ELLSWORTH — State regulators issued an order Monday revoking the license of an Ellsworth loan broker, who they say had been running a ‘Ponzi’ scheme.
At a hearing last month on the business practices of Eric Murphy Jr. and Murphy Home Loans, developers and investors testified that hundreds of thousands of dollars in investments were misapplied, misspent or lost, that building materials were not paid for, and that wages due to former employees remain unpaid.
Customers, employees and investors spoke to investigators with the Maine Department of Financial Regulation of their ruined finances and credit histories.
The complaints surround the construction of an equestrian center, Breezy Maples Farm on Bucksport Road, as well as Murphy’s business providing construction loans through his business, Murphy Home Loans.
Other issues deal with Murphy’s handling of business checking accounts and using the term “Trust” in a misleading way by representing that there existed an Eric S. Murphy Jr. Trust.
The state revoked Murphy’s license for at least five years and assessed penalties and costs of $21,500 under the terms of the order. Murphy was assessed $16,500 in administrative penalties for eleven violations of the Consumer Credit Code and an additional $5,000 for the costs incurred in bringing the case against him.
Murphy has the right to appeal the order by filing a petition within 30 days.
The American could not reach Murphy for comment before press time.