Former SEC attorney of Dallas convicted on federal fraud charges again sentenced in $1.3 million Penny-Stock Scheme

MyTexasDaily.com
July 12, 2023

DALLAS, Texas — On July 12, 2023, Phillip W. Offill Jr., a former securities attorney from Dallas, Texas, was sentenced to 72 months in prison for his involvement in a conspiracy to defraud more than 1,000 investors in a penny-stock scheme.

"This case stands out because of the defendant's greed and complete disregard for the rule of law, even after serving a federal prison sentence for fraud" said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. "While still on supervised release from his last offense, Mr. Offill and his co-conspirators used their stock market expertise to swindle unsuspecting average investors in order to enrich themselves. I’m grateful to our attorneys and investigative agents who identified and put an end to this flagrantly exploitative scheme."

According to court documents, between November 2016 and October 2018, Offill, 64, alongside Justin Wallace Herman, 52, of Canonsburg, Pennsylvania, and others, fraudulently claimed millions of shares of a publicly traded company, MCPI, which held mining claims in Arizona and Idaho.

The defendants deceitfully marketed these shares for sale through third parties, including call centers, giving false statements to potential investors while manipulating the market to make the stock appear more actively traded than it was. Offill was at the center of the conspiracy, creating and submitting fraudulent documents to gatekeepers such as the Financial Industry Regulatory Authority (FINRA) and knowingly causing two false press releases to be issued to increase demand for MCPI stock. The scheme resulted in losses of approximately $1.3 million for victim investors.

Prior to this, Offill worked as an attorney for the U.S. Securities and Exchange Commission (SEC) for over 14 years. After leaving the SEC in 2010, he was convicted for participating in multi-million dollar pump-and-dump stock manipulation schemes. He was sentenced to eight years in prison and three years of supervised release in April 2010. It was while on supervised release for his 2010 conviction that Offill committed the current offense involving MCPI stock.

In previous civil cases brought by the SEC in 2011 and 2012, Offill was permanently barred from participating in an offering of penny stock. However, he disregarded these bans to commit the current offense.

“This serial offender defrauded over 1,000 investors, including many who entrusted him with their retirement funds and life savings,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “Today’s sentence and restitution demonstrate the Justice Department’s commitment to protecting victims from financial predators, securing the integrity of our public markets, and obtaining restitution for victims of fraud.”

“Phillip Offill engaged in a fraudulent criminal scheme to inflate stock prices through false information, causing victims to lose over $1.3 million of their hard-earned money,” said David Sundberg, Assistant Director in Charge of the FBI Washington Field Office. “Pump-and-dump schemes, such as this one, deteriorate the integrity of the market. The FBI will work to hold accountable those who choose to break the law and swindle unsuspecting victims.”

The case was announced by Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia; Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department’s Criminal Division; and Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal Division, after sentencing by U.S. District Judge Ronnie D. Alston.

The case is being prosecuted by Assistant U.S. Attorney Kimberly R. Pedersen of the Eastern District of Virginia, and Trial Attorneys Andrew Tyler and Amanda Fretto Lingwood of the Criminal Division’s Fraud Section at the Justice Department.