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Briner Group's Dallas partner faces 185 years in prison and 15 million dollar fine. Offill was the US stand in for John Briner at Nexus Asset Holdings.

Briner could very well be next. Oh what a tangled web they weaved.

Ex-SEC lawyer Phillip Offill indicted in fraud case

12:00 AM CDT on Saturday, March 14, 2009


By ERIC TORBENSON and BRENDAN CASE / The Dallas Morning News


A 5-year-old web of alleged market manipulation and e-mails touting can't-miss penny stocks culminated Friday in the federal indictment of Dallas attorney and former white-collar crime cop Phillip W. Offill.

The former Securities and Exchange Commission litigator faces a single charge of conspiracy to commit registration violations and nine counts of wire fraud, the U.S. Department of Justice said. He could not be reached for comment; he has previously denied any wrongdoing.

Offill, 50, was taken into custody Friday in Dallas and is scheduled to be arraigned March 27 in Alexandria, Va. He was released on a personal recognizance bond and surrendered his passport.

He faces having to repay $15 million and up to 185 years in prison if convicted on all counts.

"Good riddance," said Cromwell Coulson, chief executive of Pink OTC Markets, a New York-based company that operates over-the-counter stock markets including the Pink Sheets, where Offill's alleged stock schemes were centered.

Offill and another attorney, David Stocker of Phoenix, worked together to register millions of unregistered shares of nine small companies that were eventually sold to investors, the indictment said. The tactic allowed Offill and Stocker to hide the actual financial conditions of the companies, the indictment said.

Offill and Stocker also participated in a "pump and dump" campaign that used "false and material" statements in news releases, spam e-mails and mass faxes to drive up the share prices of three companies on over-the-counter stock trading bulletin boards such as the Pink Sheets, authorities alleged.

After the share prices rose, Offill, Stocker and others would sell, or "dump," the shares and pocket millions in profit, according to the indictment.

"Phil Offill called me up personally and vouched for David Stocker," Coulson said. "We asked him, 'Could you put that in writing?' Hopefully that will help put him in the big house."

Offill is the latest of 10 individuals targeted in the sweeping investigation that involved the FBI, the U.S. Postal Inspection Service, the Financial Industry Regulatory Authority and the SEC.

Stocker pleaded guilty to one count of conspiracy Wednesday and will be sentenced Nov. 6. Eight other defendants in the broad investigation have also pleaded guilty and been sentenced to prison terms ranging from three months to six years.

Friday's indictment alleges that Stocker and Offill helped create 18 companies - 11 registered in Texas - that evaded federal and state securities rules in what the government called a "shell creation group."

The companies conducted "sham" transactions between each other to give the appearance that their stock was desirable, the government said.

The two men allegedly pumped and dumped shares of companies called Emerging Holdings Inc., MassClick Inc. and China Score Inc. to create big profits for the co-conspirators. Offill also earned thousands from fees for doing the stock transactions, the indictment says.

Offill faces two lawsuits filed by the SEC that allege he broke securities laws and conspired to commit fraud. He has vigorously denied the allegations; both cases are still pending.

Separately, Offill played a key role in a $35 million investment scam in Texas and Florida allegedly perpetrated by a Dallas-based finance company, Amerifirst Funding.

Offill defended the men accused of running the scheme and provided advice about the Amerifirst investments when he worked at Godwin Gruber law firm in Dallas.

In 2008, Offill was found to be in civil contempt for what the SEC said was his masterminding a plan to hide assets from a court-appointed receiver in the Amerifirst case; he and the Amerifirst defendants were required to pay back money to the receiver that later was refunded to the victims.

In a mild irony, the court-appointed receiver for the companies that financed Amerifirst has sued Offill and Godwin Gruber (now called Godwin Ronquillo) alleging that Offill should have told the men behind Amerifirst that their investments weren't legal and would attract the SEC's attention. Offill and the firm have said the suit is preposterous.

In March 2008, Offill's Texas law license was suspended until at least 2011 after he was found to have violated ethics rules in a case. Those who worked with him during his SEC days and those who opposed him described Offill as a brilliant legal mind whose interest in the lavish lifestyle of those he sued as a government litigator contributed to his starting his own practice.

"I have interesting clients with interesting problems," Offill said in late 2007.

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