John Murphy, Bank Fraud, New York 2023

Fraudulent CEO Faces 30 Years in Prison

John Murphy, the former Chief Executive Officer of Oak Rock Financial, LLC, has pleaded guilty to bank fraud before United States Magistrate Judge Gary R. Brown at the United States courthouse in Central Islip, New York.

The charge arose out of Murphy's scheme to defraud various financial institutions, including Israel Discount Bank, the primary lender to Oak Rock. The losses to these financial institutions and Oak Rock investors are in excess of $100 million.

When sentenced by United States District Judge Leonard D. Wexler, Murphy faces a maximum of 30 years' imprisonment.

The conviction was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

'Murphy abused his position as CEO and defrauded banks out of millions of dollars by lying about his company's financial health,' stated United States Attorney Lynch. 'Today's conviction should act as a warning to executives: if you lie to lenders and investors, you will be investigated and prosecuted to the full extent of the law.'

Oak Rock is a financial lending company located in Suffolk County, New York, that is in the business of securing lines of credit for businesses throughout the United States. Until April 2013, Murphy was the Chief Executive Officer and President of Oak Rock.

During his guilty plea, Murphy admitted to lying to IDB, other financial institutions, and Oak Rock investors regarding the accounts receivable for Oak Rock. Specifically, Murphy admitted that since January 2009, he had been committing fraud by changing delinquency dates to keep collateral and loans current; booking fictitious payments, thereby creating fictitious accounts receivable; and re-aging delinquent accounts receivable by copying data from timely paid accounts so that the loans appeared to have been stable.

Source: https://www.justice.gov/usao-edny/pr/former-chief-executive-officer-financial-lending-company-pleads-guilty-bank-fraud