A Stamford man has been sentenced to more than four years in prison for stealing more than $3 million through a hedge fund scheme.
Justin C. Murphy, 50, faced sentencing on Tuesday in federal court in New Haven, according to the U.S. Attorney’s Office for the District of Connecticut. A judge ordered that his 54-month prison sentence will be followed by three years of supervised release.
According to federal officials, Murphy owned and operated Greenwich-based Mara Investment Group, LLC, which was also known as Mara Investment Management LP and Mara Investments Global Management LLC (“Mara”). Federal officials said Murphy purported the group to be a hedge fund that solicited investments and used a “quantitative strategy that balanced long and short positions in securities.”
Between 2016 and September 2022, Murphy allegedly defrauded investors by pursuing a much riskier investment strategy than he disclosed to them. He also allegedly diverted “substantial investor funds for his own personal use and benefit” and told investors that their funds were performing much better than they were, officials said.
According to officials, Murphy provided investors with account statements that falsely represented their account balances as well as federal tax forms that falsely reported business income for which the investors would need to pay taxes.
Through the scheme, federal authorities allege Murphy stole about $3.5 million, which he used for personal expenses and to purchase a personal stake in his relative’s startup company. Officials said he also used the money to fund nearly a year of living in luxury hotels in Brazil while avoiding investor complaints and lawsuits.
A judge on Tuesday ordered him to pay about $3.7 million in restitution, which includes losses to an additional investor who had placed money with Murphy before the scheme.
Murphy was arrested in Brazil on Dec. 6, 2023, and was detained for nearly 11 months while awaiting extradition to the U.S. On April 29, he pleaded guilty to one count of wire fraud and one count of money laundering.
Murphy is free on a $250,000 bond and is required to report to prison on Oct. 15.
