Local Loan Officer Accused of Money Mismanagement

ELLSWORTH — An Ellsworth loan officer has surrendered his license in the wake of numerous complaints from local businesses, customers and his business partner about mismanagement of money.

The alleged mismanagement has led to the ruin of what was to be a premiere equestrian center on the Bucksport Road, Breezy Maples Farm.

Documents from the Maine Department of Professional and Financial Regulation allege that Eric S. Murphy Jr. and Murphy Home Loans failed to satisfy “significant financial obligations” to nine individuals and businesses surrounding the construction of the equestrian center.

Other complaints stem from an enterprise Murphy ran providing construction loans through his business, Murphy Home Loans.

The Maine Bureau of Consumer Credit Protection has scheduled a hearing to assess Murphy’s conduct on March 30 in Gardiner at the offices of the Maine Department of Professional and Financial Regulation.

Cyndee Carroll, who founded Breezy Maples Farm in Blue Hill several years ago, was to manage the equestrian center while Murphy was to be the business manager, the letter states.

Murphy told Carroll he would pay her a salary and that she would own the Bucksport Road farmhouse mortgage-free, Leach stated in his report.

“Mr. Murphy told Ms. Carroll she would have no responsibility for the farm’s expenses,” Leach stated.

On Monday, Carroll said she had received notice of foreclosure on the property.

Leach states in the letter that Murphy initially limited Carroll’s access to the farm’s bank accounts. However, Carroll found out from the bank that Murphy had overdrawn the farm’s account multiple times, Leach said.

Murphy allegedly told Carroll he was expecting a bridge loan to address the farm’s financial difficulties, Leach said. The loan never materialized.

Carroll said she received notice of foreclosure on the property Monday. She said she has nowhere to go. She had given Murphy the proceeds from the sale of her property in Blue Hill for the equestrian center.

Carroll said she has been boarding 10 horses at the property and despite her financial situation, the horses have not done without. They are up to date on their shots and are being well fed.

The state also claims that Murphy failed to satisfy significant financial obligations to others, including Pebblebrook Construction, which built the equestrian center.

Murphy owes $165,000 to Pebblebrook Construction, Leach said.

Construction Loan Business

Other complaints are alleged in respect to Murphy’s enterprise providing construction loans, according to Leach. He owes money to investors who gave him funds for construction loans and money to people who took out mortgages with him for their construction projects.

The former loan officer owes money to Tony and Elizabeth Belch, who own Pebblebrook Construction, for investments they made for construction loans for three properties.

The Belches provided funds totaling $300,000 for construction loans relating to property of Tina Limeburner, Michael and Paula DeBeck and Duane Shimmel, Leach stated.

Murphy owes two other investors, Barbara and Merritt Williams, who invested $150,000 in the construction loan enterprise, said Leach. Their loan was secured by a mortgage on real estate for which the loan was made.

The couple invested the money in May or June 2007. Payments on the loan stopped in late 2007, Leach said.

When questioned by the couple, Murphy claimed he had trouble collecting from a number of borrowers, Leach reported.

Customer Complaints

In another matter, Murphy ceased financing on a construction loan made for Duane Shimmel.

In August of 2007, Murphy asked Shimmel to cease work on Shimmel’s project and work on a different Murphy-financed project, allegedly so that Murphy could obtain money from the sale of the second property and pay Shimmel the remaining $80,000 in financing due him, Leach stated.

Shimmel never received the remaining funds due for his project, which remains unfinished and not suitable for sale, stated Leach.

Employee Complaints

Other allegations are that Murphy failed to pay a promissory note totaling $30,000 with interest due to Jerrad Wilson, who had worked for him. The note represents a series of personal loans as well as unpaid wages Wilson was due, Leach said.

Negligent Financial Affairs

Murphy used the term “Trust” in a misleading way by representing that there existed an Eric S. Murphy Jr. Trust, Leach said.

Leach said Murphy has three checking accounts at The First. One in the name of the trust, one for Murphy Home Loans and one account with his wife.

Murphy allegedly paid personal expenses with money from the Murphy Home Loans operating account.

Maine Bureau of Consumer Credit Protection Superintendent Will Lund will preside over the hearing, which could continue to additional dates beyond the March 30 hearing if necessary.

Possible sanctions that the state could take include monetary penalties of up to $1,500 for each instance of misconduct. The superintendent could also assess Murphy for investigation and hearing expenses.

When The American contacted Murphy for comment, he issued the following statement, which he had previously sent to Maine assistant attorney general James Bowie.

“I hereby surrender or otherwise revoke any license, registration or other privilege with the state of Maine that I might have that was subject to review in the proceedings you stated before the Bureau of Consumer Credit Protection scheduled for hearing…” Murphy stated.

“I will not be attending or otherwise participating in any proceeding because I cannot afford to do so and because it is now moot with this e-mail,” Murphy stated.

“As you know, my former attorney, John Lambert, practically begged for you to meet with me so that you could hear my side of the story,” Murphy stated. “For reasons that neither he nor I understood, you were unwilling to do so. I cannot afford counsel to defend me in this formal proceeding that you insist on. Should you have a change of heart and be willing to learn the other side of the story in a way that I can do so with counsel on an affordable basis, please let me know.”

For complete story, pick up a copy of The Ellsworth American.

Nicole Ouellette

Nicole Ouellette

When Nicole isn't giving advice she's completely unqualified to give, she runs an Internet marketing company in Bar Harbor, where she lives with her husband Derrick and their short dog Gidget. She loves young adult novels, cooking and talking French to anyone who'll talk back. [email protected]