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Former fed convicted of running penny stock scam on Virginia residents

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ALEXANDRIA, Va. (WRIC) — A former federal regulator has pleaded guilty to securities fraud after he ran a “penny stock” scam that convinced Virginia residents to fork over an estimated $1.3 million in cash for stocks he knew to be worthless.

Phillip Offill, 64, of Dallas, was at one point an attorney with the Securities and Exchange Commission, the regulatory arm that oversees stock trading. But by 2011, that same body had permanently banned him form trading so-called “penny stocks” — stocks that regularly trade for less than $5 — because he had been convicted of participating in several “multimillion-dollar pump-and-dump stock manipulation schemes.”

He was still on parole from that conviction when he undertook a new fraud involving penny stocks, a paper-thin mining company and a massive California call center.

In 2017, Offill was brought in by the owners of a company called Armada mining to merge his company with a shell corporation and form a new company — with publicly tradeable stocks — called Mansfield-Martin Exploration Mining.

But Offill, as a result of his previous fraud convictions, was permanently banned from involvement in penny stock companies like Mansfield — so he simply used an alias.

Employees of Mansfield and regulators came to know him as “Jim Jimerson.”

Then, Offill, Justin Herman — a co-conspirator who also pleaded guilty this week — and several others began transferring millions of shares in Mansfield between accounts they controlled. The ruse was intended to give buyers the impression that the shares were in high demand.

Then they used a California call center to hock the shares to buyers across the United States — eventually netting over $1.3 million.

Offill and Herman now face up to 25 years in prison and will be sentenced on June 21.