A former Eau Claire, Wis.-based advisor has been sentenced to 84 months in prison for defrauding at least 100 advisory clients and a bank, according to the Department of Justice.
Michael Shillin, 33, pleaded guilty to the charges on May 23, and was barred from the securities industry by both the Financial Industry Regulatory Authority and the Wisconsin Department of Financial Institutions, Division of Securities. The Securities and Exchange Commission obtained a partial judgement against him in a separate complaint in November 2021.
The court found Shillin guilty of a three-part wire fraud scheme. First, he told clients he was using their funds to purchase shares of pre-IPO stocks in high-profile companies such as Space-X and Palantir. He also misled clients into believing he bought long-term care insurance policies and that they were eligible for tax benefits. Both claims were untrue, according to the DOJ. Instead, he used fraudulent collateral to get $462,000 in bank loans.
Shillin was a registered rep of Alliance Global Partners from 2018 to 2020. In 2018, he was discharged from Raymond James Financial Services for failing to follow a firm directive regarding the payment of client CPA fees, according to BrokerCheck. A spokesman for Alliance Global Partners declined to comment.
Chief U.S. District Judge James D. Peterson handed down the sentencing in the case this week, calling Shillin “resolutely dishonest,” a “very selfish person,” and a “highly skilled manipulator” who had “vast experience in deceit.”
The SEC filed a separate complaint against Shillin last September, and obtained a partial judgement against him in November. The SEC charged him with violating anti-fraud provisions, saying he fabricated documents and misled his clients, many of whom were elderly. For example, Shillin misled one client into believing he was $450,000 richer due to an investment in Space-X. That client decided to retire early as a result, only later learning there was no investment profit.
“Shillin went to great lengths to deceive his clients,” the SEC complaint said. “He even set up an online portal for his clients to monitor their portfolio of securities and profits – much of which, as we now know, were pretend.”
The partial judgment bars Shillin from acting as an officer or director of a public company, and orders him to pay disgorgement, prejudgment interest and a civil penalty. Those amounts have yet to be determined.
In addition, the judgment bars Shillin from acting as an officer or director of a public company and orders him to pay disgorgement, prejudgment interest and a civil penalty in amounts to be determined by the court at a later date.