NEW YORK – Former U.S. Rep. Steve Buyer of Indiana was sentenced Tuesday to 22 months in prison for his conviction on charges of insider trading.
After sentencing in New York was postponed for over a month due to a conflict-of-interest issue with his lawyers, U.S. District Judge Richard Berman rejected a defense bid to spare Buyer incarceration. In addition to the prison term, he sentenced the Republican to three years of supervised release and imposed a $10,000 fine. He also ordered Buyer to forfeit his ill-gotten gains, $354,000. Buyer won’t be responsible for $17,000 of that because his former mistress and ex-wife are covering that amount after some of the stock purchases were made using their accounts.
Assistant U.S. Attorney Margaret Graham had asked the court to sentence Buyer to a 36-month prison term, noting that his crimes were not a “one-off” situation.
Prosecutors had argued in court documents that his public service exacerbated his liability and should not been seen as a mitigating factor.
“He knew that it was wrong and illegal to steal that information,” Graham said. “It wasn’t a momentary lapse or a fleeting mistake.”
Graham also emphasized that sparing Buyer’s incarceration would send the wrong message to the public since insider trading has “broad systemic ramifications” because it tends to create a lack of confidence in the financial system.
Sentencing guidelines, which Berman was required to consider but was not bound by, called for a prison sentence of 33 to 41 months. That included an enhancement based on the finding that Buyer had obstructed justice by lying on the witness stand.
Berman ultimately decided though to give Buyer less than a guideline sentence, noting his public service in the U.S. Army Reserves and in Congress.
In March, a federal jury convicted Buyer of four counts of securities fraud related to insider trading stock purchases that were based on non-public information he gleaned about upcoming transactions by two of his consulting company’s clients, T-Mobile and Guidehouse LLP.
After learning that T-Mobile was going to merge with Sprint in 2018, Buyer used four brokerage accounts to buy more than 112,000 shares of Sprint. The following year he learned Guidehouse was going to purchase Navigant Consulting and before the deal was publicly announced, he used six accounts to purchase more than 46,000 shares of Navigant.
Buyer used his own accounts and those of others, including his wife, his son, a cousin and a TV news investigative reporter with whom he had an affair. In all the accounts profited nearly $350,000 on the two deals.
The Security and Exchange Commission also filed a civil lawsuit against Buyer over the same transactions.
During the sentencing, Berman walked through the multiple purchases of stock that Buyer made regarding the two cases. He highlighted how in 2018 after learning that T-Mobile and Sprint were going to merge, Buyer purchased shares in Sprint, and how he did the same action the following year when he got wind that Guidehouse LLP was going to buy Navigant.
Buyer’s first-ever purchase of Sprint stock came on March 29, 2018, during an off day of a golf vacation with his friend and T-Mobile Vice President Tony Russo.
Buyer testified that he didn’t know about the planned merger until April 10 although Russo testified that he was certain it was before April 3.
The 64-year-old Bronze Star recipient told Berman Monday that he wanted to say more in advance of his sentencing but was holding back because he plans to appeal his conviction.
He said he’s lived a life of “good acts” and invited the judge to visit Indiana, where “we accept people at face value” and follow the honor system.
“It’s how I’ve lived my life,” he said.
He did thank the many friends, relatives, judges and generals who wrote letters about his benevolence seeking leniency on his behalf. He said it was strange reading them, like reading his own obituary.
Earlier, Buyer shook his head repeatedly as Berman cited the ex-congressman’s dishonesty on the stand and efforts to create documents to support his contention that he didn’t know about the merger deals when he purchased the stocks.
The defense had sought home confinement and community service but Berman ultimately rejected that, noting that the nature of the crime was too serious to warrant such a significant reduction in sentencing.
The judge found that Buyer’s testimony was “designed to conceal his crimes from the jury and avoid the consequences of his conduct.”
Berman noted that Buyer was “entitled to claim his innocence … but his behavior and direct and circumstantial evidence in the case screams guilty.”
Defense lawyer Henry Asbill said there would be significant collateral consequences if Buyer went to prison and tried to argue to the court that Buyer had already suffered enough.
Asbill said his client’s health has deteriorated, he’s been publicly shamed, his reputation tarnished and the loss of his consulting business will likely cost him $20 million over the next decade.
“We ask you to give him a chance at redemption through community service,” he said to the judge.
He asked that the judge recommend that Buyer be held at the federal prison camp in Morgantown, West Virginia, since that was near where Buyer’s brother lives. The defense noted that the camp would pose a lower risk of Buyer contracting COVID-19 for the third time because it was not at full capacity.
The judge said he would make that recommendation and gave Buyer until Nov. 28 to surrender at whichever facility the Bureau of Prisons selects.
The defense hopes to delay that with a planned motion seeking to have any incarceration put on hold pending Buyer’s appeal.
During the sentencing, it was noted that there was a disagreement in recent months over how much restitution Buyer would owe in regard to the legal fees incurred by T Mobile and Guidehouse.
Buyer’s defense tried to argue that the costs incurred were unreasonable and opposed paying for any cost related to their investigation leading up to Buyer’s indictment.
The defense noted that since the investigation occurred in parallel to the Security and Exchange Commission case, it should not be part of criminal restitution.
Berman acknowledged that restitution would be required but as of the sentencing, he was not ready to set the amount since both sides were so far apart in regards to how much Buyer owed.
The defense believed that the amount should be about $217,000, but the prosecution argued that the cost was closer to $1.4 million.
Also during the sentencing, the judge addressed the almost two-month delay in sentencing due to a potential conflict of interest with Buyer’s legal team from the Washington, D.C.-based firm, Orrick, Herrington & Sutcliffe.
Asbill explained to the judge at July’s hearing, that he learned that the firm also represented T-Mobile, which was one of the clients Buyer victimized when he bought Sprint stock after learning the two telecommunications giants were merging.
On Tuesday, the judge was told there was no overlap in the work. Buyer reiterated his desire to keep his Orrick lawyers and Berman found that his formal waiver of any conflict was acceptable.
Jonathan Bandler, a staff writer at USA Today Network’s The Journal News/Lohud in Westchester County, NY, contributed reporting from U.S. District Court in Manhattan.
Noe Padilla is a reporter for the Journal & Courier. Email him at Npadilla@jconline.com and follow him on Twitter at 1NoePadilla.
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