11-07-2003 -- Murphy, Peter -- Guilty Plea/Sentencing -- News Release

Former Passaic County Political Boss Peter Murphy Pleads Guilty to Fraud Scheme

TRENTON - Former Passaic County Republican Party Chairman Peter Murphy pleaded guilty today to mail fraud in connection with a scheme to dole out payments derived from county contracts to his political friends, U.S. Attorney Christopher J. Christie announced.

Immediately following the guilty plea, U.S. District Judge Garrett E. Brown Jr. sentenced Murphy to eleven-and-a-half months in prison - the time that Murphy already had served in connection with his earlier conviction, which, along with his original 43-month prison sentence, was overturned on appeal.

Judge Brown also ordered Murphy to pay $72,800 in restitution to Passaic County and fined him $20,000 - amounts already paid by Murphy following his earlier conviction and sentence.

"We are pleased with the end result here - that Mr. Murphy served a considerable amount of time in prison for crimes which he has finally acknowledged committing as Republican party chairman in Passaic County," Christie said. "For those crimes, Mr. Murphy has lost his prestige and power, nearly a year of freedom and now is a convicted felon."

During his plea proceeding, Murphy admitted to agreeing with others to set up a scheme to defraud Passaic County government and its citizens by obtaining professional services contracts at the county jail for Central Medical Services, Inc. Murphy admitted that, in return, Central Medical made payments from the proceeds of the contracts to a four-member panel of Murphy's choosing. Murphy also admitted that it was understood that the United States mails would be used to promote the scheme, including to get a payment to the panel members in late December 1995.

A jury had convicted Murphy on May 14, 2001, of three counts of using the mails to promote and facilitate bribery and three counts of mail fraud based, in substantial part, on Murphy's role as a de facto Passaic County government official. Murphy was acquitted at the time of two counts of using the mails to promote and facility bribery and mail fraud. Judge Brown sentenced Murphy to 43 months in prison in September 2001. Murphy had been in prison from Nov. 2, 2001, to Oct. 18, 2002, when the U.S. Court of Appeals for the Third Circuit ordered his release while it considered his appeal of the conviction and sentence.

In March 2003, the Third Circuit overturned the conviction and remanded for a new trial, finding that the mail-fraud convictions could not be predicated on Murphy's role as a de facto public official, because Murphy, as the Passaic County Republican Party Chairman, was not a fiduciary for Passaic County government.

Murphy's retrial on the remaining six counts in the indictment was scheduled to start on Nov. 5, with the selection of the jury, and the first day of testimony to follow on Nov. 12.

Murphy's conviction carried a maximum prison sentence of five years and a fine of $250,000. However, Judge Brown determined Murphy's sentence based upon U.S. Sentencing Guidelines, a formula that takes into account the circumstances of the crime and other factors.

Christie credited special agents of the FBI, under the direction of Louie F. Allen, Special Agent in Charge of the FBI in Newark, with investigating the case.

The government was represented by Assistant U.S. Attorney James B. Nobile, and Charles B. McKenna, the Executive Assistant U.S. Attorney.

-end-

Defense Attorneys: Lawrence S. Lustberg, Esq. and Kevin McNulty, Esq.