Greedy Former Insurance Broker Gets 5.5 to 16.5 Years for Ponzi Scheme

A 68-year-old businessman from Pennsylvania will soon be going from his house in the Poconos to the state’s “big house” after his long-running scheme of pocketing millions in premiums without producing policies finally imploded.

According to The Scranton Times Tribune, Brian Murray, the former owner of a Scranton insurance company, is said to have ran a $7.5 million Ponzi scam from a downtown office, right above the Lackawanna County District Attorney’s Office. He was sentenced on September 19^th to 5½ years to 16½ years in state prison.

Mr. Murray and his co-defendants were arrested by the state Attorney General’s Office following a grand jury investigation that uncovered an estimated $10 million “pyramid scheme” that routinely collected money from clients and pocketed it, rather than purchasing the insurance, and then forged documents to cover up the scheme.

For Murray, the lengthy prison sentence has officially ended his public role as a political power broker, philanthropist and patron of the arts. He’s going from a man who handed out turkeys to the less fortunate at Thanksgiving to a man who will wear an orange jumpsuit year round.

The sentencing also sent Mr. Murray’s wife, Diane, to the hospital after she complained of chest pains.

Mrs. Murray cried “I can’t breathe” as she headed for the courtroom door, where she dramatically collapsed after listening to the sentencing judge reprimand Mr. Murray for his claims that his downfall was due to a subordinate who embezzled $700,000.

None of that courtroom drama swayed Judge Richard N. Saxton Jr., the Clinton County senior judge who was called in to hear to the case though. He was clearly unhappy with Mr. Murray’s conduct in the courtroom and as the owner of Murray Insurance, which filed for bankruptcy protection in 2009 and whose building was ironically crowned by a pyramid.

Though he pleaded no contest to a string of theft charges, Mr. Murray essentially told Judge Saxton that he did nothing wrong and blamed the company’s former president, Christine Oliver-Shean, whom he referred to as the “perpetrator.”

“I had nothing to do with the conspiracy,” Mr. Murray told Judge Saxton. “I never benefited. I never made a dime.”

He stated that he was bankrupt.

Mr. Murray said he became aware of that large amounts of money had been stolen by Ms. Oliver-Shean in 2006. He noted, “I put $2.5 million into the agency, trying to keep it afloat because of her theft.”

At one point during the trial, Judge Saxton stated “You still don’t take it seriously” after Mr. Murray turned to say something to his lawyer.  He also told Mr. Murray, “You never took responsibility for your crimes.”

Outside the courtroom, Bill Ruzzo, one of Mr. Murray’s lawyers, was unhappy for a different reason; the sentence.

Ruzzo stated, “The sentence was outrageous.” He repeated the argument that he had made in court earlier that day: Mr. Murray would not have wound up in state prison if “she hadn’t embezzled the money.”

Mr. Ruzzo said Mr. Murray was “robbing Peter to pay Paul” in an effort to keep the business afloat.

“That’s how we got here,” he stated.

Judge Saxton and John Dickinson, the deputy attorney general on the case, said that’s not the whole story of how business was done at Murray Insurance however.

Judge Saxton stated that Mr. Murray pocketed millions of dollars in premiums that businesses used to pay for policies that were not purchased for over a decade before the “pyramid finally collapsed.”

Paul Laurino, who is a Massachusetts lawyer for one of the victims, told Judge Saxton that his company, Philips Healthcare, thought it had insurance coverage after paying Murray Insurance $500,000. He stated that there was no insurance policy however, and that that ended up costing his company another $1.5 million in court cases plus $700,000 to investigate why it didn’t have the coverage.

“He covered his tracks well for a while,” Mr. Laurino said.

Mount Airy Casino Resort and the construction company L.R. Costanzo Co. were also among the victims.

Mr. Murray pleaded no contest to four third-degree felony counts, consisting of criminal conspiracy, two counts of theft by deception, and theft by failure to make required disposition of funds.

His wife, Diane, pled guilty to a single count of criminal conspiracy, which is also a third-degree felony. Before collapsing on the courtroom floor, she had been sentenced to 24 months of probation.

Ms. Oliver-Sheen, who pleaded for probation so she could take care of her learning-disabled son, was sentenced to three months in county prison with the possibility of house arrest, followed by 20 years of probation. She had pleaded guilty to three counts of theft, one count of insurance fraud and one count of conspiracy.