A Fairfield County resident was among four men sentenced for an elaborate insider trading scheme that net a Manhattan hedge fund millions of dollars in profit.
For five years, 42-year-old David Blaszczak, a political intelligence consultant from Isle of Palms, South Carolina, was able to obtain confidential, non-public information from members of Centers for Medicine and Medicaid Services - including Christopher Worrall, 40, of Linthicum Heights, Maryland, who was a government employee there, according to Robert Khuzami, the Attorney for the Southern District of New York.
Blaszczak then proceeded to pass that information to 56-year-old Theodore Huber of Westport and 47-year-old Robert Olan of Rumson, New Jersey, who were partners and analysts at Deerfield Management Company, a healthcare-focused hedge fund in Manhattan, Khuzami said. The hedge fund partners then used that information to make insider trades, netting a total of more than $7 million in profits.
At all relevant times during the scheme, Blaszczak served as a consultant for a number of Washington, D.C.-based firms that, in exchange for a fee, provided “political intelligence,” which included analysis about how changes in government reimbursement rates would impact publicly traded healthcare-related companies.
Following a four-week jury trial, Blaszczak was found guilty on 10 counts that include conversion of government property, wire fraud, securities fraud, conspiracy to convert government property and to defraud the United States and conversion of government property.
Each of the four was found guilty of wire fraud and conversion of government property. Other charges levied about the schemers include conspiracy to commit securities fraud and conspiracy to commit wire, securities fraud and other charges.
Huber and Olan were both sentenced to two years of supervised release, and ordered to forfeit $87,078, pay restitution to CMS in the amount of $1,644.26, and pay a fine of $1.25 million.
Blaszczak was sentenced to two years of supervised release, including one year of home confinement, and ordered to forfeit $727,500 and pay restitution to CMS in the amount of $1,644.26.
Worrall was sentenced to one year of supervised release, and ordered to pay restitution to CMS in the amount of $1,644.26.
Robert Khuzami, the Deputy Attorney for the United States said that “nothing about this scheme was intelligent.”
“Blaszczak, Worrall, Huber, and Olan conspired to steal highly sensitive and confidential government information and profit from that theft," he said. "This scheme was carried out through Blaszczak’s purported ‘political intelligence’ firm, but nothing about this scheme was intelligent. When you steal confidential information from the Government and use it to make illicit millions in the stock market, you will get caught.”
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