Ex-Bank of America Exec Pleads Guilty to Bid-Rigging Municipal Bonds
By Albert Samaha
Phillip Murphy, a former managing director at Bank of America, pleaded guilty on Monday for his role in a wide-ranging bid-rigging scheme that set artificial prices for municipal bond investment contracts.
Murphy, along with the 17 other defendants to plead guilty or get convicted, defrauded cities and counties who believed they were making investment agreements with the bank that offered them the best deal. Instead, the contracts went to predetermined winners, who sent kickbacks to the broker company, CDR Financial Products, charged with running the bidding process.
"Mr. Murphy ripped off hard working American taxpayers and cash-strapped municipalities all in pursuit of his own lucre," George Venizelos, who heads the FBI's New York Field Office, said in a statement.
Cities, counties, and other public entities use these investments to raise money for various projects, like schools or parks or roads. Much of the invested money comes from municipal bonds issued to the public.
http://blogs.villagevoice.com/runninscared/2014/02/phillip_murphy_bank_of_america_pleads_guilty_bid_rigging_municipal_bonds.php
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