Pennsylvania Man Sentenced to Prison For $7.5 Million Ponzi Scheme

A Scranton man who operated a $7.5 million Ponzi scheme in a downtown office above the Lackawanna County District Attorney's Office was sentenced to spend 5 1/2 to 16 1/2 years in state prison.  Brian Murray, 68, was charged along with several other executives of Murray Insurance, including Murray’s wife, Diane D. Murray, 66; Christine M. Oliver-Shean, 51, of Scranton; and Oliver-Shean’s husband, Timothy G. Shean, 53.  The four faced a variety of state charges, including criminal conspiracy, money laundering, theft, insurance fraud, and forgery.  As Pennsylvania Attorney General Tom Corbett quipped, 

It is interesting to note that the building in Scranton where Murray’s insurance business was headquartered is known as ‘One Pyramid Center,’ because this was a massive illegal pyramid.

Murray entered a plea of no contest to criminal conspiracy, two counts of theft by deception, and theft by failure to make required disposition of funds, each a third-degree felony.

Murray operated Murray Insurance Agency in Scranton, which purported to purchase insurance policies for local businesses.  According to authorities, Murray collected insurance premium payments but failed to forward those payments to insurers to obtain coverage, instead pocketing the premiums.  In the case of a client filing a claim, new investor funds were used to satisfy any payouts.  This practice continued for nearly a decade, resulting in many businesses not receiving insurance coverage they assumed was in place.  Included among Murray's victims were University of Scranton, Marywood University, Loyola College of Maryland, St. Joseph’s University, Moses-Taylor Hospital, the Borough of Phoenixville, and the Lackawanna County Multi-Purpose Stadium.  One of the victims, Philips Healthcare, paid Murray $500,000 for an insurance policy that was never existed.  It later cost the company over $2 million in investigative and court costs to determine this fact.  Murray Insurance filed for bankruptcy protection in 2009.  Authorities estimated total losses from the scheme at $10 million.

Murray's wife earlier pled guilty to a single count of criminal conspiracy and was sentenced to twenty-four months of probation.  Ms. Oliver-Sheen pled guilty to three counts of theft, one count of insurance fraud and one count of conspiracy, and received a three-month sentence in state prison.