Paul Steven Murphy Former IT Manager of School Sisters of Notre Dame (SSND) Sentenced on Mail Fraud Charges

February 18, 2010

Paul Steven Murphy was sentenced to 46 months in prison on charges involving a false invoice scheme which defrauded his employer, the School Sisters of Notre Dame, of more than $510,000. He also failed to report the money as income on his tax returns. In addition to his prison sentence, Murphy was ordered to pay restitution of $622,330.

Murphy was head of Information Technology (IT) for School Sisters of Notre Dame (SSND), a religious and charitable organization in the City of St. Louis. His responsibilities included ordering and installing computer hardware and software. Murphy also established his own business known as PC House. Beginning in October 2000 and continuing until December 2007, Murphy submitted invoices to SSND under the name PC House for goods and services which had not been rendered. These fraudulent invoices indicated on the face that Murphy approved their payment and would also indicate which accounting categories should be charged for the items billed. Murphy submitted PC House invoices totaling approximately $510,000 during the period 2000 through 2007. Murphy used this money for travel to Las Vegas, India and Hawaii, mortgage payments, jewelry and restaurants.

Additionally, Murphy failed to report on his federal income tax returns for the years 2003 through 2007 the money he received through the submission of the false and fraudulent PC House invoices to SSND. The total amount of additional tax due for the four years 2003 through 2007 is approximately $112,330.

"No matter what the source of income, all income is taxable" said Toni Weirauch, Special Agent in Charge of IRS Criminal Investigation. "Honest, hardworking Americans pay the price when others choose to evade their tax obligations."

"It's bad enough Paul Murphy stole more than half-a-million dollars from a charitable organization operated by nuns," said Roland J. Corvington, Special Agent in Charge of the FBI St. Louis Division. "Even worse, he stole their trust."

Murphy, 44, St. Louis, pleaded guilty last November to one felony count mail fraud and one felony count of tax evasion. He appeared today for sentencing before United States District Judge Catherine D. Perry.