Former GOP Rep. Chris Collins on Tuesday pleaded guilty to charges related to insider trading, hours after he resigned his New York congressional seat.
Collins, who was the first member of Congress to endorse Donald Trump for president in 2016, was indicted in August by the U.S. attorney's office in Manhattan. He was accused of using non-public information stemming from his relationship with an Australian medical biotech firm to help his family make illegal stock trades to avoid more than $768,000 in losses. He initially pleaded not guilty after he was first charged in 2018.
Collins, 69, on Tuesday, pleaded guilty to conspiracy to commit securities fraud and making false statements. He faces up to five years in prison on each count along with three years of supervised release. He also faces $250,000 in fines on each count. He is slated to be sentenced in January 2020.
Collins told the courtroom that after he learned about the failure of a drug trial from the company's CEO, he called his son to alert him. He told him he could trade the shares he had to avoid a substantial loss.
"Ten months later the FBI knocked on my door, I falsely denied I told my son Cameron about the stock. I knew it was illegal and improper," Collins said in court. "I regret my actions, I'm sorry for the devastation I caused my wife and family. It's something I will never live down. I’ve let my friends down, my constituents. The actions I took are anything but a model citizen would take."
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He added, "I am dismayed and embarrassed. I am sorry with regret and must own up to my actions."
Geoffrey Berman, a prosecutor in the Manhattan U.S. attorney's office, excoriated Collins after he entered his guilty plea.
"Collins covered up his insider trading scheme of illegally tipping off his son from the White House lawn as if the law doesn't apply to him," he told reporters. "No one is above the law. He is now a convicted felon and no longer a member of Congress."
His son Cameron Collins, as well as Stephen Zarsky, the father of Cameron Collins' fiancée, were also charged with insider trading. The men were also charged with lying to the FBI in interviews to cover up the alleged scheme.
Collins on Monday sent a letter of resignation to House Speaker Nancy Pelosi. His resignation became official on Tuesday after the letter was read on the House floor.
Collins represented New York's 27th congressional seat — a suburban district that includes parts of Buffalo. Trump won the district by 24 points in 2016 and the seat has been generally viewed as a safe seat for the GOP in the otherwise blue state. The Cook Political Report rated the district as “solid Republican” on Monday, suggesting that the scandal has not hampered the GOP's grip on the area. Under New York State law, Gov. Andrew Cuomo, a Democrat, has the authority to set a date for a special election to fill the seat.
Collins served on the board of Innate Immunotherapeutics, a small Australian pharmaceutical company, for three years until 2017 and was one of its biggest shareholders with a nearly 17 percent ownership stake.
Prosecutors alleged that Collins passed along the yet undisclosed results of a drug trial intended to treat an advanced form of multiple sclerosis to his son in June 2017. He intended for Cameron Collins to "use that information to make timely trades in Innate stock and tip others," according to prosecutors. When the news of the failed drug trial was made public the stock value fell 92 percent.
Collins was on the lawn of the White House attending a congressional picnic in June 2017 when Innate's chief executive sent an email to the board of directors reporting that the trial was a bust, according to the indictment.
Then, within six minutes of getting the results, the lawmaker hastily tried to reach his son, who owned more than 2 percent of Innate stock. His son then passed the information from his father to Zarsky and other unnamed co-conspirators, who all engaged in "timely trades" of the stock, prosecutors said.