Phillip Conley, a former registered representative, has been sentenced to 87 months in prison for defrauding West Virginia churches, pastors, and others out of approximately $5 million. He previously pled guilty to one count of securities fraud and admitted to swindling millions from investors in multiple states.
Last year, the Securities and Exchange Commission brought a civil action against Conley for similar conduct, alleging that between January 2014 and September 2018, he convinced some of his most trusting investors to invest their money into one or more of the entities he controlled while knowing the investments were not legitimate. His victims included churches, small business owners, as well as friends and family members.
Conley was affiliated with Merrill Lynch from 2012 until 2014, and with Wells Fargo for two years before that.
United States Attorney William Ihlenfeld II said that he continued to portray himself as an advisor even after his license was suspended in December 2015. According to BrokerCheck, Conley was suspended for failing to comply with an arbitration award where he was liable to pay Merrill Lynch $699,800 in compensatory damages. His former employer alleged that when he began his employment, he received a loan by executing a promissory note and refused to repay it after he voluntarily resigned in May 2014.
After leaving Merrill, he formed a company called ALPAX LLC and persuaded people to invest in false ventures such as student housing construction, high-yield fixed income securities, oil and gas technology, mineral rights, and timber leasing. He also provided investors with dividend statements with misstated investment account values, and reportedly spent the stolen money on private jets, designer clothes, fine dining, jewelry, and housing and living expenses.
“Securities fraud is a terrible crime and often has a devastating impact,” said Ihlenfeld. “Mr. Conley was very persuasive and groomed his victims, convincing them that these were legitimate investment opportunities. Unfortunately, it was a scam in which Conley robbed investors of their life savings.”
In addition to the prison sentence, Conley was ordered to forfeit any property purchased from the proceeds of the crimes and to pay a money judgement of nearly $4.9 million. He was barred by the SEC last week.