Former Mortgage Broker Convicted in Real Estate Investment Scheme

July 30, 2010

by Maine RealEstateRama

July 30, 2010 – (RealEstateRama) — A Hancock County Superior Court jury convicted Eric S. Murphy, Jr. of Ellsworth on Wednesday in connection with an investment scam Murphy ran in conjunction with his residential construction loan business. Murphy, a former mortgage loan broker whose license was revoked by the Bureau of Consumer Credit Protection in April, 2009, was found guilty of taking approximately $450,000 from 4 investors under false pretenses during the period October, 2006 through April, 2008. Instead of using funds received from investors to fund mortgage loans for consumers, Murphy used the bulk of the proceeds for his own business and personal purposes.

Murphy was convicted on all four counts of the indictment, which charged Murphy with one count each of securities fraud and forgery and two counts of theft by deception. Immediately following the verdict, Justice Kevin Cuddy sentenced Murphy to 9 years of imprisonment with all but 5 years suspended. Justice Cuddy also ordered Murphy to pay restitution to his victims in the amount of $358,000. Earlier this year, Murphy pleaded guilty to two counts of theft by deception, but withdrew his plea after the Court rejected the sentence recommended in the plea agreement.

Office of Securities Administrator Judith M. Shaw praised the verdict and commented that “the Murphy case highlights the fact that investment scams can occur in many different contexts, including real estate development and financing. The Office of Securities vigorously pursues cases involving investment fraud and misconduct in whatever context to protect investors and deter those who would try to profit from dishonesty.”

Maine Attorney General Janet Mills stated “our Office and the Office of Securities will not tolerate conduct that defrauds investors. The jury convicted Murphy on all counts and soundly rejected Murphy’s claims that he simply ‘got in over his head’ and did not intend to deceive his clients. This was not simply a poor business decision; this was cheating and stealing.”

Consumers are encouraged to contact the Office of Securities at 1-877-624-8551 to check out any person or firm offering any kind of investment; the Office of Securities is part of Maine’s Department of Professional and Financial Regulation, which encourages sound ethical business practices through the regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can learn more about the Department online at www.maine.gov/pfr.

Contact:
Judith M. Shaw, Securities Administrator
1-877-624-8551