judge, Collins sometimes struggled to form words as he sobbed and talked of finding himself in a “dark hole.” He was now branded a felon, unable to vote or even participate in the Boy Scouts as he had for decades, Collins said.
“People feel sorry for me. They shouldn’t,” he said. “I did what I did, and I violated my core values.”