Former Altoona financial adviser barred by SEC, files for bankruptcy

Jan. 17—EAU CLAIRE — A former financial adviser barred from the industry over accusations he defrauded clients has filed for bankruptcy.

Michael F. Shillin, 32, formerly of Eau Claire and now living in Appleton, filed for Chapter 7 at the end of November in U.S. Bankruptcy Court for the Eastern District of Wisconsin.

He had run his own firm, Shillin Wealth Management in Altoona's River Prairie development, from mid-2018 to the end of 2020 when it closed while he was under investigation.

Earlier this month the U.S. Securities and Exchange Commission barred Shillin from the industry, following similar bans imposed by Wisconsin regulators and a nationwide organization that licenses financial advisers. Shillin is currently facing a federal criminal lawsuit on several charges of fraud from his time working as a financial adviser in the Chippewa Valley.

In his petition for bankruptcy, Shillin claims to have about $101,000 in assets, but over $1.86 million in liabilities.

The filing details numerous debts leftover from his defunct financial firm, Shillin's own personal debts and multiple former clients who lodged complaints against him with regulators.

The lengthy list of creditors is topped by several agencies, followed by businesses and individuals he owes from his time as a financial advisor in the Chippewa Valley.

Shillin listed the Internal Revenue Service, U.S. Securities and Exchange Commission and Wisconsin Department of Revenue as creditors he owes, but didn't have a dollar amount to go with them. He did state that he owes $5,000 to the Wisconsin Office of the Commissioner of Insurance.

Of the businesses Shillin owes, the biggest debt is to Northwestern Bank to repay $462,000 in business loans.

Federal COVID-19 pandemic relief programs are also listed as his creditors. Shillin's firm got a $331,000 loan from the Paycheck Protection Program and a $50,000 Economic Injury Disaster Loan.

A Minnesota couple loaned him $250,000 to help pay for attorneys fees, according to his filing.

Alliance Global Partners — the firm Shillin worked under as a broker from his Altoona offices before he resigned from it October 2020 — is owed at least $100,000 due to his business debts.

There are 28 of Shillin's former clients, mostly in the Chippewa Valley, listed as people he owes in the bankruptcy filing as they had lodged complaints against him with the Financial Industry Regulatory Authority.

Amounts Shillin owes ex-clients and for judgments against him are not yet decided, but his bankruptcy filing notes he expects his debts to grow due to fines and restitution.

Shillin's business debts also include credit cards and lines of credit from CHASE, Discover, Ford Motor Credit Co., JP Morgan Chase, SOFI Lending Corp. Resurgent Capital Services and an Anaheim, California, company called Loan Me.

Creditors listed for his personal spending include Citibank, Paypal, U.S. Bank, Wells Fargo and lenders for student loans.

The list of assets Schillin claims show that he's sold or lost some belongings from his time living in the Chippewa Valley.

After selling off an Eau Claire home and Weyerhaeuser cottage last year and splitting the proceeds with his now ex-wife, Schillin is currently renting an apartment for $1,050 a month, according to his filing.

Included in his list of possessions is a 2000 Ford Mustang, a leased 2020 Ford Expedition, personal belongings and home furnishings.

During 2020, a '19 Corvette with an estimated value of $70,000 was repossessed from Shillin.

Shillin's bankruptcy filing also claims he had traded in an autographed Ken Griffey Jr. baseball and collection of vinyl records to pay for legal fees in October.

Between his personal savings and checking accounts, Shillin claimed to have $1,914 in the bank at the end of November.

He did also count $13,000 in assets for his independent contractor business — $1,000 in office equipment and $12,000 in account receivables. Shillin's personal business does magazine advertising sales for a Wisconsin company.

His bankruptcy filing said his only retirement savings was $566 through a California-based company he started working for last year. Shillin works as a development representative for a company that provides software to help restaurants manage their operations.

The largest part of his financial assets in his filing was the expectation he'll be getting $38,000 in tax returns.

Shillin currently faces nine counts of wire fraud and one count of bank fraud in an indictment issued against him in late October in U.S. District Court for the Western District of Wisconsin.

The wire fraud charges are tied to emails Shillin sent to clients about stock buys he didn't actually make for them, misrepresenting costs or benefits of insurance policies, and presenting fraudulent tax documents.

"He kept his clients artificially happy so that they would refer other clients, keep money invested for longer, and invest more money," the indictment states.

At the time Shillin Wealth Management went defunct in December 2020, it was handling 2,992 accounts worth $135.47 million, according to the indictment.

The bank fraud claim is from Shillin for using fraudulent collateral to secure $462,000 in loans from Northwestern Bank during August 2020. According to the lawsuit, Shillin presented to bank executives a statement for an account with $1.2 million in it, but it was money that his clients owned and controlled.

At a Nov. 4 arraignment, Shillin pleaded not guilty to all 10 counts against him.

His next court date is scheduled for June 6. Should the case proceed to a jury trial, one is scheduled for August.

The maximum potential penalty for wire fraud is 20 years in prison per count and for bank fraud it is 30 years per count.

Prior to declaring bankruptcy, Shillin told the court he intended to go on vacation in Colorado during January. The trip got canceled, but Melissa Lach, the pretrial services officer assigned to Shillin, asked the court to impose a bond restriction on Shillin to restrict his travel outside of western Wisconsin — unless he gets prior permission.

"This condition is necessary because Mr. Shillin has been charged with a financial crime, has now declared bankruptcy, and is requesting to spend money on non-discretionary type expenses," Lach wrote in a Jan. 6 report.

U.S. District Judge Stephen Crocker agreed with that and added the restriction to Shillin's conditions of release while the case is pending.

The Leader-Telegram emailed Kathleen Quinn, Shillin's attorney listed in the federal case, last week to seek comment but did not immediately get a response.