Four Defendants Sentenced Following Convictions at Trial for Stealing Confidential Government Information and Using It to Engage in Illegal Trading
BLASZCZAK, WORRALL, HUBER, and OLAN each participated in a scheme to obtain confidential information from CMS, which was then used execute profitable trades at Deerfield. Specifically, as part of the scheme, BLASZCZAK obtained confidential and nonpublic information from CMS employees, including his friend,
In a separate scheme, BLASZCZAK also obtained confidential and nonpublic CMS information about cuts in CMS's reimbursement rates for home health providers, and provided that information to
Deputy
According to the allegations in the charging documents, the evidence and testimony at trial, and statements made in court proceedings:
CMS
CMS, a component of the
WORRALL began working at CMS in or about 1999. Beginning in
At all relevant times, BLASZCZAK served as a consultant at a number of
As a former CMS employee, BLASZCZAK was well aware of CMS's rules governing the dissemination of nonpublic information.
At all relevant times, Deerfield managed multiple hedge funds specializing in healthcare-related investments. As of 2017, Deerfield had more than
The Scheme to Convert and Use Confidential CMS Information
The Scheme
From at least in or about 2009 through in or about 2014, BLASZCZAK, WORRALL, HUBER, OLAN, Fogel, and others participated in a scheme to convert to their own use confidential and material nonpublic information from CMS concerning, among other things, CMS's internal deliberations regarding coverage and reimbursement decisions.
During this time period, Deerfield retained BLASZCZAK as a consultant who provided political intelligence related to, among other things, the content, likelihood, and timing of CMS reimbursement decisions. As part of the scheme, HUBER, OLAN, and Fogel encouraged BLASZCZAK to obtain confidential and material nonpublic information from CMS insiders. As HUBER, OLAN, and Fogel knew, these CMS insiders included BLASZCZAK's former colleagues with whom he had close personal relationships, who were prohibited from disclosing such information to CMS outsiders.
BLASZCZAK obtained material nonpublic information from his close friend and former CMS colleague WORRALL. BLASZCZAK and WORRALL were friends since their time working together at CMS. BLASZCZAK also frequently offered to help WORRALL find lucrative private sector employment opportunities, in exchange for WORRALL giving BLASZCZAK confidential government information.
BLASZCZAK conveyed the information obtained from WORRALL to HUBER, OLAN, and Fogel, who - knowing that BLASZCZAK had obtained the information improperly from a CMS insider - used the information to trade. In exchange for being provided with this inside information, HUBER, OLAN, and Fogel caused Deerfield to pay BLASZCZAK more than
The Verdict
The jury found BLASZCZAK guilty of 10 counts, HUBER and OLAN guilty of five counts each, and WORRALL guilty of two counts. Specifically, with respect to Count One (conspiracy to convert government property, to commit securities fraud, and to defraud
In addition to his prison sentence, BLASZCZAK, 42, of
WORRALL, 40, of
HUBER, 56, of
OLAN, 47, of
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