* Kenneth Robinson pleaded guilty to fraud, conspiracy
* Robinson passed tips from lawyer to trader -prosecutors
* Accomplice Matthew Kluger got record 12-year prison term
By Jonathan Stempel
June 5 (Reuters) - The middleman in a U.S. insider trading scheme that prosecutors said produced about $37 million of illegal profit was sentenced to 2-1/4 years in prison on Tuesday, one day after an accomplice received the longest sentence ever imposed in such a scheme.
Kenneth Robinson, a 46-year-old mortgage broker, had pleaded guilty in April 2011 to two counts of securities fraud and one count of conspiracy.
He admitted to having received tips from corporate lawyer Matthew Kluger about pending mergers, and passing the tips to trader Garrett Bauer, in a scheme that prosecutors said ran for 17 years.
Robinson was sentenced by U.S. District Judge Katharine Hayden in Newark, New Jersey. He had faced a possible prison term of about six to seven years under nonbinding federal sentencing guidelines, but cooperated with authorities.
On Monday, Hayden sentenced Kluger to 12 years in prison, the longest term ever for insider trading. She sentenced Bauer to nine years.
Francis Murray, a lawyer for Robinson, did not immediately respond to requests for comment. The sentence was announced by U.S. Attorney Paul Fishman in New Jersey.
Robinson let investigators secretly record his conversations with Bauer and Kluger after federal agents had searched his home in March 2011.
In these conversations, according to prosecutors, the men discussed destroying evidence, including the disposal of computer records and “throwaway” phones and whether money could be cleaned in a washing machine to rid it of fingerprints.
Bauer made the bulk of the illegal profit, while Robinson admitted to personally making trades in 2009 and 2010 on two tips from Kluger - Hewlett-Packard Co’s takeover of 3Com Corp and Intel Corp’s purchase of McAfee Inc.
Bauer and Kluger pleaded guilty in December, and plan to appeal their sentences, their respective lawyers said.
Kluger’s sentence is longer than the 11-year term handed down last October to Raj Rajaratnam, the founder of the Galleon Group hedge fund firm, in one of Wall Street’s highest-profile white-collar cases.
Rajaratnam’s insider trading scheme involved more illegal profit but took place in a shorter time frame, prosecutors said.
The case is U.S. v. Robinson, U.S. District Court, District of New Jersey, No. 11-cr-00223. (Reporting by Jonathan Stempel in New York; Editing by Jan Paschal)