I recommend reading the Justice Department’s press release for full details. Below are some choice quotes.
Phillip Windom Offill Jr., 51, of Dallas, was indicted on March 12, 2009, and today was found guilty of one count of conspiracy to commit registration violations, securities fraud and nine counts of wire fraud.
“It is a sad day when a former U.S. Securities and Exchange Commission (SEC) attorney uses what he learned in the government to later defraud the investing public,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division. “As this case shows, individuals who illegally manipulate our securities markets to line their own pockets will be brought to justice.”
“As a former SEC lawyer, Mr. Offill knew the law – and he intentionally broke it and tried to hide his crimes,” said U.S. Attorney Neil H. MacBride of the Eastern District of Virginia. “He and his co-conspirators made millions while innocent investors were left with stock in worthless companies. We are committed to pursuing these cases aggressively to protect the public and the integrity of the securities market.”
Unfortunately, I am not familiar with any of the companies involved in the case: “Emerging Holdings Inc.; MassClick Inc.; China Score Inc.; Auction Mills Inc.; Custom-Designed Compressor Systems Inc.; Ecogate Inc.; Media International Concepts Inc.; Vanquish Productions Inc.; and AVL Global Inc.”
In connection with Emerging Holdings, MassClick and China Score, evidence at trial showed that Offill knowingly participated in a conspiracy known as a “pump-and-dump” scheme to manipulate the price of these companies’ securities. Co-conspirators falsely manipulated the price and volume of some of the companies’ stock by making materially false and misleading statements in press releases and in spam e-mails to tens of millions of e-mail addresses throughout the United States in an effort to create artificial demand for the three companies’ stock. After fraudulently “pumping” the market price and demand for the companies’ stock, co-conspirators “dumped” shares by selling them for large profits to the general investing public in the over-the-counter market through listings on Pink Sheets, an inter-dealer electronic quotation and trading system.
The good thing about this case is that Offill was remanded into custody and he
faces a maximum penalty of five years in prison on the conspiracy charge and 20 years in prison for each charged count of wire fraud. He will also be subject to up to $15 million in forfeiture.