Prior Federal Fraud Convict Arrested on New Charges of Bank Fraud, Wire Fraud, and Aggravated Identity Theft

RALEIGH – United States Attorney Robert J. Higdon, Jr. announced that last Thursday in federal court, CHARLES GILBERT MURPHY, 63, of Apex, NC, was charged in a 26-count federal indictment alleging various acts of Bank Fraud, Wire Fraud, Making False Statements on a Loan, Making False Statements to the FBI, Aggravated Identity Theft, and Subscribing to False Tax Returns.  He was arrested by the FBI today in Raleigh.

The Indictment alleges that MURPHY, both directly and through the use of various entities and individuals, engaged in a number of frauds and schemes to cause individuals and businesses to part with their money.

The Indictment alleges that MURPHY was subject to collection efforts by the United States Government arising from a prior federal conviction for Wire Fraud in June of 1999 in this same district.  As such, the Indictment alleges that MURPHY caused family members to open bank accounts for him in the name of various companies he controlled, referred to in the Indictment as the “Murphy Entities.”  These entities were Toxic Solutions LLC (“Toxic Solutions”), Biological Marine Remediation LLC (“Bio-Remediation”), Bio Marine Remediation LLC (“Bio-Marine”), Bio Separation Systems, LLC (“Bio-Separation”), On-Site Solutions LLC (“On-Site Solutions”), and On-Site Technologies LLC (“On-Site Technologies”).

The Indictment alleges that MURPHY used the bank accounts in the name of the Murphy Entities to conduct his personal business.  In particular, the Indictment alleges that in an effort to obtain loan proceeds from banks and lenders, Murphy created and caused to be created various false documents which were given to bank and lender underwriters and agents in support of loans.  Such false documents included false bank statements for Toxic Solutions, false tax returns for Toxic Solutions, and false statements regarding revenue.

In addition to his attempts to obtain lender monies using false documents, the Indictment alleges that MURPHY also used the Murphy Entities to obtain money from individuals and entities under false and fraudulent pretenses.  According to the Indictment, MURPHY represented that the Murphy Entities performed environmental cleanup activities, such as water remediation.  MURPHY purported to offer to various entrepreneurial victims the opportunity to purchase exclusive rights to perform environmental cleanup services in a given geographic area.  MURPHY also purported to sell the equipment necessary to perform the cleanup services.  In furtherance of the scheme, MURPHY frequently presented false documents to the entrepreneurs to make it appear that funds had been allocated for services to be performed in the geographic area where the victims had purchased the exclusive rights.  In reality, the documents justifying the exclusive rights purchase were falsified, and MURPHY took the money without providing all of the equipment purchased.

The Indictment asserts that after MURPHY conducted the scheme in the name of one of the Murphy Entities, he shifted the scheme to one of the other Murphy Entities to perpetuate the fraud.  MURPHY also began to use some of the Murphy Entities for the purposes of obtaining merchant cash advances from commercial lenders.  In doing so, MURPHY misrepresented, among other things, the revenues of his company, and the fact that he had obtained other merchant cash advances.

In addition to the foregoing schemes upon lenders and individuals, the Indictment also alleges that MURPHY conducted a fraud upon banks by presenting and causing to be presented to the banks numerous false and fraudulent checks.

In July of 2018, the Federal Bureau of Investigation interviewed MURPHY concerning the foregoing schemes.  After being warned that lying to the FBI was a federal offense, the Indictment charges that MURPHY nevertheless made numerous materially false and fraudulent statements during the interview.

Lastly, the Indictment alleges that in the midst of carrying out the aforementioned frauds, MURPHY was also filing false tax returns.  The Indictment alleges that despite receiving substantial sums of cash from the Murphy entities, MURPHY never included this information on his tax returns.

If found guilty, the maximum punishment for Bank Fraud and Making False Statements on a Loan is up to 30 years in prison.  The maximum punishment for Wire Fraud is up to 20 years in prison.  The maximum punishment for Making False Statements to the FBI is up to 5 years in prison.  The maximum punishment for Subscribing to False Tax Returns is up to 3 years in prison.  The maximum punishment for Aggravated Identity Theft is not less than, nor more than 2 years in prison consecutive to any other term of imprisonment imposed.

The Government continues to investigate all losses associated with the frauds alleged in the Indictment.  If you feel that you may have been a victim of any of these offenses, and have not already reported losses to the Government, please contact the FBI or the US Attorney’s Office.

An Indictment is an allegation of a crime.  The defendant is presumed under the law to be innocent until proven guilty.

The Federal Bureau of Investigation, the Internal Revenue Service - Criminal Investigation and the North Carolina Department of the Secretary of State investigated this case.  Assistant United States Attorney William M. Gilmore represents the United States.