Former Mortgage Broker Pleads Guilty in Real Estate Investment Scheme
March 10, 2010 – (RealEstateRama) — The Maine Office of Securities and Maine Attorney General’s Office announced that Eric S. Murphy, Jr., formerly of Ellsworth, pled guilty on March 2nd in Hancock County Superior Court to two counts of Class B felony theft by deception in connection with an investment scam Murphy ran to fund 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Murphy, a former mortgage loan broker whose license was revoked by the Bureau of Consumer Credit Protection in April, 2009, pled guilty to charges that he took approximately $570,000 from five investors under false pretenses between July 2006 and April 2008. During the plea hearing, Assistant Attorney General Michael J. Colleran explained that the evidence shows that instead of using funds received from investors to fund specific mortgage loans, as he had represented he would, he used the bulk of the proceeds to meet his own business and personal obligations.
Murphy is scheduled to be sentenced at the end of March. Under the plea agreement, both sides will recommend a sentence of four years, with all but 18 months suspended, three years of probation, and full restitution to victims. The presiding judge will determine the sentence, and Murphy will have the opportunity to withdraw his guilty pleas and go to trial if the judge is inclined to impose a more severe sentence than is recommended.
Office of Securities Administrator Judith M. Shaw 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 takes these cases very seriously and works aggressively to protect the public. It is essential for consumers and investors to thoroughly check out the background and licensure of any individual offering an investment or other financial arrangement, whatever the nature of the business.”
Attorney General Janet Mills stated that “Mr. Murphy’s business apparently got into financial trouble, and then he defrauded investors in an attempt to keep the business going. We have seen this sort of scam several times since the economic crisis began. We will not tolerate people, like Mr. Murphy, who prey upon Maine investors.”
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
Judith M. Shaw, Securities Administrator