United States v. Octavia Renee Murphy

Case summary

Octavia Renee Murphy, 37, of Bourbonnais, Illinois, was sentenced on May 19, 2026, to one year in prison for conspiracy to commit wire fraud, wire fraud, and money laundering, followed by two years of supervised release. She was also ordered to pay $169,949.97 in restitution to the Small Business Administration.¹

Murphy pleaded guilty before U.S. District Judge Colleen R. Lawless in Springfield to conspiring with others to defraud the SBA by submitting false applications for Economic Injury Disaster Loan advances and Paycheck Protection Program loans. She admitted recruiting relatives, coworkers, and friends to file fraudulent applications falsely claiming they operated small businesses before and during the pandemic, and that when those applications succeeded, the recruits paid her kickbacks from the proceeds. She also admitted filing false PPP loan forgiveness applications for those same individuals, and attempting to disguise and conceal the PPP loan she personally received by transferring the money to another account and falsely claiming it was for "payroll."¹

At the sentencing hearing, the government presented evidence that Murphy was the leader and organizer of a fourteen-defendant conspiracy that defrauded the SBA of $169,949.97. It also presented evidence that she was employed by the State of Illinois at the Shapiro Developmental Center in Kankakee at the time of her fraud, and that she was motivated by greed, not financial need. Judge Lawless rejected Murphy's request for a sentence of one day of imprisonment, stating that she could not ignore that Murphy was the leader of the conspiracy. Federal charges remained pending against the other thirteen defendants, with trial scheduled for July 6, 2026. The case was investigated by Amtrak's Office of Inspector General and the FBI's Springfield Field Office; Supervisory Assistant U.S. Attorney Eugene L. Miller prosecuted it.¹

Notes

1. U.S. Attorney's Office for the Central District of Illinois, "Bourbonnais Woman Sentenced to One Year In Prison for Pandemic-Related Fraud" (original), May 20, 2026. ↩₁ ↩₂ ↩₃

Summary written from the documents on this page; every sentence is sourced.