Fogel told jurors that Blaszczak passed along frequent updates as CMS considered the reimbursement changes, information that was often at odds with public expectations.

“It was not public,” Fogel testified at the trial. “It was much different than the consensus.”

Managing Partner
The jury convicted Deerfield partners Olan and Huber of five counts and acquitted them of five others. Worrall was acquitted of 14 counts and found guilty of just one count of theft of government property and one count of wire fraud.

Deerfield manages more than $8 billion, with investments concentrated in health-care companies. Prosecutors said others there knew that Blaszczak was passing illegal tips, including James E. Flynn, a managing partner who allegedly encouraged the practice. Flynn, who wasn’t charged, was identified as a “co-conspirator” before trial, allowing prosecutors to introduce statements he made in evidence. Flynn testified for the defense.

The firm agreed to pay $4.6 million to settle U.S. Securities and Exchange Commission allegations that it failed to properly supervise its employees. It didn’t admit or deny wrongdoing.

Blaszczak’s lawyers claimed his success in predicting CMS actions was the result of exhaustive research based on publicly available information, not tips from a government mole. Defense lawyers called Fogel a liar and questioned why Worrall, who received no money for the alleged tips, would risk his career for nothing.

Defense lawyers also sought to convince jurors that Washington’s information ecosystem operates differently than Wall Street’s, with rumors flowing freely and former staffers hired into K Street lobbying shops for their connections and expertise.

Golf, Drinks
Prosecutors showed the jury evidence of Blaszczak’s cozy relationship with Worrall, which included lunch meetings, golf, baseball games and drinks. Prosecutors claim he wooed Worrall by inviting him to join his firm in 2014, saying they’d probably make $2 million in revenue by year’s end, according to court records.

“We’d kill it working togethe[r],” Blaszczak wrote in a text message to Worrall. “You’re like a drunk whore to me,” Worrall replied. “Hard to resist.”

Worrall didn’t join Blaszczak’s firm, but used his job offers to leverage a promotion at CMS, according to the government.