A 70-year-old Orange County man has been sentenced to eight years in federal prison for running a Ponzi scheme that bilked more than two dozen investors out of nearly $3 million.
The Orange County Register reports Timothy Melvin Murphy was also ordered Tuesday to pay $2.95 million in restitution.
Murphy pleaded guilty last year to one count of mail fraud. Prosecutors say he ran the scheme through his Orange-based business, Capital Investors Inc. The government estimates Murphy’s 26 victims lost $2.95 million they invested over a decade.
Murphy used the money for personal expenses, including refurbishing and maintaining a classic car collection. He also paid for treatments at a weight-loss clinic. Murphy retired as a colonel in the California Army National Guard in 2006.
FINRA arbitration is a dispute resolution process used to resolve conflicts between investors and securities firms. Administered by the Financial Industry Regulatory Authority (FINRA), this process offers a faster, less formal alternative to court litigation. It involves a neutral panel of arbitrators who review evidence and make binding decisions. Unlike mediation, where parties work together to find a solution, arbitration results in a definitive ruling. This process is particularly useful for resolving disputes over broker misconduct, unsuitable investment recommendations, or contractual issues. Investors and firms agree to arbitration through pre-dispute clauses in account agreements. The process is designed to be fair and impartial, providing a platform for both parties to present their cases. FINRA arbitration offers confidentiality and can be less costly compared to traditional litigation, making it a practical choice for many seeking justice in the financial sector.
