NEW YORK – U.S. District Court Judge Vernon S. Broderick on Thursday faced the son of former Rep. Chris Collins in his Manhattan courtroom, and prepared to hand down a sentence in the insider trading scheme hatched by the former Congressman that ensnared the son.
In making the decision to put Cameron Collins on probation and not behind bars, the judge found a precedent not in a law book, but in a much older book.
"I decline to adhere to the idiom that the sins of the father are visited upon the son," Broderick said, paraphrasing a passage from the Book of Exodus in the Bible as he sentenced Cameron Collins to five years of probation – including six months of home confinement – for conspiracy to commit securities fraud. Cameron Collins will also have to pay a $150,000 fine and do 500 hours of community service.
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That's a considerably milder sentence than what's recommended under federal sentencing guidelines, which say Cameron Collins should spend 37 to 46 months behind bars. Prosecutors said Cameron Collins deserved "a substantial term of confinement," although less than the 26-month sentence the judge gave the elder Collins last week.
Instead, the judge gave Cameron Collins the sentence his lawyers suggested.
"I hope you realize this is a tremendous break," the judge told him.
The sentence came at the end of a long and dramatic hearing that focused largely on the sins of the father: giving his son an inside stock tip and telling him to trade on it, then lying to the FBI about it all.
All the parties in the case – from the judge to the prosecutors to the defense lawyers to Collins' own son – pinned the crime on the man who launched it. Chris Collins pleaded guilty and resigned from Congress Oct. 1 after 13 months of proclaiming his innocence, and his son pleaded guilty the same week.
Most dramatically of all on Thursday, Cameron Collins acknowledged that the father who was his hero had, in essence, talked him into committing a federal felony.
Noting that his investment in Innate Immunotherapeutics, an Australian biotechnology company, came from his father, Cameron Collins said he unthinkingly agreed he should try to dump his Innate shares based on the inside information his dad gave him in a phone call.
"I didn't view this as my money and I didn't think I should make any financial decisions without his approval," Cameron Collins told the judge. "He always seemed to do the right thing."
Moments later, the younger Collins acknowledged that when his father suggested that he start selling his Innate shares, he should have said no.
"I screwed up royally," he said.
Cameron Collins said his actions stemmed, in part, from the fact when his father called him on June 22, 2017, he didn't sound like himself. He didn't sound like the brash businessman turned Erie County executive turned congressman turned outspoken defender of President Trump.
"My father sounded broken," Cameron Collins said.
That's because moments earlier, the elder Collins had gotten an email from the CEO of Innate, a company where Collins sat on the board. The email said Innate's only product, a multiple sclerosis drug, had failed in clinical trials.
That meant Innate stock – which Rep. Collins had bought for his son and peddled to his congressional colleagues and business associates -- would be nearly worthless as soon as the news became public.
On that six-minute phone call from a congressman on the White House lawn to his son who was drinking in a New Jersey bar, "we decided I should sell some of my shares," Cameron Collins said.
"In my misguided state, I thought if I avoided losses, it might offer my father some relief," he added.
Then, he said, he started thinking about his girlfriend, Lauren Zarsky, and her parents, Stephen and Dorothy Zarsky. Cameron had talked them into investing in Innate, too.
So he told the Zarskys the inside information, and agreed to let them start dumping their Innate stock that night before he started selling the next morning.
As a result, the Securities and Exchange Commission hit Lauren and Dorothy Zarsky with a civil lawsuit and federal authorities arrested Stephen Zarsky, who dumped far more shares than his daughter or wife.
Making matters worse, Cameron Collins – like his father and the Zarskys – then lied about what happened when FBI agents questioned him in April 2018.
"I should have made different choices," starting on the night in June 2017, Cameron Collins said.
"I wish I had hung up the phone," he said.
As Cameron Collins said all this, his voice on the edge of cracking with emotion, Broderick listened intently – and then made clear that he didn't see the young man as the true villain of the story.
"There's no question that on June 22, your actions weren't isolated – and were illegal," the judge said. "But I do also realize that none of this would have happened if not for your decision to pick up the phone."
Broderick then revisited Chris Collins' motives in making that call. Noting that the elder Collins, then a Republican lawmaker from Clarence, tried calling his son several times before finally connecting with him, the judge said it wasn't Chris Collins' anguished emotional state that prompted those calls.
Instead, Chris Collins called his son with a clear-minded motive, which Broderick described as "sharing inside information so you could act on it."
While agreeing that Chris Collins instigated the stock-dumping scheme, prosecutors insisted that his son deserved prison time.
"He certainly was capable of making his own decision about the information his father gave him," said Assistant U.S. Attorney Scott A. Hartman.
But Cameron Collins did not do that. Instead he listened to his father and thereby committed a felony. Then he helped his future father in law – Stephen Zarsky, who will be sentenced Friday – commit one, too.
Cameron Collins' lawyer, Thomas A. Hanusik, offered a succinct description of his client's behavior.
"Very smart people do very dumb things all the time," Hanusik said.
"I agree," the judge replied.
