HARTFORD – A Greenwich investment management firm owner who appeared in federal court Nov. 1 is now facing criminal charges stemming from an alleged investment fraud scheme, according to top officials with the offices of U.S. Attorney District of Connecticut, FBI and IRS.
Vanessa Roberts Avery, U.S. Attorney for the District of Connecticut; Robert Fuller, special agent in charge of the New Haven Division of the FBI; and Harry T. Chavis Jr., special agent in charge of IRS Criminal Investigation in New England, today announced that a federal grand jury in New Haven has returned a 23-count indictment charging Justin C. Murphy, 49, of Stamford, with defrauding investors. He operates Mara Investment Group LLC, which has offices at 125 Greenwich Av. Suite 3 in Greenwich.
The indictment was originally returned on Sept. 22, 2022. Murphy, who was extradited from Brazil and appeared on Nov. 1, 2024 before U.S. Magistrate Judge Thomas O. Farrish in Hartford, pleaded not guilty to the charges, and was released on a $250,000 bond. Murphy had been detained in Brazil since his arrest on Dec. 6, 2023.
Murphy could not be reached for comment for this story.
As alleged in the indictment, Murphy owned and operated Mara Investment, which Murphy purported to be a hedge fund that solicited and accepted investments and used a quantitative strategy that balanced long and short positions in securities.
According to the indictment, between approximately 2016 and September 2022, Murphy defrauded investors by pursuing a much riskier investment strategy than he told investors; diverting substantial investor funds for his own personal use and benefit; representing to investors that their invested funds were performing more favorably than was the case, including providing investors with account statements that falsely representing their account balances; and providing investors with federal tax forms that falsely reported business income upon which investors would be required to pay tax.
It is alleged that Murphy stole approximately $3.5 million in investor funds through this scheme and used the funds to pay for personal expenses and to purchase a personal stake in his relative’s startup company.
The indictment charges Murphy with 15 counts of wire fraud, an offense that carries a maximum term of imprisonment of 20 years on each count; five counts of money laundering, an offense that carries a maximum term of imprisonment of 10 years on each count; and three counts of tax evasion, an offense that carries a maximum term of imprisonment of five years on each count. Per the extradition agreement with Brazil, the government has agreed not to pursue the tax evasion charges against Murphy.
Avery stressed that an indictment is not evidence of guilt. Charges are only allegations, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The case is being prosecuted by Assistant U.S. Attorney David E. Novick.
In December 2023, the Securities and Exchange Commission had charged Murphy and his investment management firm for fraudulent misappropriation of approximately $3.4 million of investor assets.
According to the SEC’s complaint, Murphy induced multiple individuals to invest approximately $6.6 million in a private investment fund, Mara Investment Management LP controlled by Mara Investments. Murphy told prospective investors that he was trading conservative stocks in the fund’s brokerage accounts, and generating consistent profits.
The SEC seeks permanent injunctions, disgorgement with prejudgment interest, and civil penalties against Murphy and Mara Investments.
