The former chairwoman of North Castle's local Republican organization was sentenced to four and a half to 13 and a half years in prison in connection to her September guilty pleas to mortgage fraud charges, according to the Westchester County District Attorney's office.
Loronda Murphy, a 48-year-old Greenwich resident, pleaded guilty last September to two felony mortgage fraud counts.
The district attorney's office says that Murphy, along with real estate attorney and New Rochelle resident Scott Forcino, engaged in a Ponzi scheme from April to June 2009, working under the name of Settle One Corporation in Armonk. The ostensible purpose of the entity was for Forcino to oversee closings and for new mortgage money to be used to pay off older mortgage debt. However, the DA's office states, Murphy fraudulently took on the attorney's role and stole some of the new mortgage funds, resulting in an existing mortgage being unpaid.
Forcino pleaded guilty to a misdemeanor count of fourth-degree criminal facilitation, was sentenced to five years probation and resigned from the state bar, the DA's office said.
Five people, including Murphy's father, were victims, according to the DA's office. In total, Murphy got more than $1 million from two mortgage lenders, Live Well Financial and Wells Fargo, after sending in fraudlent mortgage documents. She then took $50,000 of it, the DA's office stated.
Murphy also skimmed money from Settle One's corporate account for her own use, and then using some remaining money in it to make monthly payments on mortgages that were unpaid, the DA's office stated.
“This type of criminal activity is what contributed to the collapse of the nation’s residential housing market from which the housing sector is only now beginning to recover," said District Attorney Janet DiFiore in a press release. "These defendants, one a former Town political leader and the other a real estate attorney, built a corrupt enterprise abusing the lending process and defrauding numerous victims, including the defendant’s own father.”
The downfall of Murphy has engulfed North Castle's political scene, according to recent local news reports. The Examiner reported that town board meetings earlier this month in Armonk were contentious over the topic, with Councilman John Cronin accusing former Town Supervisor William Weaver with keeping a professional association with Murphy, including running his 2011 re-election campaign, which was unsucessful. The accusation, according to The Examiner, drew sharp rebukes from local members of the Republican, Democratic and Conservative Party committees, but Cronin stands by his assertion.