WASHINGTON _ Former Rep. Chris Collins was sentenced to two years and two months in federal prison Friday for insider trading crimes he committed, ending a legal process that evolved from him calling the charges "meritless" shortly after he was indicted to him pleading guilty and proclaiming embarrassment for his actions.
Collins, a Republican who represented Western New York's 27th Congressional District for seven years and who was the first member of Congress to endorse Donald Trump for president, pleaded guilty on Oct. 1 to participating in a scheme to commit insider trading and lying to the FBI to conceal his illegal activity. He resigned from Congress the day before his guilty plea.
Sentencing guidelines prescribe Collins serve 46 to 57 months in federal prison, but the U.S. Probation Office recommended a lesser penalty: one year and one day in jail, a supervised release term and a $200,000 fine.
Collins' lawyers argued the recommendation was too much for the 69-year-old to spend in jail. In a sentencing memorandum filed earlier this month, Collins' attorneys say he should get probation with conditions of a significant house arrest term and extensive community service, in addition to a substantial fine.
Several Republican lawmakers, including former Speaker John A. Boehner, who is Collins' neighbor in Marco Island, Fla., wrote letters of support to United States District Judge Vernon Broderick on Collins' behalf. Calls for leniency on Collins' prison sentence included pleas from his family and friends.
Those calls for leniency weren't the only letters sent to the judge in the lead-up to Friday's sentencing. Former constituents of Collins asked Broderick to impose the maximum sentence on their disgraced congressman, some of whom called for him to pay back his salary from the date of his indictment to his resignation, and forfeit his federal pension.
Collins served on the board of directors for Innate Immunotherapeutics, an Australian biotechnology company, the success of which was largely contingent on the progress of MIS416, a drug designed to treat a form of multiple sclerosis. The drug failed the clinical trial, passage of which was required for the company to commercialize the drug and profit from it.
On June 22, 2017, while he was at the White House attending the annual Congressional Picnic, Collins received an email from Innate's CEO informing him the drug failed its clinical test _ a revelation that would inevitably sink the company's stock. At that time, Innate had not publicly released the results and Collins, using his insider knowledge, called his son, Cameron, to alert him of the confidential news so Cameron and others close to the family could unload their shares of Innate to avoid enormous losses.
Had the trial been successful, it would have been a boon for Innate's stock; however, when Innate publicly announced the clinical trial failure of MIS416, the stock price dove 92%.
Those who were tipped off by Collins avoided $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.
Collins held approximately 16.8% of Innate's stock _ one of the largest holders of Innate securities _ and Cameron Collins held approximately 2.3% of the company's shares.
Prosecutors have previously noted that Collins is rather wealthy, with an estimated fortune of $13.8 million, conservatively. They cite Collins' possession of a baseball card collection and a coin collection, valued at $1 million each. Cameron Collins has a net worth of more than $21 million, according to prosecutors.
Michael J. Hook, Collins' chief of staff at the time Innate's stock crashed, held a substantial amount of shares in the company and was one of many who incurred large losses when the news of the failed drug trial was released to the public by Innate on June 26, 2017. Hook sold between $65,000 and $150,000 in Innate shares over the course of a two-day stretch on June 29 and 30, 2017.
The actions of the disgraced congressman propelled the House to ban members from serving on boards of public companies. House Resolution 6 created a new clause in the Code of Official Conduct, which became effective this year. It prohibits members, delegates, resident commissioners, officers or employees in the House from serving as an officer or director of any public company.
