ATLANTA -- A federal judge last week sentenced Bill Collins, convicted in October of an extortion scheme involving Kentucky bond contracts, to 63 months in a federal prison and a $20,000 fine.
The sentencing order of U.S. District Court Judge Joseph Hood, entered Dec. 27, calls for the husband of former Kentucky Gov. Martha Layne Collins to serve the minimum jail term for extortion under federal guidelines. Hood also ruled that Bill Collins must serve a concurrent five-year term for a related tax-evasion conviction.
The extortion charge carried a maximum penalty of 20 years in prison and a $250,000 fine; the tax code violation carried a maximum five-year prison sentence and $250,000 fine.
Collins, was convicted on Oct. 14 of forcing investment bankers to make political contributions and invest in a horse partnership venture in exchange for state underwriting business.
In remarks delivered at a hearing preceding the sentencing, Hood said the prison term would "serve to deter others from further tarnishing the Commonwealth by selling their influence."
"Let it be known, by your example, that the Commonwealth of Kentucky is not for sale," he said.
At the hearing, Hood also blasted officials at Donaldson, Lufkin & Jenrette Securities Corp. and Cranston Securities Co., the two underwriting firms that Collins was convicted of extorting from. Officials at neither company were charged with any criminal wrongdoing in connection with the case.
"They were more than willing to help him violate the law; they became involved in it to the fullest extent," Hood said, according to a transcript of the sentencing hearing.
During the trial, prosecutors charged that there was a direct link between campaign contributions and horse partnership investments made by the two firms and their being named to head $1.7 billion of bond deals. Prosecutors also charged that Donaldson Lufkin was forced to pay for a $35,000 custom-built piano presented to Martha Layne Collins at the end of her first year in office. Collins, the state's first female chief executive, served between 1983 and 1987.
During that period, Donaldson, whose executives invested $1.2 million in the horse partnerships, became bookrunner on bond deals totaling $500 million. Cranston, whose bankers put up $450,000 for the partnerships, was named to head deals totaling $1.2 billion.
Officials at both firms have repeatedly denied involvement in any illegal activities.
Frank Haddad, Bill Collins' lawyer, declined comment on the sentence, but said he has requested that his client be free on bond pending an appeal of the conviction. Haddad said that he submitted notice of Collins' intent to appeal the case to the Sixth Circuit Court of Appeals last Friday.
"We will fight the conviction on the grounds that there was insufficient evidence presented to support" the government's charges, Haddad said.
Hood said that Bill Collins must surrender to federal prison authorities two weeks after they choose a site, which is expected within the next several weeks. The judge said that he would ask that Collins be imprisoned at a Montgomery, Ala., federal penitentiary, following a request from Haddad.
Under federal guidelines, Collins must serve at least 85% of the 63-month jail term, or about four and a half years.
Hood said he considered imposing a fine that included payment of prison expenses, but decided not to do so after reviewing the Collins' finances.
Bill Collins also faces additional prison time if convicted on a pending federal obstruction of justice charge. The case, which will be tried before the U.S. District Court for the Eastern District of Kentucky in May, stems from charges that Collins forced a grand jury witness in the extortion case to destroy evidence.
