Mortgage broker pleads guilty to theft charges

By Bill Trotter, BDN Staff
Posted March 10, 2010, at 6:51 p.m.

ELLSWORTH, Maine — A Surry man has pleaded guilty to felony charges of theft and is expected to be sentenced in Hancock County Superior Court later this month.

Eric S. Murphy Jr., 48, is a former mortgage loan broker whose license was revoked in April 2009. He is accused of stealing more than a half-million dollars from five investors between July 2006 and April 2008, according to a prepared statement released Wednesday by the Maine Office of Securities. Instead of using the investors’ money to fund specific mortgage loans, as he had told them he would, he spent the money on business and personal expenses, the statement indicated.

Murphy pleaded guilty to the charges on March 2. Each theft charge is a Class B offense, which is punishable by up to 10 years in prison and a fine of up to $20,000.

Both prosecutors and Murphy’s defense attorney, Jeff Toothaker of Ellsworth, are expected to recommend that Murphy be sentenced to four years behind bars with all but 18 months suspended, according to the release. The recommended plea agreement also includes three years probation and an order to repay the victims in full.

The plea agreement has not been accepted by a judge, however, and does not have to be accepted by the court. If Murphy ends up receiving a stiffer sentence, he will be able to withdraw his guilty pleas and proceed toward trial, according to attorneys involved in the case.

Toothaker, contacted Wednesday evening, said the amount of money his client stole is “over $400,000.” He said Murphy had been running a legitimate business but that some construction projects ran over budget. This led to financial problems that Murphy did not properly address, he said.

“I think it could have been fixed early on,” Toothaker said of his client’s financial complications. “He didn’t start out to be dishonest. Circumstances led him that way.”

In the prepared statement, Judith M. Shaw, administrator of Maine Office of Securities, said the case demonstrates that investment scams can take many forms. She urged consumers and investors to verify the background and accreditation of anyone who might offer them any type of investment opportunity or financial arrangement.

People who have questions about the background of any such person or firm can contact the Office of Securities at 877-624-8551.

Maine Attorney General Janet Mills said in the statement that other money problems explain but do not excuse Murphy’s misdeeds.

“Mr. Murphy’s business apparently got into financial trouble and then he defrauded investors in an attempt to keep the business going,” Mills said. “We have seen this sort of scam several times since the economic crisis began. We will not tolerate people, like Mr. Murphy, who prey on Maine investors.”

http://bangordailynews.com/2010/03/10/news/mortgage-broker-pleads-guilty-to-theft-charges/ printed on December 27, 2014