Date: 05-28-2018

Case Style:

Case Number: 4:16-cr-00466-JAR

Judge: John Ross

Court: United States District Court for the Eastern District of Missouri (St. Louis County)

Plaintiff's Attorney: Kyle Timothy Bateman, Gwendolyn Eleanor Carroll, Richard E. Finneran and Charles S. Birmingham

Defendant's Attorney: Patrick S. Kilgore for Timothy Murphy

Luke A. Baumstark for Shawn Casey

Neil J. Beller for Bruce Doll

Anthony S. Bretz for Russell Hibbert

Craig J. Concannon for Thomas Silha

Booker T. Evans, Jr. for Donald Schnock

Edward K. Fehlig for Brian Phillips

J. Christian Goeke for Jennifer Hansen

Jeffrey A. Goldfarb for Michael Silver

Marc Johnson for Philip Hale

Patrick S. Kilgore for Timothy Murphy

Jason A. Korner for Bruce Doll

Evan W. Krick for Donald Schnock

John M. Lynch for Ashley Powell

Joan K. Miller for Cybill Osterman

Cameron Alan Morgan for Joshua Flynn

Anthony Joseph Muhlenkamp for Anthony Swiantek

Kristy Lynn Ridings for Scott Shocklee

Douglas P. Roller for Dean Miller

N. Scott Rosenblum fro Philip Hale

Daniel Schattnik for Jason Gallagher

John C. Schleiffarth for John Balleweg

Kenneth R. Schwartzfor Andrew Devoe

Burton H. Shostak for Shawn Casey

Alan Simpson for Michael McNeill

Burton H. Shostak for Russell Hibbert

Stephen R. Welby for Timothy Murphy

Robert Craig Wolfrum for Michael McNeill

Description: St. Louis, MO - Twentieth Defendant Sentenced for Federal Fraud and Money Laundering Charges Related to Telemarketing Enterprise that Targeted the Elderly

Timothy Murphy, a/k/a Mr. Black, a/k/a Colby Muhlberg, a/k/a Arthur Whitton, 34, of Phoenix, Arizona, was sentenced on May 22, 2018 to 54 months in prison in connection with a multi-count indictment arising from a fraudulent telemarketing enterprise that often targeted elderly victims. Ninety-one Missouri residents are among the approximately 4,000 victims including residents of Chesterfield, University City, St. Louis, Hannibal, Arnold, Potosi, Ballwin, Valley Park, Florissant, O’Fallon, St. Clair, and Farmington. Multiple individual victims of the scheme lost more than $50,000. Two individual victims lost more than $200,000.

On February 22, 2018, Timothy Murphy pled guilty to one count of wire fraud in connection with telemarketing and one count of conspiracy to commit money laundering before United States Judge John Ross. As led by Defendant Michael McNeill, Defendant Joshua Flynn and Defendant Murphy, and others, the telemarketing enterprise sold false and fictitious business opportunities as part of a scheme that reached across the United States and Canada and generated in excess of $28,000,000 in fraudulent sales. From 2012 through 2015, the Phoenix, Arizona based telemarketing enterprise operated under multiple business names and utilized multiple business entities over the course of the scheme, including Smart Business Pros LLC of Warson Woods, Missouri. The sophisticated money laundering activity of the telemarketing enterprise included transfers designed to promote and conceal their fraud and also to enrich the owners, organizers and leaders of the enterprise.

In October 2016, nine individuals were initially indicted. In February 2017, an additional ten individuals were indicted. In July 2017, an additional individual was indicted. All twenty defendants have now pled guilty and have been sentenced for one or more offenses arising from the scheme to defraud and money laundering. Defendants in the case were sentenced to a combined total of 595 months’ imprisonment. All defendants were ordered to pay restitution to the victims and ordered to forfeit assets. To date, approximately $1,000,000.00 has been paid toward restitution. In addition, the United States has identified numerous assets for forfeiture in this case, including more than $300,000 in cash seized from various defendants, Rolex and Breitling watches, more than 80 gold and silver coins, a 2015 Jaguar F-Type coupe, numerous firearms, private equity holdings, and an interest in a luxury home in Phoenix, Arizona.

Assistant Inspector in Charge James Ball stated, “The defendants in this large scale and sophisticated fraud targeted this nation’s elderly citizens. This investigation is fair warning to such criminals that the U.S. Postal Inspection Service is committed to protecting the vulnerable and bringing those who would victimize them to justice.”

“Honest and law abiding citizens are fed up with the likes of those who use deceit and fraud to line their pockets with other people’s money,” said Steven Slazinik, Acting Special Agent in Charge of IRS Criminal Investigation. “Those who engage in this type of fraud against the elderly should know they will not go undetected and will be held accountable.”

In addition to Mr. Murphy’s sentence of 54 months imprisonment, other defendants were sentenced to terms of imprisonment as follows: on March 6, 2018, Michael McNeill, a/k/a Mr. White, a/k/a Todd Lockwood, 48, of Phoenix, Arizona, was sentenced to 120 months in prison; on March 6, 2018, Joshua Flynn, a/k/a Mr. Pink, a/k/a Jeff Thomas, 36, of Chandler, Arizona, was sentenced to 84 months in prison; on March 1, 2018, Donald Schnock, 34, of Phoenix, Arizona, was sentenced to 60 months in prison; on March 7, 2018, Shawn Casey, a/k/a Shawn Anderson, a/k/a Daniel Arenson, 41, of Phoenix, Arizona, was sentenced to 50 months in prison; on March 8, 2018, Thomas Silha, a/k/a Keith Henderson, a/k/a Dave Marsh, 56, of Phoenix, Arizona, was sentenced to 50 months in prison; on March 7, 2018, Bruce Doll, 52, of Las Vegas, Nevada, was sentenced to 48 months in prison; on April 10, 2018, Scott Shocklee, a/k/a Fredo, 40, of Phoenix, Arizona, was sentenced to 36 months in prison; on May 4, 2018, Ashley Powell, a/k/a Brittany Wilson, 26, of Phoenix, Arizona, was sentenced to 30 months in prison; on March 8, 2018, Russell Hibbert, 44, of Phoenix, Arizona, was sentenced to 24 months in prison; on April 19, 2018, Jason Gallagher, 36, of Gilbert, Arizona, was sentenced to 24 months in prison; and on March 7, 2018, Brian Phillips, 28, of Tempe, Arizona, was sentenced to 12 months in prison.

This case was investigated by the, United States Postal Inspection Service, IRS Criminal Investigation, the Federal Bureau of Investigation, and the Office of the Arizona Attorney General. Assistant United States Attorneys Charles Birmingham, Gwendolyn Carroll, and Kyle Bateman prosecuted the case for the U.S. Attorney's Office. “These inspectors, agents, and prosecutors were persistent. They worked in close coordination and simply never gave up until the last one was sentenced,” said U.S. Attorney Jeff Jensen.

This prosecution coincides with the United States Department of Justice coordination of a nationwide elder fraud sweep. Attorney General Jeff Sessions and law enforcement partners are coordinating the largest sweep of elder fraud cases in history. The cases involve more than two hundred and fifty defendants from around the globe who victimized more than a million Americans. In total, the charged elder fraud schemes caused losses of more than half a billion dollars. The Department coordinated its sweep with the FTC and state Attorneys General, who independently filed numerous cases targeting elder frauds within the sweep period.

Elder fraud complaints

Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime, which can be reached at www.ovc.gov.

Outcome: Defendant was sentenced to 54 months in prison.

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Defendant's Experts:

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