NEW YORK – Former Rep. Chris Collins is set to report to prison on St. Patrick's Day for up to 26 months – but it could have been much worse.
A 2005 Supreme Court ruling limited his sentence, and 2018 legislation that Collins supported may end up trimming it. A legal maneuver by Collins' defense team meant that his role with the Boy Scouts may have influenced the sentence more than a congressional ethics probe. And the violation he committed, insider trading, doesn't always meet strict punishment in America.
For those reasons and others, Collins critics and legal experts temper their criticism of the sentence issued by U.S. District Court Judge Vernon S. Broderick.
"There was definitely a thought that he might get more prison time," said Andrea Nikischer, one of the leading members of a citizens group called Citizens Against Collins. "But there is also some recognition that a level of justice was served, and justice is always a good thing."
But that level of justice left Ari Gabinet, former head of the Securities and Exchange Commission's Philadelphia office, thinking the sentence didn't quite fit the crime.
Asked about Collins, Gabinet replied: "He's a lucky guy."
Collins' first lucky break came in 2005, the year the wealthy businessman started pouring money into the company that came to be called Innate Immunotherapeutics.
That year the Supreme Court struck down the federal government's sentencing guidelines. If those guidelines remained mandatory, the judge would have had to sentence Collins to 46 to 57 months.
Now that those guidelines are advisory, Broderick was free to reach what Cheryl Bader, a professor of law at Fordham University, called "a compromise sentence" – less than the maximum prosecutors sought, but more than the 366-days the U.S. Probation Office recommended.
"I think the judge was aware of the extreme steep fall from grace that Chris Collins took here," said Bader, a former U.S. attorney in New Jersey. "Here's a man who seemingly had everything – wealth, power, status, family – and now that's all been ruined. So the extra months in prison were probably just one layer of the punishment for Collins."
The four-term Republican lawmaker from Clarence earned his punishment by sharing an inside stock tip – that Innate's only product had failed in clinical trials – with his son, Cameron. Collins then helped his son dump his Innate stock and develop a fake cover story to share with the FBI.
Collins resigned from Congress and pleaded guilty to conspiracy to commit securities fraud and making false statements on Oct. 1. His son and his future father-in-law, Stephen Zarsky, pleaded guilty to the conspiracy charge, too, and will be sentenced later this week.
In limiting the sentence to 26 months, Broderick created the possibility that Collins, 69, could spend less than two years in prison.
That's because of a 2018 law called the First Step Act. Under that law, older inmates may be eligible to be released after serving two-thirds of their sentence, which in Collins' case would be about 17 months.
In issuing the sentence, Broderick also had to consider other factors, such as Collins' long life of following the law and the unlikelihood that he will commit another crime, said Carl Tobias, a law professor at the University of Richmond.
"It seems like a fair sentence to me, all things considered," Tobias said.
The Boy Scouts rated 19 mentions at Friday's sentencing hearing while the Office of Congressional Ethics' probe of Collins rated none.
There are reasons for that. Collins loves the scouts and served the organization in many capacities, so his lawyers called that a sign of his good character. Moreover, the Collins' legal team's maneuvering excluded that ethics report from the court record.
All of that contributed to a sentence that left Craig Holman, who sent that ethics office the first complaint it received about Collins, disappointed.
"I'm not delighted to see anyone go to prison," said Holman, government affairs lobbyist for the left-leaning Public Citizen. "But in this particular case, where the violation was so deliberate, coordinated and then covered up, the maximum would have been appropriate."
The maximum might have been more likely, too, if the judge had before him the 2017 Office of Congressional Ethics report on Collins. That report said that Collins probably violated House rules by advocating for Innate before the National Institutes of Health – and probably broke the law by giving possible investors inside information before Innate issued new stock.
Prosecutors mentioned that in their original August 2018 indictment, but dropped that mention in their superseding indictment a year later for one reason. Collins' lawyers argued that any mention of the congressional ethics report would violate the Constitution's "Speech or Debate" clause, which aims to protect Congress from unjust intrusions from the judiciary.
A legal battle over that question threatened to delay the Collins case, forcing prosecutors to trim the indictment to speed things along, Geoffrey S. Berman, U.S. attorney for the Southern District of New York, said in a letter to the judge.
But it also meant Broderick could not consider Collins' relationship with Innate in its entirety.
The Collins lawyers didn't get everything they wanted, though. They argued that the only punishment Collins deserved was community service and confinement at his waterfront home in Marco Island, Fla.
That thought appalled Michelle Schoeneman, the co-founder of Citizens Against Collins.
"I wish he would have gotten more time, but I'm happy he didn't get house arrest," she said. "So I guess it's a nice balance."
An unusual crime
Chris Collins is an admitted inside trader who did so while serving as a member of Congress – a combination never before seen in American history.
That's why Anthony J. Ogorek, a Williamsville financial planner who spotted possible insider trading at Innate the week it happened, found the Collins sentence disappointing.
When an investor trades based on inside information, "it's really a direct attack on our markets," Ogorek said.
That's because it undermines the faith investors ought to have that the system is fair, he said. What's more, the nearly $800,000 that the inside traders in the Collins case saved is $800,000 other Innate investors lost and will never get back, Ogorek added.
But Collins didn't just betray the American economic system and Innate's other investors, Ogorek said. Both he and John Britt, who spent more than 30 years as a lawyer at the SEC, said Collins betrayed the voters of New York's 27th congressional district, too.
"He had a sworn oath as a congressman, not just as an Eagle Scout," noted Britt, who said of the sentence: "He got off light."
Then again, insider trading has produced a wide range of sentences.
While Collins will go to prison for up to 26 months even though he never dumped any stock himself, lifestyle guru Martha Stewart served five months in prison after trading on inside information in the early 2000s.
Cecily Molak of Menden, a retired lawyer and the first citizen to file a congressional ethics complaint about Collins, cited the Stewart case in delivering a mixed verdict on the Collins sentence.
"We think it should have been longer," Molak said. "But I guess that for a crime that we don't punish heavily in this country, it was a good sentence."