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Regulation and Compliance > Litigation

Barred Broker Sentenced to 7 Years for Fraud

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What You Need to Know

  • On Thursday in Wisconsin, Chief U.S. District Judge James D. Peterson sentenced former Raymond James and Alliance Global Partners broker to 84 months in prison.
  • He previously pleaded guilty to one count each of bank and wire fraud as part of a plea deal.
  • The barred broker's probation was revoked in April after he took an unauthorized Caribbean trip.

A former Raymond James Financial and Alliance Global Partners broker accused of defrauding at least 100 clients was sentenced Thursday to seven years in prison.

Michael Francis Shillin, 33, was the subject of 37 client complaints since 2020. His pretrial probation was revoked in April after he violated its terms by allegedly taking an unauthorized trip to the Caribbean.

He pleaded guilty in May to one count each of bank and wire fraud, according to court documents and Timothy M. O’Shea, U.S. Attorney for the Western District of Wisconsin.

At sentencing, Chief U.S. District Judge James D. Peterson stressed the need to impose a sentence for Shillin’s “pretty horrifying crime,” O’Shea said in a news release.

Based on the record at sentencing, Judge Peterson called Shillin “resolutely dishonest” and a “very selfish person,” according to O’Shea.

The judge rejected Shillin’s argument that he only lied in a misguided attempt to make his clients feel good, O’Shea said. Judge Peterson instead stated that Shillin “lied to make [himself] feel good,” according to O’Shea.

The judge also noted that the victims should not feel bad about being defrauded because they were defrauded by a “highly skilled manipulator” who had “vast experience in deceit,” according to O’Shea.

Raymond James, AGP and Kathleen Quinn, the attorney representing Shillin, did not immediately respond to requests for comment on Monday.

The Plea Deal

A federal grand jury returned an indictment against Shillin, the owner of financial advisory firm Shillin Wealth Management, in October. The Justice Department charged him with nine counts of wire fraud and one count of bank fraud.

Shillin agreed to plead guilty to one count of wire fraud and one count of bank fraud — charges that can carry sentences of up to 20 years and up to 30 years in prison, respectively.

As part of the plea agreement, he also agreed to five years of supervised release and to pay a $1.25 million fine and $200 special assessment.

Defrauding Clients

Shillin allegedly told his clients that he bought nonpublic stock of well-known companies on their behalf and that they made hundreds of thousands of dollars on those investments when Shillin had actually not purchased the stocks at all, according to the indictment.

The indictment further alleged that Shillin persuaded several clients to buy insurance policies by misrepresenting the cost of the policies and the benefits, and that Shillin received commission payments on some of those policies. He also allegedly provided clients with fraudulent tax documents to make them appear eligible for tax breaks to which they weren’t entitled.

The indictment also charged Shillin with defrauding a bank by obtaining two loans totaling $462,000 on behalf of his company, SWM, by using fraudulent collateral. The indictment alleged that he provided an account statement showing that SWM owned an account with a balance of over $1.2 million, when actually it was a client who owned and controlled the account.

Caribbean Trip

Arguments were heard in April in U.S. District Court for the Western District of Wisconsin after the probation office petitioned for revocation of Shillin’s pretrial release after it was learned he traveled to St. Thomas in the U.S. Virgin Islands.

Shillin took the trip despite his request to travel there having been denied by the court and Justice Department before he went.

The probation office’s request for Shillin to be detained was granted by the court and he was detained pending his trial and sentencing, according to court documents.

Barred From the Industry

Shillin was a registered representative and broker with Raymond James from 2014 to 2018 and served in the same roles at Alliance Global Partners from 2018 to 2020, according to his report on the Financial Industry Regulatory Authority’s BrokerCheck website. He was also a rep for Edward Jones from 2011 to 2014.

On Nov. 18, the U.S. District Court for the Western District of Wisconsin entered a partial judgment against Shillin in a civil action that was filed by the Securities and Exchange Commission on Sept. 23, charging him with defrauding at least 100 clients.

According to the SEC’s complaint, Shillin, while acting as an advisor, fabricated documents and made misrepresentations to clients, many of whom were older adults.

Shillin was the subject of 37 client disputes, according to his BrokerCheck report. All were filed after he was terminated by Raymond James on May 21, 2018, and resigned from AGP on Oct. 2, 2020, while under investigation for alleged securities violations. In the disputes, many of which are still pending, Shillin was accused of making a diverse array of misrepresentations to clients.

In December, Shillin was barred from the industry by FINRA after he refused to produce information or documents or give on-the-record testimony as requested by FINRA staff. The SEC issued an order in January permanently barring Shillin from the financial services industry.

(Image: Shutterstock) 


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