A former Bank of America executive has pleaded guilty for his part in a conspiracy and fraud involving investment contracts stemming from the proceeds of municipal bonds.
Phillip Murphy was the managing director of B of A’s municipal derivatives products desk from 1998 to 2002.
The Justice Department says that while in that position, Murphy took part in a fraud scheme with employees of CDR Financial Products, a broker of municipal contracts, and others to manipulate the bidding process for the contracts in a way to increase the quantity and profitability of contracts awarded to Bank of America. In exchange, Murphy at times paid or arranged kickbacks for CDR employees and other brokers and also submitted intentionally losing bids for contracts on request. He also falsified bank reports.
Murphy faces up to 40 years in prison and $1.5 million in fines. Including Murphy, 17 people have been convicted or pleaded guilty in the case.