Patrick Reily Murphy, Jr.,a former Fairhope insurance broker, must serve 18 months in a federal prison on charges of bank fraud and mail fraud, and pay more than $3.6 million in restitution, according to documents filed in federal court last month.
Chief District Judge Jeffrey Beaverstock presided over the sentencing hearing on Thursday, Aug. 25, in which the president and owner of RTR Holdings, Inc. pleaded guilty to both counts.
Murphy also owned and managed the independent insurance agencies Point Clear Insurance Partners, LLC. (PCIP) and Point Clear Insurance Services, LLC. (PCIS), groups “that brokered insurance policies on behalf of clients, many of whom operated in the marine and transportation industries,” according to the plea agreement.
Murphy “knowingly and intentionally made material misrepresentations” to Providence Bank when he applied for a loan of more than $1.8 million “to finance business and personal expenses” on behalf of RTR Holdings, PCIP and PCIS between March 2019 and July 2020, according to the agreement.The information Murphy provided “was not all true and correct, was misleading, and contained material omissions,” the document read. He falsely represented RTR Holdings made $1.7 million annually, did not disclose a 2018 loan of $100,000 from Inland and Coastal Premium Finance Company and misrepresented the bank charges RTR Holdings paid for “numerous business checks that bounced,” among other charges.
Murphy also misrepresented that PCIS “would forward premiums paid by its clients to insurance companies or brokers,” the document read, when the company actually kept more than $1 million “instead of forwarding the premiums to the insurance companies or brokers as promised” between 2017 and 2020.
“The Murphy family and their entire community of family, friends, and church are relieved that this nightmare is over,” John Beck, who represented Murphy, wrote in an email to Lagniappe. “They have endured great loss due to the collateral consequences of a failed business, as have innocent victims.”
He wrote pleading guilty was a difficult decision for Murphy to make, but noted the standards behind the charges were legally sufficient.
“He has always acknowledged his responsibility to those innocent victims who deserve restitution, and he will honor his commitment to make them whole,” Beck wrote.
The family is also relieved, Beck wrote, that the court took Murphy’s “entire body of great character, service to his community, and unprecedented mitigating circumstances into heavy account” and “pronounced a sentence that will reunite Mr. Murphy with his wife and four children in a relatively short period of time.”
The court recommended Murphy be incarcerated “as close to his home as possible.”
Bank fraud usually comes with a term of 30 years imprisonment and a fine of $1 million, and mail fraud with a term of 20 years imprisonment and a fine of $250,000.
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