Former Bay Area Resident Indicted In Investment Fraud Scheme
John Bryan Murphy Arrested for Wire Fraud and Money Laundering in Ponzi-Style Investment Fraud Scheme
SAN FRANCISCO – A former Bay Area resident was arrested yesterday in Barnstable, Massachusetts on charges related to a long-running investment fraud scheme. John Bryan Murphy was charged on November 30, 2017, by a federal grand jury in San Francisco with wire fraud and money laundering announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett. The indictment was unsealed late yesterday following Murphy’s arrest.
According to the indictment, between 2012 and 2017, Murphy, 44, who currently resides in Massachusetts, solicited investments from numerous individuals on the premise that their money would be professionally invested. After receiving these solicitations, several victim investors provided funds to Murphy for the purpose of allowing him to invest those funds on their behalf. In fact, Murphy primarily used these “investments” to support his personal lifestyle, to speculate on the stock market in an account in his name, and/or to repay other victims a portion of their investments.
The indictment alleges that Murphy made payments to various victims that were designed to lull them into a false sense of security, lead them to believe that the promises made to them would be fulfilled, postpone or prevent the victims’ complaints to law enforcement, conceal and prevent detection of the scheme and artifice, and induce victims to “invest” more money with Murphy. The indictment alleges that Murphy obtained over $700,000 in fraudulently solicited funds from victims of the scheme.
The indictment charges Murphy with ten counts of wire fraud, in violation of 18 U.S.C. § 1343, and two counts of money laundering, in violation of 18 U.S.C. § 1957.
After his arrest, Murphy made his initial appearance in United States District Court in Boston, Massachusetts, and was detained pending further proceedings. A detention hearing is scheduled for Friday, December 8, 2017, before Magistrate Judge Donald L. Cabell in Boston.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment on each wire fraud count and 10 years’ imprisonment on each money laundering count, fines of $250,000 on each count in the indictment, and restitution for the losses he is alleged to have caused. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorneys Robert Rees and Kyle Waldinger are prosecuting the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation.