Phoenician Sentenced For Federal Fraud, Money Laundering Charges

Timothy Murphy, age 34, of Phoenix, was sentenced to 54 months in prison in connection with a multi-count indictment arising from a fraudulent telemarketing enterprise that often targeted elderly victims. Multiple individual victims of the scheme lost more than $50,000.  Two individual victims lost more than $200,000.

Ninety-one Missouri residents are among the approximately 4,000 victims including residents of Chesterfield, University City, St. Louis, Hannibal, Arnold, Potosi, Ballwin, Valley Park, Florissant, O’Fallon, St. Clair, and Farmington.

On February 22, 2018, Timothy Murphy, a/k/a Mr. Black, a/k/a Colby Muhlberg, a/k/a Arthur Whitton, pled guilty to one count of wire fraud in connection with telemarketing and one count of conspiracy to commit money laundering before United States Judge John Ross.  As led by Defendant Michael McNeill, Defendant Joshua Flynn and Defendant Murphy, and others, the telemarketing enterprise sold false and fictitious business opportunities as part of a scheme that reached across the United States and Canada and generated in excess of $28,000,000 in fraudulent sales.  From 2012 through 2015, the Phoenix, Arizona based telemarketing enterprise operated under multiple business names and utilized multiple business entities over the course of the scheme, including Smart Business Pros LLC of Warson Woods, Missouri. The sophisticated money laundering activity of the telemarketing enterprise included transfers designed to promote and conceal their fraud and also to enrich the owners, organizers and leaders of the enterprise.

In October 2016, nine individuals were initially indicted. In February 2017, an additional ten individuals were indicted.  In July 2017, an additional individual was indicted.  All twenty defendants have now pled guilty and have been sentenced for one or more offenses arising from the scheme to defraud and money laundering.  Defendants in the case were sentenced to a combined total of 595 months’ imprisonment.  All defendants were ordered to pay restitution to the victims and ordered to forfeit assets.  To date, approximately $1,000,000.00 has been paid toward restitution.  In addition, the United States has identified numerous assets for forfeiture in this case, including more than $300,000 in cash seized from various defendants, Rolex and Breitling watches, more than 80 gold and silver coins, a 2015 Jaguar F-Type coupe, numerous firearms, private equity holdings, and an interest in a luxury home in Phoenix, Arizona.

Assistant Inspector in Charge James Ball stated, “The defendants in this large scale and sophisticated fraud targeted this nation’s elderly citizens.  This investigation is fair warning to such criminals that the U.S. Postal Inspection Service is committed to protecting the vulnerable and bringing those who would victimize them to justice.”

“Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money,” said Steven Slazinik, Acting Special Agent in Charge of IRS Criminal Investigation.  “Those who engage in this type of fraud against the elderly should know they will not go undetected and will be held accountable.”

In addition to Mr. Murphy’s sentence of 54 months imprisonment, other defendants were sentenced to terms of imprisonment as follows:  on March 6, 2018, Michael McNeill, a/k/a Mr. White, a/k/a Todd Lockwood, 48, of Phoenix, Arizona, was sentenced to 120 months in prison; on March 6, 2018, Joshua Flynn, a/k/a Mr. Pink, a/k/a Jeff Thomas, 36,  of Chandler, Arizona, was sentenced to 84 months in prison; on March 1, 2018, Donald Schnock, 34, of Phoenix, Arizona, was sentenced to 60 months in prison; on March 7, 2018, Shawn Casey, a/k/a Shawn Anderson, a/k/a Daniel Arenson, 41, of Phoenix, Arizona, was sentenced to 50 months in prison; on March 8, 2018, Thomas Silha, a/k/a Keith Henderson, a/k/a Dave Marsh, 56, of Phoenix, Arizona, was sentenced to 50 months in prison; on March 7, 2018, Bruce Doll, 52, of Las Vegas, Nevada, was sentenced to 48 months in prison; on April 10, 2018, Scott Shocklee, a/k/a Fredo, 40, of Phoenix, Arizona, was sentenced to 36 months in prison; on May 4, 2018, Ashley Powell, a/k/a Brittany Wilson, 26, of Phoenix, Arizona, was sentenced to 30 months in prison; on March 8, 2018, Russell Hibbert, 44, of Phoenix, Arizona, was sentenced to 24 months in prison; on April 19, 2018, Jason Gallagher, 36, of Gilbert, Arizona, was sentenced to 24 months in prison; and on March 7, 2018, Brian Phillips, 28, of Tempe, Arizona, was sentenced to 12 months in prison.

This case was investigated by the, United States Postal Inspection Service, IRS Criminal Investigation, the Federal Bureau of Investigation, and the Office of the Arizona Attorney General. Assistant United States Attorneys Charles Birmingham, Gwendolyn Carroll, and Kyle Bateman prosecuted the case for the U.S. Attorney’s Office.  “These inspectors, agents, and prosecutors were persistent.  They worked in close coordination and simply never gave up until the last one was sentenced,” said U.S. Attorney Jeff Jensen.