Central Islip, NY - August 18, 2015 - Earlier today, John Murphy, the former Chief Executive Officer of Oak Rock Financial, LLC (Oak Rock), was sentenced in federal court in Central Islip, New York to 97 months of imprisonment. In December 2013, Murphy pled guilty to bank fraud after admitting that he had been lying to various financial institutions and investors regarding Oak Rock’s financial health since January 2009.
The sentence was announced by Kelly T. Currie, Acting United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistance Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“By making fraudulent representations with respect to Oak Rock’s financial position, Murphy caused financial institutions and private investors to suffer millions of dollars in losses,” stated Acting United States Attorney Currie. “Those who defraud others will be held accountable for their actions.” Mr. Currie expressed his appreciation to the New York State Department of Financial Services for its assistance in the investigation.
Oak Rock, a financial lending company located in Suffolk County, New York, secured lines of credit for businesses throughout the United States. During his time as Chief Executive Officer, Murphy misled banks about the state of Oak Rock’s financial health by providing them with false documentation concerning businesses that failed to make timely payments on their loans or that were in default. Murphy, who was compensated $600,000 a year, failed to address the defaulting loans and instead operated Oak Rock as if it were a sound financial organization through lies and deception. Specifically, he defrauded the banks by changing delinquency dates to make it appear that loans were current; booking fictitious payments, thereby creating fictitious accounts receivable; and falsifying delinquent accounts receivable by copying data from timely paid accounts so that the defaulting loans appeared to be timely paid and stable. These misrepresentations caused Israel Discount Bank, Oak Rock’s primary lender, as well as other financial institutions and private investors, to sustain losses totaling in excess of $93 million.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
The sentence was imposed by United States District Judge Leonard D. Wexler.
The case is being prosecuted by the Office’s Long Island Criminal Division. Assistant United States Attorney Michael P. Canty is in charge of the prosecution.
- JOHN MURPHY
- Age: 65
- Nesconset, New York