FTC Criminal Case
United States v. Murkey, Crim. No. 04-CR-167 (C.D. California)
Most Recent Update 11/22/05 (See end of document)
The Consumer Protection Branch of the United States Department of Justice and the United States Attorney's Office for the Central District of California, in coordination with the Federal Bureau of Investigation and the Federal Trade Commission ("FTC"), conducted a nationwide investigation into conduct by Richard Murkey, Sr., that amounted to criminal contempt of a court order issued by the United States District Court for the Central District of California. That order, entered on November 3, 1999, banned Mr. Murkey from:
- participating in the advertising, promoting, offering for sale, sale, performance, or distribution of any credit repair service;
- representing that he can or will substantially improve consumers' credit reports or profiles by effectuating the permanent lawful removal of bankruptcies, liens, judgments, charge-offs, late payments, foreclosures, repossessions, and other negative information from consumers' credit reports where such information is accurate and not obsolete; and
- violating the Credit Repair Organization Act, which, in turn, prohibits making any untrue or misleading statement with respect to any consumer's credit worthiness, credit standing, or credit capacity to any consumer reporting agency as defined in 15 U.S.C. Â§ 1681a(f).
On February 17, 2004, Mr. Murkey was indicted on nine charges of criminal contempt of court. Mr. Murkey voluntarily surrendered and appeared for his initial appearance on February 23, 2004. At that hearing, Mr. Murkey was released on $25,000 bond. Among other conditions of release, Mr. Murkey was required to turn in his passport.
According to the charges against him in the indictment, Mr. Murkey continued to offer credit repair services immediately after entry of the court order, through businesses such as "Credit Restoration Corporation of America, Inc." In 2001, the FTC brought a civil contempt case against Mr. Murkey and a District Judge in Los Angeles held Mr. Murkey in civil contempt. Nevertheless, the indictment alleges that Mr. Murkey returned to credit repair services several months after the civil contempt finding, operating in a clandestine fashion and using the bank account of another person to operate the business.
One count of the Indictment alleges that Mr. Murkey unlawfully engaged in credit repair services before the civil contempt finding, and another alleges that he unlawfully engaged in credit repair after that finding. Three counts in the indictment allege that, contrary to the court order, Mr. Murkey told consumers that he could substantially improve their credit reports by lawfully and permanently removing negative information from the reports, regardless of whether the information was accurate or obsolete. Four counts allege that Mr. Murkey violated the order by causing false and misleading statements to be sent to Trans Union in an effort to have negative information removed from customers' credit reports.
The next scheduled event in the case is the post-indictment arraignment, set for March 22, 2004.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.
On April 19, 2004, Richard Murkey, Sr., pled guilty to four counts of the indictment discussed above. Those counts charged Murkey, Sr., with criminal contempt for:
(a) participating in credit repair from at least January 2000 through June 2001,
(b) making prohibited representations to consumers,
(c) misrepresenting facts to consumer reporting agencies,
(d) returning to the practice of credit repair from at least February 2002 through July 2003, after the court found him in civil contempt.
Murkey, Sr., is on release pending his sentencing hearing, currently scheduled July 12, 2004, at 1:30 p.m. before Judge Otero.
The U.S. Probation Officer is required to prepare a presentence investigation report which includes a section assessing the financial, social, psychological, and medical impact of the crime on any individual against whom the offense was committed. A package of materials may be sent to individuals identified by the government as victims of the offense. If you receive such materials, please complete them as soon as possible and return them to the government representative identified in the paperwork.
Murkey, Sr., is on release pending his sentencing hearing, which was postponed from the July 12, 2004, date and is now currently scheduled for November 8, 2004, at 8:30 p.m. before Judge Otero.
The previously scheduled sentencing hearing for Murkey, Sr., before Judge Otero has now been rescheduled for February 7, 2005 at 8:30 p.m.
On February 28, 2005, Judge S. J. Otero sentenced Richard Murkey to fifty-one (51) months' imprisonment, five years supervised release and $126,000 in restitution. Under federal law, restitution is ordered in criminal cases, in general, on the basis of losses a defendant causes and without regard to the defendant's ability to pay the restitution. See 18 U.S.C. Sec. 3664(f)(1)(A), which provides: "In each order of restitution, the court shall order restitution to each victim in the full amount of each victim's losses as determined by the court and without consideration of the economic circumstances of the defendant."
Any payments made by Murkey will go to the Court and will then be shared equally among the victims. Any amount due a victim shall be reduced by any amount the victim recovers for the same loss from any other source. If you have any questions regarding the restitution order, please contact the Probation Officer.
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