An Illinois woman was sentenced earlier this week to one year in prison for conspiracy to commit wire fraud, wire fraud, and money laundering related to the case.
Octavia Renee Murphy, 37, of the 700 block of Double Jack Street, was sentenced on May 19, 2026.
Murphy was also ordered to serve a two-year term of supervised release following her imprisonment and to pay $169,949.97 in restitution to the U.S. Small Business Administration (SBA).
On January 27, 2026, Murphy pleaded guilty before U.S. District Judge Colleen R. Lawless in Springfield, Illinois, to conspiring with others to defraud the SBA by submitting false applications for pandemic-era relief, namely, Economic Injury Disaster Loan (EIDL) advances and Paycheck Protection Program (PPP) loans.
Murphy admitted recruiting relatives, co-workers, and friends to file fraudulent applications for EIDL advances and PPP loans, falsely claiming that they operated small businesses prior to and during the pandemic. Murphy admitted that, when those applications were successful, those individuals paid kickbacks to her out of the fraud proceeds. Murphy further admitted that she filed false PPP loan forgiveness applications for those same individuals, as well as attempted to disguise and conceal the PPP loan that she personally received by transferring the money to another account and falsely claiming it was for “payroll”.
At the sentencing hearing, the government presented evidence establishing that Murphy was the leader and organizer of a 14-defendant conspiracy that defrauded the SBA of $169,949.97 by submitting false EIDL advance and PPP loan applications.
The government also established that Murphy was gainfully employed by the State of Illinois at the Shapiro Developmental Center in Kankakee, Illinois, at the time of her fraud and was motivated by greed, not any financial need.
“Exploiting a program designed to assist small businesses in staying viable during a crisis is inexcusable.” said Acting United States Attorney Gregory M. Gilmore. “We remain committed to working with our law enforcement partners and protecting the taxpayers by holding these fraudsters accountable for their actions.”
During the hearing, Judge Lawless rejected Murphy’s request for a minimum sentence of one day of imprisonment, stating that she could not ignore that Murphy was the leader of this large conspiracy to defraud the SBA and that Murphy’s conduct warranted a sentence of imprisonment. Murphy will remain on bond pending reporting to the Bureau of Prisons at a later date to serve her sentence.
“Pandemic relief funds were meant to protect communities during a crisis, not to line the pockets of fraudsters,” said Ryan Presley, Special Agent in Charge of the FBI Springfield Field Office. “By organizing a network to steal from taxpayers, the defendant chose personal greed over public need. This case shows that if you defraud emergency federal programs, we and our partners will hold you accountable.”
The statutory penalties for conspiracy to commit wire fraud and each count of wire fraud are up to 30 years of imprisonment, five years of supervised release, full restitution, and a $250,000 fine. The statutory penalty for money laundering is up to 20 years of imprisonment, three years of supervised release, and a $250,000 fine.
Federal charges remain pending against the remaining 13 defendants, with a trial date of July 6, 2026, scheduled before Judge Lawless in Springfield.
“Today’s sentencing reflects the coordinated efforts of our office, our investigative partners, and the U.S. Attorney’s Office in addressing fraud involving federal relief programs,” said Basil Demczak, Special Agent in Charge of Amtrak Office of Inspector General’s Central Field Office. “We remain committed to protecting taxpayer funds and holding accountable those who exploited pandemic relief programs intended to support individuals and businesses in need.”
The Small Business Administration’s Office of Inspector General has estimated over $200 billion nationwide in fraudulent pandemic-relief payments under the Paycheck Protection Program and Economic Injury Disaster Loans during the COVID-19 pandemic.
The case investigation was conducted by the Amtrak Office of Inspector General’s Central Field Office and the Federal Bureau of Investigation, Springfield Field Office. Supervisory Assistant U.S. Attorney Eugene L. Miller represented the government in the prosecution.
Editor’s Note: Do you enjoy Townhall’s conservative reporting that takes on the radical Left and woke media? Support our work so that we can continue to bring you the truth.
Join Townhall VIP and use promo code FIGHT to receive 60% off your membership.
Join the conversation as a VIP Member