A church (Photo: Cardaf/Thinkstock)

A former Merrill Lynch rep accused by the Securities and Exchange Commission in April of scamming pastors, churchgoers and other investors out of $5.2 million as part of a fraudulent securities offering has now been indicted.

Phillip W. Conley of Jacksonville, Florida, was indicted Aug. 5 by a federal grand jury in U.S. District Court for the Northern District of West Virginia in Wheeling, on six counts of mail fraud and one count of securities fraud. The indictment was unsealed Tuesday, the SEC announced Thursday.

Merrill Lynch declined to comment on Friday. Conley left the firm in 2014, according to the Financial Industry Regulatory Authority’s BrokerCheck website.

From 2014 to 2019, Conley allegedly scammed 18 individuals across the U.S., including churches, pastors, “at least one parishioner,” and even his own adoptive mother and stepfather, U.S. Attorney Bill Powell said Tuesday while announcing the indictment.

In an April 16 complaint, the SEC had said Conley raised the $5.2 million in funds from “at least 20 investors through the fraudulent offer and sale of securities,” convincing “some of his most trusting investors, including pastors and church congregants, to invest their money with one or more of the entities he controlled while knowing the investments were not legitimate, that he would make no securities investments on their behalf, and would instead spend their money like it was his own.”

The complaint alleged that, between January 2014 and September 2018, Conley induced investors to buy securities “by making a series of materially false and misleading statements and omissions concerning the legitimacy of the investments and the use of investor proceeds.”

Conley allegedly failed to invest those proceeds as promised and instead commingled investor funds in bank accounts that he controlled, the SEC said. Conley instead “used the majority of the funds to support his lavish lifestyle, including private jet charters, luxury automobiles, opulent jewelry and clothing purchases, and to repay other investors with Ponzi-like payments,” the regulator said.

He allegedly “perpetrated the fraud by claiming that he managed multiple private investment funds through his company,” ALPAX LLC, and affiliated shell companies, the SEC said.

The SEC charged Conley with violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and the Investment Advisers Act of 1940 and Rule 206(4)-8.

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