A federal grand jury in New Haven has returned a 23-count indictment charging Justin C. Murphy, 49, of Stamford, with offences stemming from an alleged investment fraud scheme.
The indictment was returned on September 22, 2022. Murphy, who was extradited from Brazil, appeared on November 1, 2024, before U.S. Magistrate Judge Thomas O. Farrish in Hartford, pleaded not guilty to the charges and was released on a $250,000 bond.
Murphy had been detained in Brazil since his arrest on December 6, 2023.
As alleged in the indictment, Murphy owned and operated Greenwich-based Mara Investment Group, LLC, also known as Mara Investment Management LP and Mara Investments Global Management LLC, which Murphy purported to be a hedge fund that solicited and accepted investments and used a quantitative strategy that balanced long and short positions in securities.
Between approximately 2016 and September 2022, Murphy defrauded investors by pursuing a much riskier investment strategy than he told investors; diverting substantial investor funds for his own personal use and benefit; representing to investors that their invested funds were performing more favourably than was, in fact, the case, including providing investors with account statements that falsely representing their account balances; and providing investors with federal tax forms that falsely reported business income upon which investors would be required to pay tax.
It is alleged that Murphy stole approximately $3.5 million in investor funds through this scheme and used the funds to pay for personal expenses and to purchase a personal stake in his relative’s startup company.
The indictment charges Murphy with 15 counts of wire fraud, an offence that carries a maximum term of imprisonment of 20 years on each count; five counts of money laundering, an offence that carries a maximum term of imprisonment of 10 years on each count; and three counts of tax evasion, an offence that carries a maximum term of imprisonment of five years on each count.
Per the extradition agreement with Brazil, the government has agreed not to pursue the tax evasion charges against Murphy.
