Cuyahoga County

Blaine Murphy Pleads Guilty to Several Charges for Operating a Fraudulent Scam Flipping Houses

4/4/2013 FOR IMMEDIATE RELEASE
April 4, 2013

CLEVELAND- Cuyahoga County Prosecutor Timothy J. McGinty announced that Blaine Murphy (aka Bryce Peters, III and Martin J. Franks) plead guilty to eleven charges for illegally “flipping” 235 houses in Cuyahoga County by filing forged deeds. As part of his plea deal, Murphy, 44, of Naples, Florida, agreed to pay $1,000,000 in restitution.

Murphy was the key participant in a nationwide scam from 2005 through 2010 that included the purchase and sale of real estate in many states with the most activity occurring in Ohio, Michigan, Pennsylvania, Missouri, and Texas. The purpose of the scam was to make a quick profit by selling houses in Cuyahoga County which was done by filing forged deeds and engaging in related conduct. Of the 235 houses sold in Cuyahoga County, 186 properties were in Cleveland, 31 properties in East Cleveland, five properties in Warrensville Heights, four properties in Euclid, three properties in Cleveland Heights, three properties in Shaker Heights, two properties in Maple Heights, and one property in Garfield Heights. A total of 96 properties fell into tax foreclosure for a total tax delinquency amount of $1,032,849.84.

The scam existed in two phases. First, acquisitions were made with little or no regard for the condition of each property. In his quest to make a fast profit, Murphy ignored property code violations and payments of taxes at the expense of these communities in Cuyahoga County. Secondly, Murphy sold these properties in bulk or individually for a quick profit to various buyers, essentially in the same manner as these properties were acquired.

The forgeries hid the real identity of Murphy and made it difficult, if not impossible, for communities in Cuyahoga County to make contact with the individual or individuals responsible for the condition and maintenance of the properties. In an attempt to combat repeated housing code violations, Cleveland Municipal Housing Court Judge Raymond Pianka held Murphy and his corporation in contempt of court and levied fines for failure to appear in the amount of $9.5 million dollars. These forgeries aided the defendant in avoiding detection.

Today, Murphy plead guilty to one count of Telecommunications Fraud, a felony of the second degree, and ten counts of Tampering with Records, all felonies of the third degree. As part of his plea agreement, Murphy will pay $250,000 to the Cuyahoga County Prosecutor’s Office for the cost of investigation and prosecution. Sentencing is scheduled for May 8, 2013, where prosecutors will argue for significant prison time from Judge Richard McMonagle.

The following law enforcement agencies assisted the joint investigation led by the Cuyahoga County Prosecutor’s Office and Federal Bureau of Investigation (FBI): Naples Police Department, Collier County Sheriff Department, Collier County State Attorney’s Office, Philadelphia Police Department, Philadelphia District Attorney’s Office, and the Berkeley County Sheriff’s Department.

Assistant County Prosecutors Gregory Mussman and Edward Kraus prosecuted this case.

Contact:  Maria (Pinzone) Russo, Public Information Officer, (216) 698-2819, cell (216) 299-9326 or mrusso@prosecutor.cuyahogacounty.us http://prosecutor.cuyahogacounty.us .

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