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Legal experts: New indictment in Chris Collins case a 'tactical move' to avoid delays

When federal prosecutors brought new charges against Rep. Chris Collins this week, it was the allegations they left out of the indictment that told the real story.

Eager to avoid more delays in the insider trading case, prosecutors removed any references to conduct that might be considered privileged under the speech and debate clause of the Constitution.

The government's goal is to eliminate part of Collins' legal defense and make it difficult for him to delay a trial now set for Feb. 3 of next year.

"This is just a clever Texas two-step," said defense attorney Barry N. Covert. "This is not a sign of weakness by the government. This is simply a technical move to ensure there is no delay in the trial."

Covert, who is not involved in the case, said the superseding indictment filed Tuesday is similar to the previous indictment against Collins, except for those charges tied to conduct he considered protected by the Constitution.

The speech and debate clause, intended to protect the independence and integrity of Congress, provides certain protections to members of Congress facing prosecution or others actions by the executive branch.

Collins made it clear he intended to rely on the clause as part of his defense, a tactic that could have included lengthy hearings and an even longer appeal.

"This does not mean the government's case is weaker," said defense attorney Thomas J. Eoannou. "This is a tactical move by the prosecution to bring this case to an early resolution."

Eoannou said the government's actions amount to a "trimming of the indictment" and indicated it should not significantly delay the trial, if at all.

"It will depend on the judge," he said, referring to U.S. District Judge Vernon S. Broderick.

The new indictment came almost exactly a year after the previous indictment charged Collins; his son, Cameron Collins; and Stephen Zarsky, Cameron Collins' prospective father-in-law; with taking part in an insider stock trading scheme involving an Australian biotech company called Innate Immunotherapeutics.

All three men are charged with conspiracy, fraud and lying to federal authorities. Collins and the other defendants have maintained their innocence.

By eliminating certain aspects of the old indictment, the government is sacrificing evidence. But prosecutors made it clear they will still seek to use some of that evidence at trial.

"Indeed, the government presently anticipates offering, among other things, the testimony of congressional staffers regarding an alleged misleading press statement and conversations they had with Congressman Collins about trading in Innate," U.S. Attorney Geoffrey S. Berman said in a letter to the court.

[Read: Letter from U.S. Attorney explaining superseding indictment]

Defense attorney John E. Rogowski, a former federal prosecutor, said he would be shocked if any of the evidence in question proved vital to the government's case.

"I don't think they would have done this if it meant sacrificing crucial evidence," he said. "They simply want to try this as soon as possible. Anything that would have delayed the trial would have been a win for the defense."

At the core of the government's case is the allegation that Collins, an Innate board member, received an email with critical information about the company in June of 2017. Prosecutors laid out what they said happened next in court documents:

"I have bad news to report," the email from Innate's CEO began.

Prosecutors claim Collins was told that Innate's sole product had failed in clinical trials and that the company's stock would soon plummet. Innate was testing an experimental treatment for secondary progressive multiple sclerosis.

After reading the email, Collins, who was attending a White House picnic for members of Congress, wrote back, "Wow. Makes no sense. How are these results even possible???"

After getting the email, Collins called his son, who began dumping his shares of Innate the following day, saving himself $570,900 in losses, according to prosecutors.

They claim Cameron Collins also told Zarsky about the failed clinical tests and that Zarsky was able to avoid $143,900 in losses.

Unlike his son, Chris Collins could not dump his shares. His Innate shares were held in Australia and were already subject to a trading ban.

Prosecutors claim Zarsky also passed on the bad news to people he knew had shares of Innate, and some of those conversations are also detailed in the indictment.

In one text conversation, Zarsky laments the fact that two people he knew, a husband and wife, did not dump their shares.

"(They) didn't get out but they are not complaining," Zarsky said, according to the indictment.

"Strange that they didn't," the other individual answers. "Such is life."

In assessing the government's strategy, Covert said there was one aspect of the new indictment that surprised him – the letter from Berman.

Even though superseding indictments are common in criminal cases, he has never seen an accompanying letter from the prosecution.

"That letter wasn't meant for the judge," he said. "That letter was meant for the public."

Berman, according to Covert, wants the public to understand that its case against Collins is still as strong as it was a year ago.

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