SEC target Offill files motion for acquittal 2010-02-12 13:24 ET - Street Wire Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
Also Street Wire (U-AVLL) AVL Global Inc
by Mike Caswell Phillip Offill, the Texas lawyer convicted of securities fraud, has filed motions for acquittal and for a new trial. He claims that prosecutors failed to present sufficient evidence to find him guilty beyond a reasonable doubt. On Jan. 28, 2010, a 12-member jury found Mr. Offill guilty of 10 counts of securities and wire fraud. The conviction followed a nine-day trial in Virginia, during which prosecutors argued that Mr. Offill helped insiders of nine public companies improperly acquire millions of free-trading shares. The insiders then sold those shares to the public in various pump-and-dump or market manipulation schemes. The stocks included AVL Global Inc., a pink sheets listing run by Ontario father and son Peter and Tyler Fisher. Mr. Offill, 51, has been in jail since his conviction. He had been free on a $50,000 bond, which the judge revoked upon the guilty verdict. (All figures are in U.S. dollars.) According to prosecutors, he faces a sentence of between 21 and 27 years in jail. Motion for acquittal Mr. Offill filed a motion for acquittal on Feb. 11, 2010. In it, he claims that all he did was help investors acquire shares under a Rule 504 exemption. Prosecutors did not present any evidence that he took part in any pump-and-dump, or that he assisted with one or even knew about one. The prosecution's case, according to Mr. Offill's motion, only shows that he performed valid legal work. Specifically, he caused accredited investors to buy shares in several public companies. "The government's evidence fails to show that Mr. Offill personally engaged in any illegal conduct, nor did the government present substantial evidence that he intended for the various transactions to be used in an illegal manner," the motion reads. He says it is possible that others conspired to commit securities fraud, but the government did not present any evidence that he was aware of any spamming or the resultant trading. Even if unqualified investors later received the shares bought by accredited investors, the government did not show that Mr. Offill knew it, the motion argues. At trial, prosecutors did not ask any of the individuals who ultimately received the shares if they were accredited investors. Mr. Offill says that the government's evidence shows that another lawyer, David Stocker, distributed the shares after Mr. Offill initially purchased them. In addition to his motion for acquittal, Mr. Offill has filed a motion seeking a new trial. In that motion, he argues that the judge erroneously admitted evidence from events that occurred years after the share issuances. The evidence included recorded conversations Mr. Offill had with convicted market manipulator Stephen Luscko in 2006. The men discussed a spam operation for a company called Clearvision International Inc. Mr. Offill points out that these events are distinct from the ones he was charged with, and should not have been considered at his trial. "In other words, the two alleged conspiracies involved different co-conspirators, occurred at different times, and had different objectives," the motion reads. As he sees it, the evidence was more prejudicial than helpful when presented to the jury. He is asking for a new trial, without that evidence. Presumably the new trial he seeks would only be necessary if he does not succeed on his motion for acquittal. Offill's indictment Prosecutors indicted Mr. Offill on March 12, 2009, in the Eastern District of Virginia. They claimed that he and Mr. Stocker devised a method to illegally obtain free-trading shares in public companies, and they transferred those shares to insiders. The indictment listed the nine companies as AVL Global Inc., Emerging Holdings Inc., MassClick Inc., China Score Inc., Auction Mills Inc., Custom-Designed Compressor Systems Inc., Ecogate Inc., Media International Concepts Inc. and Vanquish Productions Inc. With AVL Global, Mr. Offill and Mr. Stocker provided 10 million shares of the company to the Fishers. Mr. Offill purchased the stock through a private company called Collective Thought Holdings Inc., and prepared blank stock transfer forms that allowed Mr. Stocker to transfer the shares to anybody. Mr. Stocker then prepared a legal opinion stating that the shares complied with Rule 504, and within days the Fishers had free-trading shares. The indictment did not state exactly what the Fishers did with the shares, but a parallel civil suit filed by the SEC provided some details. It stated that they pumped AVL Global to $4.10 and dumped thousands of shares while touting a phony deal with the government of Botswana. The Fishers both deny any wrongdoing. The case has been on hold pending the outcome of Mr. Offill's criminal case, as he is a defendant it both matters. Mr. Offill and Mr. Stocker were the last of several men criminally charged with pump-and-dumps of the nine companies. Mr. Stocker pleaded guilty without a hearing, and is scheduled to be sentenced on March 8, 2010. The others included Justin Medlin, a spammer from Paris, France, known as "The Kid." He received six years in jail for operating a spam business that touted Emerging Holdings, MassClick and China Score. Also convicted were Michael Saquella, who received a 10-year sentence; Steven Luscko and Gregory Neu, who received five years each; Lawrence Kaplan, who received three years; Brian Brunette, who received one year; Anthony Tarantola, who received six months; and Henry "Hank" Zemla, who received three months. Offill's Vancouver connections Prior to his criminal charges, Mr. Offill spent much of his career as a securities lawyer. From 1984 to 1999, he worked at the SEC's office in Forth Worth, Tex., in the enforcement department. He then went into private practice, where he made connections with Vancouver securities lawyer John Briner and with David Whittemore, a Texas man who touted Vancouver-based Yap International Inc. Government records show that he filed incorporation documents for Nexus Asset Holdings LLC, a private company managed by Mr. Briner. The SEC identified Nexus in a civil suit against Mr. Briner for the Golden Apple Oil & Gas Inc. market manipulation. It said he used Nexus to hold shares of Golden Apple. Mr. Briner denies any wrongdoing, and is awaiting trial. Mr. Offill was the defence lawyer for Mr. Whittemore in an SEC case for the manipulation of Yap International. The regulator claimed that Mr. Whittemore left messages on voice mail systems across the country that purported to be a hot stock tip left at the wrong number. Mr. Whittemore settled the case without a trial, and is waiting for the judge to determine his penalty. Mr. Offill represented Mr. Whittemore until his indictment. | 
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