Court Orders Disgorgement After Ex-Navy Chief Funneled Investor Cash to Casinos
A federal court has entered a final consent judgment against a former U.S. Navy chief petty officer who raised nearly $355,000 from fellow service members and veterans through a fraudulent investment fund — then misappropriated roughly 42% of those assets for personal expenses, including casino gambling.
The U.S. District Court for the Northern District of Illinois entered the judgment against Robert L. Murray Jr., resolving a civil enforcement action the U.S. Securities and Exchange Commission brought against him in July 2022.
Murray organized Deep Dive Strategies LLC in North Canton, Ohio, in September 2020 and solicited investors through February 2021. He targeted a Facebook group with more than 3,500 active-duty, reserve, and veteran Navy members, presenting himself as a skilled options trader and leveraging the trust associated with his military service to attract capital. He also live-streamed trading activity on Discord as part of his pitch.
Murray raised approximately $354,800 from approximately 44 investors across 14 states, including active-duty service members stationed abroad, selling unregistered membership interests in the fund at $5,000 per unit. He allegedly told investors the fund would trade publicly listed securities and promised that investors who remained in the fund for a year could redeem their interests within 15 days of request.
According to the SEC’s complaint, originally filed in the Northern District of Ohio, Murray began misusing fund assets almost immediately. Three days after receiving the fund’s first investor deposits in October 2020, he charged $638.99 at a jewelry retailer using the fund’s debit card. By January 2021, Murray had lost most of the fund’s tradeable assets — including a large loss on GameStop options contracts on Jan. 13, 2021 — and made his final trade on Jan. 23, 2021. He emptied the fund’s brokerage account of its remaining $161.98 in February 2021.
Murray transferred fund money to his personal accounts and withdrew cash on days he visited casinos in Ohio, Indiana, and Wisconsin. For example, he allegedly transferred $10,000 from the fund’s bank account to his personal account on Feb. 2, 2021 — which held a balance of $760.41 — and then, nine minutes later, purchased $10,400 in casino chips at a Cleveland casino.
In total, Murray misappropriated approximately $148,000, according to the SEC. He collected an additional $37,300 from three existing investors and one new investor between Jan. 23 and Feb. 11, 2021 — after his final trade — and diverted those funds as well. No fund investors have received any return.
Murray asserted his Fifth Amendment privilege during the SEC’s pre-filing investigation.
The judgment permanently bars Murray from further violations of federal antifraud, securities-registration, and investment-adviser laws. It also orders him to pay $112,271.71 in disgorgement, an obligation that will be satisfied by a restitution order in a parallel federal criminal case against him in Chicago.
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