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Colorado Springs man indicted in securities fraud in Cripple Creek mine deal

March 13, 2018 Updated: March 14, 2018 at 11:30 am
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The owner of a Cripple Creek mine has been indicted on five counts of securities fraud by the Colorado Statewide Grand Jury, accused of soliciting $6 million from at least 55 Front Range investors for three companies he owns.

Shannon P. Murphy, 59, was indicted Jan. 12 for allegedly telling investors that money they pumped into his Epic Mineral Resources Inc., Murphy Mining International and Murphy Mining and Exploration would be used for mining in Cripple Creek. Some of the money allegedly was diverted to him and his wife and used for household and personal expenses.

He allegedly told investors his mining operation was two to three months from production that would result in "substantial returns." The operation actually "was far from producing" anything, the indictment said.

Investors also were told that he had coal mining operations in South Africa, but he failed to tell them that his mines hadn't produced anything; that companies he said were debt-free had long-term debts; and that he had previous and pending lawsuits, some of which resulted in judgments against him, the indictment says.

The Teller County Sheriff's Office arrested Murphy on Feb. 8. He was released Feb. 20 on a $250,000 bond. If convicted, he faces up to 12 years in prison and $750,000 in fines on each count.

Murphy could not be reached for comment. His Colorado Springs telephone number is disconnected, and calls to Epic Mineral Resources, Murphy Mining International and Murphy Mining and Exploration all went to voicemail.

He allegedly began soliciting investors in El Paso, Teller, Weld and five Denver-area counties in 2009 and continued seeking funds through 2014 from investors in California, Florida, Illinois, Iowa, Nebraska, Ohio, Texas and Washington. Investors lost from $5,000 to more than $600,000, with a Nebraska farmer suffering the largest loss.

Investor complaints prompted the FBI and IRS to open an investigation of Murphy and his companies in 2014, which led to the indictments sought by the Colorado Attorney General's Office.

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Contact Wayne Heilman: 636-0234

Twitter @wayneheilman

Facebook Wayne Heilman

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