By Tom Rivers, Editor Posted 17 January 2020 at 9:12 pm
Chris Collins was sentenced to 26 months in federal prison today for participating in a scheme to commit insider trading and for making false statements to federal law enforcement agents when interviewed about his conduct. He also was fined $200,000.
Collins, who resigned from Congress on Sept. 30, insisted he was innocent during a re-election campaign. He won a very close race against Nate McMurray, a Democrat, in November 2018.
McMurray is seeking the position again. He issued this statement after Collins was sentenced:
“Years of lies by Collins and those who justified his crimes ends like this. Tears. An empty seat. It’s a sad moment. No sentence can heal the damage caused. The sting will linger.
“Remember this. Who brought us here. So when we look back, we will see how far we’ve come. I’m heading to my son’s basketball game, watching a movie with my family, going to sleep, and waking up tomorrow to continue the fight to restore integrity to NY-27 and Washington.”
State Sen. Rob Ortt also is running to fill the vacant seat in Congress. Ortt issued this statement:
“The constituents of NY-27 deserve better, and today provides us the opportunity to close this disappointing chapter and start fresh. This district deserves a faithful and hardworking conservative representing them in Congress, putting the needs of Western New York and America first. I believe I am the candidate best qualified to do so and it is my sincere hope that I’m afforded the opportunity to once again serve my country.”
Nate McMurray, a Democrat running for Congress in NY-27, is calling for Chris Collins, who recently resigned after pleading guilty to insider trading and lying to the FBI, to return the Congressional salary he has collected since his indictment in August 2018.
McMurray sent a letter to Judge Vernon S. Broderick asking the judge to consider ordering Collins to return his salary and forfeit his pension as a part of sentencing. McMurray lost a close election to Collins last November.
While calling Collins’ case “inherently tragic” and expressing sympathy for Collins’ family and victims, McMurray also pointed out that Collins had profited from his deception of voters in his district and deserved to lose his salary as a result.
“Following his guilty plea last week, Mr. Collins has admitted that his actions were in fact illegal; that he knew they were illegal; and that his claims of innocence were false,” McMurray wrote in a letter to the judge. “With his re-election predicated on an admittedly false claim of innocence, I urge that in sentencing, you recognize this fraud on the taxpayers of this nation and the people of New York’s 27th Congressional District and require him, in addition to whatever other penalties you deem appropriate, to repay his salary from the date of his indictment until his resignation and forfeit his taxpayer-funded pension.
After months of proclaiming his innocence, Collins changed his plea to “guilty” last week and admitted in court that he knew what he was doing was illegal.
Collins will be sentenced in federal court in Manhattan on January 17, 2020.
Press Release, Geoffrey S. Berman, U.S. Attorney for the Southern District of New York
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today that Christopher Collins, who represented the 27th District of New York as a member of the U.S. House of Representatives, pled guilty to participating in a scheme to commit insider trading and to making false statements to federal law enforcement agents when interviewed about his conduct.
Chris Collins
“By virtue of his office, Christopher Collins helped write the laws of this country, but he acted as if the law did not apply to him,” U.S. Attorney Geoffrey S. Berman said. “Today, by pleading guilty, Collins acknowledged that while he was a member of Congress he committed insider trading and then lied to the FBI in an attempt to cover it up. Today’s plea is a reminder that all citizens stand equal before the law in our criminal justice system.”
Collins, 69, pled guilty to one count of conspiracy to commit securities fraud, in violation of Title 18, United States Code, Section 371, which carries a maximum penalty of five years in prison, and one count of making false statements to law enforcement officials, in violation of Title 18, United States Code, Section 1001, which also carries a maximum penalty of five years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the Judge.
Collins will be sentenced January 17, 2020.
Mr. Berman praised the outstanding work of the FBI and thanked the U.S. Securities and Exchange Commission for its assistance.
The following facts are based on the allegations contained in the Superseding Indictment and statements made in related court filings and proceedings:
The Insider Trading Scheme
In or about June 2017, Christopher Collins, who, in addition to serving on Innate’s Board of Directors, was also one of Innate’s largest shareholders, participated in a scheme to commit insider trading. Specifically, on or about June 22, 2017, Collins learned that MIS416 – a multiple sclerosis drug that Innate was developing – had failed a critical drug trial that was meant to determine the drug’s clinical efficacy (the “Drug Trial”).
The negative Drug Trial results were highly confidential, and, as an insider who owed duties of trust and confidence to Innate, Collins was obligated to keep the Drug Trial results secret until Innate publicly released them. Instead, in breach of those duties, Collins tipped his son, Cameron Collins, who was also a substantial Innate shareholder, so that Cameron Collins could make timely trades and tip others before Innate publicly released the Drug Trial results.
Cameron Collins traded on the inside information and passed it to the father of his fiancée, Stephen Zarsky, as well as to three individuals not named in the Superseding Indictment (“Individual-1,” “Individual-2,” and “Individual-6”), so that they could utilize the information for the same purpose. Zarsky, in turn, traded on the information and used it to tip three more individuals not named in the Superseding Indictment (“Individual-3,” “Individual-4,” and “Individual-5,”) so that they too could engage in timely trades in Innate stock. All of the trades preceded the public release of the negative Drug Trial results.
In total, these trades allowed Cameron Collins and Zarsky, and Individual-1 through Individual-6, to avoid over $768,000 in losses that they would have otherwise incurred if they had sold their stock in Innate after the Drug Trial results became public.
The Drug Trial Results
In or about October 2014, Innate initiated a Phase 2B clinical trial of its primary drug, MIS416. Successful completion of the Drug Trial was a necessary prerequisite to the commercialization of MIS416. Because Innate had no other significant products in development, its stock price was tied to the success of MIS416.
The Drug Trial was widely expected to be completed around the summer of 2017. For example, on or about June 9, 2017, Innate’s chief executive officer sent various individuals, including Chris Collins, an email stating that “the delivery date for [the] review and ‘verdict’” of the Drug Trial “will [] occur at COB on US Thursday June 22nd.”
As the summer progressed, individuals within Innate remained optimistic that MIS416’s Drug Trial results would be positive. The initial Drug Trial results were made available by trial administrators to Innate’s CEO on June 22, 2017. These results established that MIS416 lacked therapeutic value in the treatment of multiple sclerosis. The results were not publicly released at that time. Instead, they were released publicly on June 26, 2017, after the U.S. markets had closed. Innate’s stock price subsequently crashed, dropping 92% on the first trading day following the public announcement.
Dissemination of the Drug Trial Results
On or about June 22, 2017, at approximately 6:55 p.m., Innate’s CEO sent an email describing the Drug Trial results to the company’s Board of Directors, including Collins. The email explained to Innate’s Board of Directors for the first time that the Drug Trial had been a failure. The email began, in part, “I have bad news to report,” and continued to explain that “the top line analysis of the ‘intent to treat’ patient population (ie every subject who was successfully enrolled in the study) would pretty clearly indicate[s] ‘clinical failure.’” The email continued, “Top-line 12-month data . . . show no clinically meaningful or statistically significant differences in [outcomes] between MIS416 and placebo,” and concluded by stating, “No doubt we will want to consider this extremely bad news. . . .”
At the time Collins received this email, he was attending the Congressional Picnic at the White House. At 7:10 p.m., Collins replied to the email, stating, in part, “Wow. Makes no sense. How are these results even possible???” After responding to the Innate CEO’s email, Collins called his son, Cameron Collins. They traded six missed calls between 7:11 p.m. and 7:15 p.m. At 7:16 p.m., Chris Collins and Cameron Collins spoke for more than six minutes. During that six-minute phone call, Christopher Collins told Cameron Collins, in sum and substance, that MIS416 had failed the Drug Trial.
Trading and Tipping by Cameron Collins and Zarsky
Cameron Collins began placing orders to sell his Innate shares the morning after he received inside information from his father. Between the morning of Friday, June 23, 2017 and the close of the market on Monday, June 26, 2017, Cameron Collins sold approximately 1,391,500 shares of Innate stock. These sales allowed Cameron Collins to avoid approximately $570,900 in losses.
Furthermore, after learning the Drug Trial results from Chris Collins, on or about the night of June 22, 2017, Cameron Collins provided the Drug Trial results to at least the following three sets of individuals so that they could trade in advance of the Public Announcement: (1) his fiancée, Individual-1; (2) Zarsky and Zarsky’s wife, Individual-2; and (3) Cameron Collins’s friend, Individual-6. Collectively, these individuals avoided approximately $186,620 in losses as a result of their trading on inside information.
On or about the morning of June 23, 2017, Zarsky provided the negative Drug Trial results that he had learned from Cameron Collins and Individual-1 to at least the following individuals, among others, or otherwise caused them to trade or attempt to trade in advance of the Public Announcement: (1) his brother, Individual-3; (2) his sister, Individual-4; and (3) his longstanding friend, Individual-5. Collectively, these individuals avoided approximately $10,900 in losses as a result of their trading on inside information.
False Statements to the FBI
On or about April 25, 2018, Special Agents from the FBI separately interviewed CHRISTOPHER COLLINS, Cameron Collins, and Zarsky. During these interviews, and as detailed in the Superseding Indictment, CHRISTOPHER COLLINS, Cameron Collins, and Zarsky made false statements to the FBI to cover up their participation in the insider trading scheme.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Scott Hartman, Max Nicholas, and Damian Williams are in charge of the prosecution.
The charges against Cameron Collins and Stephen Zarsky are merely accusations, and they are deemed innocent unless and until proven guilty.
As for the defendants who have not pled guilty, the description of the charges set forth herein constitute only allegations.
WASHINGTON, D.C. – Congressman Chris Collins (NY-27) is pushing the National Suicide Hotline Designation Act (H.R. 4194), bipartisan legislation which designates “9-8-8” as the universal telephone number for the national suicide prevention and mental health crisis hotline system.
This system currently operates through the National Suicide Prevention Lifeline and the Veteran’s Crisis Line. Congressman Collins is an original co-sponsor of the legislation in the House.
“When experiencing an emergency, everyone knows to dial 9-1-1, but now those dealing with a mental health crisis will have an easy to remember number that will provide them with the help they need,” said Congressman Collins. “This legislation is crucial in saving the lives of Americans all over the United States and end the stigma surrounding mental health.”
This legislation authorizes states to collect a fee limited to supporting local crisis centers that are affiliated within the national network area that funds the suicide hotline services similar to that of existing emergency services. Also this legislation will set a deadline of one year for the FCC to complete the nationwide upgrade to ensure all lines have access to 9-8-8.
GRAND ISLAND – After meeting with leadership of the area’s Customs Border Protection (CBP), Congressman Chris Collins (R-Clarence) declared his opposition to the Lake Erie Off-Shore Wind Project.
During a briefing and tour at CBP headquarters, Collins learned that the project could interfere with the CBP radar system used to detect vessels crossing the U.S. border from Canada.
The Off-Shore Wind Project is a part of New York Governor Andrew Cuomo’s mandate to produce 9,000 megawatts of renewable energy. In the proposed plan, Diamond Wind, a subsidiary of Mitsubishi, would place wind turbines several miles off shore Lake Erie going from the Town of Evans to the Pennsylvania line.
“Here is another example of Governor Cuomo putting his agenda before the safety of the people who live in Western New York,” said Congressman Collins. “Customs Border Protection uses this radar system to keep hard to spot foreign entities out of the U.S. and protecting our community. I cannot allow my constituents to be exposed to this dangerous risk.”
Collins indicated that he would introduce federal legislation that will prohibit these turbines from interfering with the nation’s border security.
“Unfortunately, many see projects like this as easy answers to sustainable renewable energy without looking at the real costs,” added Collins. “In this case, the costs are too great when considering keeping our lakeshore border secure.”
The wind project is currently still in the planning phase and there has not been a formal application submitted with the State. However, with Governor Cuomo’s aggressive “New Green Deal” agenda, this project can begin moving forward. Collins joins Erie County officials, Town of Evans officials and local residents who oppose the project.
Photo by Tom Rivers: The railroad tracks are shown in Murray near Hindsburg Road in this photo from early November 2016.
Press Release, Congressman Chris Collins
WASHINGTON, DC – Congressman Chris Collins announced today that the Northern Border Regional Commission’s State & Infrastructure Investment Grant has allocated $480,000 to the Orleans Economic Development Agency.
This grant will provide funding for engineering work and construction improvements to nine railroad bridges and culverts on the Falls Road Railroad in Orleans and Niagara counties. This grant will help and retain 225+ jobs in the surrounding region.
“This grant will help make rail more efficient for those who use our railways in Western New York,” said Congressman Collins. “Supporting local governments with the cost of maintaining, repairing and building critical infrastructure is an appropriate use of federal tax dollars.”
The Congressman’s office remains available to assist any local government pursuing a federal grant.
(Editor’s note: The Falls Road Railroad, which goes from Lockport to Brockport, is owned by Genesee Valley Transportation in Batavia.)
WASHINGTON, D.C. – Congressman Chris Collins (NY-27) introduced legislation which provides a financial solution for uninsured Americans seeking medical procedures by hospitals.
The Protect the Uninsured Act of 2019 would amend Title XI of the Social Security Act to require hospitals and critical access hospitals to offer the uninsured individual access to the lowest negotiated price for any service or procedure.
“Hospitals are supposed to take care everyone, the uninsured are often saddled with debt far beyond what they can pay while others are receiving steep discounts for the same procedures,” said Congressman Collins. “People are putting their health at risk by avoiding important procedures due to inflated costs while hospitals are writing off uncollected debts as charity work.”
Hospitals negotiate discounts with insurance companies to determine costs of procedures or services they are willing to accept. This negotiated discount is subtracted from an inflated total cost of a procedure or service. The individual then pays a copay while the insurance company covers the remaining expenses.
Under current law, an uninsured patient is forced to cover the full cost of the procedure with no discounts, leading to uninsured patients mounting debt or avoiding necessary care. This legislation will provide financial relief to those who are uninsured by allowing the individual to receive the lowest discount negotiated with an insurance company for a procedure or service by a hospital.
Photo by Tom Rivers: A firefighter is on the roof of a house on Park Avenue in Medina today.
WASHINGTON, D.C. – Congressman Chris Collins (NY-27) applauds $2.5 million in funding for the Firefighter Cancer Registry Act included in the FY20 Labor, Health, Human Services, Education, and Related Agencies Appropriations bill.
“Eighteen years ago, we witnessed a horrible tragedy, yet we also witnessed the heroic actions of America’s brave first responders who went running towards the destruction while many were running away from it,” said Congressman Collins. “The Firefighter Cancer Registry is the first step in addressing the increased rate of cancer among firefighters due to the hazardous conditions when fighting fires. I applaud the Committee on Appropriations for recognizing how important this funding is to our first responders.”
The House Appropriations Committee originally appropriated $1.6 million in funding for the Firefighter Cancer Registry. Congressman Collins and Congressman Pascrell introduced an amendment providing an additional $900,000 to fully fund the authorized amount of $2.5 million. The amendment passed the House of Representatives by a vote of 413-10.
“It is essential that the registry receives full funding and be implemented to find links between fighting fires and the increased risk of cancer. I am proud to continue working with Representative Pascrell in introducing this amendment during the appropriations debate to protect these brave men and women who risk their lives every day,” added Collins.
The Firefighter Cancer Registry will improve collection capabilities and activities to address the enormous gap in research on the health impacts of cancer incidence among firefighters – career and volunteer. Firefighters may experience detrimental health effects due to smoke inhalation and other harmful, toxic substances. Funding for this registry is crucial to take the first steps towards gathering this information to develop new protocols, safeguards, and equipment to protect these men and women.
WASHINGTON, D.C. – Congressman Chris Collins (NY-27) and Congressman Peter King (NY-2) reintroduced the Renovate and Enhance Veterans’ Meeting Halls and Posts (REVAMP) Act. This legislation will grant organizations access to federal funding for maintenance and improvements to veteran halls and posts.
“American Legions and VFW Posts provide a place where veterans can come together to share their stories, get help with VA claims, and get involved in the community,” said Congressman Collins. “I would like to thank Congressman Peter King for once again joining me in introducing this vital legislation that ensures our veterans have the resources they need to maintain and improve their facilities.”
“Veterans organizations like the VFW and American Legion continually provide and open their facilities to our communities,” said Congressman King. “It is only fair that we provide them with the opportunity to upgrade and repair these facilities to ensure continued use.”
The REVAMP Act allows organizations who are classified by the IRS as 501(c)(19) non-profit organizations and comprised primarily of past or present members of the U.S. Armed Forces and their family members to be eligible for funding through Community Development Block Grants (CDBG). This legislation uses existing CDBG funding to make veteran organizations eligible for that particular funding and does not add to the deficit
WASHINGTON, D.C. – Today, Congressman Chris Collins (NY-27) introduced legislation that would provide a short-term, one time fix, to help the non-seasonal agriculture workforce. The Helping Labor Personnel (HELP) Farms Act provides a solution for farmers across the nation, especially in the dairy industry, while Congress and the Department of Labor continues to modernize the H-2A program and allow visas be granted on an annual basis instead of seasonal.
“Under current law, the H-2A visa program does not help our struggling dairy farms, who live in constant fear of losing their workforce,” said Congressman Collins. “This legislation provides a temporary solution while Congress and the Department of Labor work together to find a bipartisan solution.”
This legislation requires the Secretary of Homeland Security, in conjunction with the Secretary of State and Secretary of Labor, to collect applications for temporary work authorization for non-seasonal agriculture workers. This non-seasonal agriculture workforce must be sponsored by a United States employer who he/she has worked with for at least two years. Upon approval of the application, the alien worker will be granted work authorization for two years along with his/her spouse and children. Additionally, protections are included for the sponsoring employer to ensure there are no consequences for employing an alien workforce due to an outdated and flawed H-2A visa program.
“There is not a single person representing dairy that does not understand we have a true crisis with the current system we have in place,” added Collins.
An alien worker who currently works in a non-seasonal agriculture occupation may be permitted to apply to this temporary work authorization program so long as they have not been convicted on felony charges of rape, kidnapping violent assault, sexual assault, or suspected of terrorism. Alien workers who are currently being detained may also be given the opportunity to apply for this program.
