A Wisconsin financial advisor barred by both the SEC and Finra was sentenced to 84 months in federal prison for a scheme to defraud his clients and committing bank fraud, the U.S. Attorney’s Office said.
Michael Shillin, 33, of Appleton, Wis., was sentenced yesterday in U.S. District Court, according to the U.S. Attorney's Office.
He pleaded guilty to the charges on May 23. He has been in custody since April 12 because he violated the terms of his pretrial release that forbade him from traveling outside of Wisconsin when he took a vacation to St. Thomas, the Attorney’s Office statement said.
According to the original SEC filing in September 2021, Shillin and his firm, Shillin Wealth Management LLC of Altoona, Wis., defrauded roughly 100 clients, many of them elderly, between 2014 and 2020 in Wisconsin's Chippewa Valley "and beyond."
The agency said Shillin sold insurance policies with fabricated long-term care benefits, told investors they had built up significant nest eggs from non-existent stock positions and set up a web portal where his clients could “monitor” their accounts, among other claims.
In one instance, he told a client that a non-existent SpaceX investment had added $450,000 to his account, and the client retired early based on that information, the SEC said.
“As the scheme unraveled, Shillin used fraudulent collateral to obtain two bank loans in the aggregate amount of $462,000 to continue the scheme,” the Attorney’s Office said.
According to the statement, the judge at sentencing rejected Shillin’s argument that he had only been trying to make his clients feel good, and instead stated that Shillin lied to them to make himself feel good.
Shillin started working in the industry in 2011, first at Edward Jones and then as an investment advisor at Raymond James until 2018, according to BrokerCheck. He then was affiliated with Alliance Global Partners until October 2020, when he voluntarily resigned after he was accused of allegedly created insurance documents that did not exist. He was permanently barred by Finra in January 2021 and by the SEC in January 2022.
According to BrokerCheck, there are 15 client claims pending against him, totaling about $578,000. Another 16 claims totaling $861,000 have already been settled. Shillin declared bankruptcy in November 2021.