Dutchess attorney accused of stealing $450,000 from trust funds

A Dutchess County Court grand jury has indicted a disbarred Hopewell Junction attorney for allegedly embezzling more than $450,000 from elderly and vulnerable clients he had represented as their guardian and trustee.

The grand jury charged John Ferdinand Murphy, III on Dec. 14 with five counts of grand larceny and one count of a scheme to defraud from 2015 through 2021.

Murphy, 68, has practiced real estate law and operated a real estate brokerage and development firm, Samron Resources LLC, for 18 years, according to his LinkedIn profile.

For nearly seven years as a court appointed guardian and trustee for incapacitated individuals, he allegedly took advantage of his role to line his pockets.

The alleged scheme began to unravel when Dutchess Surrogate Court judge Michael G. Hayes noticed discrepancies in the handling of a special needs trust.

Murphy was appointed trustee of the Nadja Colvin trust in 2016 and was required to file annual accounting reports. When he failed to file reports for 2017 and 2018, Hayes directed him to appear for a hearing in 2019.

Murphy admitted that he had paid himself $80,000 from the Colvin trust, according to a Second Appellate Division disciplinary record. He told judge Hayes that the money had been “waylaid” but he did not know where the funds went. He also offered evidence that even more money had been misplaced or misdirected but was unable to explain what happened to the money.

Hayes directed Murphy to file the 2017 and 2018 accounting reports, but he failed to do so and he failed to show up for another hearing.

Judge Hayes surcharged Murphy for $189,439, removed him as the trustee, and referred the matter to an attorney grievance committee and prosecutors.

Murphy told the grievance committee that he had deposited the $80,000 Colvin Trust check into his attorney escrow account at Hudson Valley Credit Union, and then “lost track of it.”

The grievance committee also considered a complaint from Jimmy Nunez of Valley Capital Partners in Valley Stream, Nassau County.

He claimed that he had made a $10,000 down payment to Murphy on a deal to buy a house in Jamaica, New York from Murphy’s client, Marie T. Price, according to the appellate court record. Then Murphy stopped communicating about a closing date and did not return the check.

Murphy deposited the check in a credit union account, and four months later the account had a negative balance. He failed to provide any records to the grievance committee or explain why he deposited trust funds into his business account.

The grievance committee recommended that Murphy be suspended from practicing law, “upon a finding that he is guilty of professional misconduct immediately threatening the public interest.”

The Second Appellate Division accepted the motion in August 2021, and then the following December disbarred Murphy on 27 charges of professional misconduct, including misappropriating funds; commingling funds; failure to maintain client funds and bookkeeping records; and “dishonesty, fraud, deceit or misrepresentation.”

Attorney General Letitia James and New York State Police and others handled the investigation that was brought to the grand jury.

They accused Murphy of embezzling more than $450,000, in a joint press release, including more than $350,000 in checks that he allegedly paid to himself.

The press release refers to an unnamed victim who was an 89-year-old retiree and family friend of Murphy’s. They said his failures to pay his client’s expenses caused her utilities to be shut off multiple times and led to a foreclosure proceeding. The New York City Justice Center helped the client remain in her home.

The attorney general and state police announced Murphy’s arrest on Dec. 19. He was arraigned by Dutchess County Court Judge Edward McLoughlin and released from custody with electronic monitoring.

Murphy did not reply to an email asking for his side of the story.