Patrick Reily Murphy Jr., the president of RTR Holdings and a prominent Eastern Shore insurance broker, has been arrested and charged with 13 counts of insurance fraud, according to indictments unsealed in Baldwin County this morning. Allegedly, late last month, a grand jury found probably cause that Murphy, on multiple occasions, did “knowingly and with intent to defraud, commit the embezzlement, abstraction, theft, or conversion of monies, funds, premiums, credits, or other property relating to the transaction of the business of insurance of an insurer, reinsurer, or other person engaged in the transaction of the business of insurance.”
A spokesman for the Baldwin County District Attorney’s Office said they could not currently provide more information because the investigation is ongoing, but the agency is coordinating with the Alabama Department of Insurance (ADOI). The ADOI did not immediately return a call seeking comment. The Baldwin County Sheriff’s Office notes Murphy was arrested yesterday and released hours later on $5,000 bond.
First degree insurance fraud, a Class B felony, imposes a sentencing guideline of two to 20 years in prison upon conviction. According to the indictment, the 13 victims in the case, all of whom were allegedly defrauded of “more than $1,000,” are:
• Bass Underwriters
• Burns & Wilcox
• Commercial Sector Insurance Brokers, LLC
• Gray & Company
• OneBeacon Insurance Group
• Navigators Management Company
• Ascot Insurance Co.
• AmWINS Brokerage of Tennessee
• Alabama Municipal Insurance Co.
• All Risks of California Insurance Services LTD.
• Inland & Coastal Premium Finance Co.
• Xl Specialty Insurance Co doing business as XLA XL
Court records also indicate Murphy’s RTR Holdings, the parent of company of Point Clear Insurance Services, LLC, Point Clear Insurance Partners, LLC and PRM Real Estate, LLC, is the subject of a 2019 civil complaint in which it — along with a number of other named defendants, some of which were also allegedly defrauded by Murphy — defaulted on a $1.8 million loan from Providence Bank “to satisfy prior indebtedness.”
Separately, Murphy was also the subject of a breach of contract complaint earlier this year in which Century Bank sought to collect on a $250,000 loan Murphy allegedly defaulted on through PRM Real Estate, less than a year after drawing it.
In both cases, Murphy has since been dismissed as an individual defendant, noting he filed for Chapter 7 bankruptcy protection. In the bankruptcy case, Murphy lists assets of $51,201.82 against liabilities of $4,242,514.87.
A complaint filed by Inland & Coastal Premium Finance Co. against Murphy in the bankruptcy case goes into more detail, alleging he “received and wrongfully detained monies, via returned prepaid insurance premiums, due and owing to [Inland] for personal gain, to pay off insurance premiums for other clients and/or to pay personal or business debt.”
An email message to Murphy this afternoon was not immediately returned, but Lagniappe will update this story as it develops.
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