New York GOP Rep. Chris Collins has resigned his seat effective Monday, according to a Republican source, one day ahead of an expected guilty plea to federal insider trading charges.
The 69-year-old Collins, one of the first GOP lawmakers to back President Donald Trump before the 2016 election, is scheduled to make an appearance in federal court Tuesday in Manhattan. Collins will plead guilty to insider trading charges related to his investment in an Australian biotech firm, according to court documents and GOP sources.
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Cameron Collins, the congressman’s son, and another defendant, Stephen Zarsky, are also expected to plead guilty later this week, one GOP source said.
Neither Collins’ office nor his lead attorney responded to requests for comment at press time.
Collins’ upstate New York district is overwhelmingly Republican and there is little doubt the GOP can keep control of that seat following his resignation.
Collins, who was able to win reelection last fall despite being under indictment, was charged in August 2018 with securities fraud, wire fraud and making false statements to FBI agents investigating the case.
Collins was the largest investor and a member of the board of directors for Innate Immunotherapeutics, an Australian biotech company. He was charged with passing inside information on the company to his son and Zarsky, father of Cameron Collins’ fiancee. Using that information, Cameron Collins and Zarsky were able to avoid hundreds of thousands of dollars in losses after a drug trial failed, authorities say.
At that time, the Securities and Exchange Commission settled with Lauren Zarsky, Cameron Collins’ fiancee, and her mother, Dorothy Zarsky, over allegations of insider trading. The pair neither admitted nor denied, but they agreed to give up “ill-gotten gains” and pay fines, the SEC said.
Collins was a successful business executive who first ran for Congress in 1998 but lost. In 2006, he was elected Erie County executive despite the heavy Democratic slant to the county. Collins helped remake the county government, including dramatically slashing debt. Collins considered a run for New York governor in 2010, yet then backed off. Collins then won a seat in Congress in 2012.
Collins originally supported former Florida Gov. Jeb Bush during the 2016 presidential campaign, but threw his support to Trump after Bush’s campaign stalled out. Collins was the first House Republican to back Trump.
“We need a chief executive, not a chief politician,” Collins told CNN in Feb. 2016. “Donald Trump is the individual as president that can lead this country and reclaim our great state and provide a bright future for our children.”
Following Trump’s victory, Collins’ national profile soared, and he became an unofficial Trump spokesmen and chief defender on Capitol Hill. Other GOP lawmakers used him as a conduit to contact the new president. And before Paul Ryan was reelected speaker in 2016, he asked Collins to second his nomination.
In 2016, Collins — who had made tens of millions of dollars during his business career — became the biggest investor in Innate Immunotherapeutics, which was developing a potential treatment for multiple sclerosis. His son and daughter were also major stockholders.
Collins pitched the stock to everyone he could, including fellow members of Congress and former Health and Human Services Secretary Tom Price. He was even overheard by reporters in Jan. 2017 bragging on the phone “Do you know how many millionaires I’ve made?” But Innate’s stock price collapsed in June 2017 after the MS drug trial failed.
Collins allegedly told his son about the drug trial results months earlier, allowing the younger Collins, Zarsky and other family members to dump their shares before the news became public, prosecutors later charged. Collins himself did not sell his shares.
The FBI and SEC, however, began looking into the case, including interviewing Collins and his family. The lawmaker denied sharing any inside information.
Collins and the others were indicted in Aug. 2018. Collins stepped down from his seat on the Energy and Commerce Committee, but he didn’t resign from office. GOP leaders didn’t pressure him to leave either. While Collins initially said he wouldn’t run for reelection, he later changed his mind and put $500,000 of his own money into the campaign. Collins won reelection by one point in the heavily Republican district.