Cameron Collins deserves a prison sentence of at least 37 months, prosecutors said in a scathing letter to the federal judge who on Friday sentenced his father, former Rep. Chris Collins, to 26 months in prison on insider trading charges.
"By exploiting his father’s breach of trust for his own pecuniary benefit, Cameron committed a serious crime that itself warrants a substantial term of incarceration," Geoffrey S. Berman, U.S. attorney for the Southern District of New York, and his assistants said in the letter.
The letter, published on the case's online docket late Thursday night, includes a damning timeline that aims to show that Cameron Collins and his father coordinated not only a series of insider stock trades, but also an effort to cover them up.
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That narrative seems to shatter the Collins defense team argument that the then-congressman committed a one-off crime when he shared insider information with his son via a cellphone call from the White House lawn on June 22, 2017. It also portrays Cameron Collins' conduct as a series of criminal offenses.
"Far from recognizing the wrongfulness of his criminal conduct, Cameron doubled down on it when he sought purposely to mislead investigators," the prosecutors wrote. "Justice demands that he be punished accordingly."
Prosecutors said Cameron Collins, 27, deserves a prison sentence within the range set for his offenses under federal sentencing guidelines. That would be a sentence of between 37 and 46 months.
That's a substantially stiffer sentence than the one the U.S. Probation Office recommended, which was six months in prison. Cameron Collins' lawyers, citing his long history of good works aside from his criminal conduct, argued that their client should be put on probation.
Cameron Collins will be sentenced Thursday. His future father-in-law, Stephen Zarsky, will be sentenced a day later. Both men pleaded guilty Oct. 1 to conspiracy to commit securities fraud.
According to the prosecutors' letter, Chris Collins ignited not one, but a series of illegal acts when he called his son with secret bad news about Innate Immunotherapeutics, an Australian biotech firm in which both had heavily invested.
The first illegal act, they said, came when Chris Collins – then a Republican congressman from Clarence – passed on a stock tip that he knew only because he was an Innate board member.
The second illegal act came later that night of June 22, 2017, when Cameron shared that illegal stock tip with his girlfriend, Lauren Zarsky, and her parents, Stephen and Dorothy Zarsky.
And the next several illegal acts spilled out over the next several days, as the Zarskys dumped their stock and Cameron did the same, bit by bit, in close coordination with his father.
"Cameron, Lauren, Stephen, and Dorothy agreed that they would sell their shares in Innate, and that Cameron would space out his selling activity in order to avoid depressing the price of the stock before Lauren, Stephen, and Dorothy sold their shares," prosecutors wrote.
Cameron Collins then spaced out his trades over Friday, June 23, usually just after speaking with his father – and on one occasion, while he was on the line with the then-congressman, the letter said.
"Throughout the remainder of the afternoon, Cameron worked to sell his Innate stock in chunks, in some cases modifying the limit price, apparently in an effort to ensure that he sold as much of the stock as possible, at the highest price possible, without depressing the market," prosecutors wrote.
Then on Monday, June 26, Cameron tipped off a friend about Innate's inside information and continued dumping his own Innate shares in chunks, again in coordination with his father.
Hours later, the company announced that its only product, an experimental multiple sclerosis drug, had failed in clinical trials. And the next day, Innate's stock price fell 92%.
On that day, June 27, Cameron Collins and his father began work on a cover-up, prosecutors said. The Buffalo News had noticed an unusually high volume of trades in Innate stock and had already noted that investors and others in Australia and the U.S. were questioning whether inside trading had occurred.
That being the case, Cameron sold the rest of his shares on that June 27. Prosecutors said he apparently did that so that his father could release a misleading statement to The Buffalo News that said his son “liquidated all his shares (in Innate) after the stock halt was lifted, suffering a substantial financial loss.”
The cover-up continued when the congressman, his son and Zarsky coordinated on the cover story they told the FBI the following February: that Cameron and the Zarskys sold his shares because he was nervous about that pending company announcement that Innate said it was about to make on June 26.
In the end, Cameron Collins saved himself about $570,000 through his illegal trades. Between that and the attempted cover-up, he deserves to be severely punished, prosecutors said.
"Cameron’s trading for his own account dwarfs the other illegal trading in this case by a factor of three to one," they wrote. "Put simply, this was an offense motivated by greed, and any effort to suggest otherwise is a distortion of the facts."
