Inside Jacob Murphy's $3 million company demise

FALL FROM GRACE: Jacob Murphy says "I have lost my family from this, I can’t live in Newcastle. I lost everything".

FALL FROM GRACE: Jacob Murphy says "I have lost my family from this, I can’t live in Newcastle. I lost everything".

ALL is not forgiven for Jacob Murphy in Newcastle. His was a very public fall from grace that left many wondering. What went so wrong?

A promising young man, from a prominent Newcastle business family.

At just 23, Mr Murphy was the man behind the $3 million collapse of a Newcastle electrical company in late 2013 that left dozens of businesses and employees out of pocket. While creditors describe the bruising effect the demise had on their bank balances, former employees recall bikies "lining up" to give Mr Murphy a more traditional style of beating.

Hunted and hounded. In the months before and after his business was placed in liquidation, outlaw bikie gang members, hired as muscle to debt collect and intimidate, regularly turned up at Mr Murphy’s Warners Bay business.

As the head of Custom Electrics and Automation, he has been living overseas since. Now, after being contacted by Fairfax Media about his relationship with convicted fraudster Lemuel Page, Mr Murphy agreed to tell his side of the story about how it all went so wrong.

It is the latest chapter in an already sensational tale that involves Page, a Newcastle-based con man with a history of fleecing everyone from investors to tradesmen and life-long friends.

Even his de facto wife’s family has not been immune to Page’s ways. 

A fraud conviction in July, over a fake diamond ring Page sold to a friend for $85,000, turned his private dealings into a very public scandal with victims continuing to come forward detailing decades of deception where many have lost entire nest eggs. 

FRIENDS: Jacob Murphy said there was a time when he considered Newcastle fraudster Lemuel Page and his podiatrist girlfriend Renay Bull among his best friends.

FRIENDS: Jacob Murphy said there was a time when he considered Newcastle fraudster Lemuel Page and his podiatrist girlfriend Renay Bull among his best friends.

Behind the sensational story, according to Mr Murphy, is another narrative. Rife with failed investments and wrongdoing that ultimately resulted in the collapse of his once-successful business, Custom Electrics and Automation. It is a largely hidden story that raises many questions about an unlikely friendship between Mr Murphy, who was 18 years old at the time and had just finished his electrical apprenticeship, and Page, the almost 40-year-old outwardly affluent, self-styled property developer.

"I embarrassed my family, I hurt people, a lot of people lost money and I’m responsible for all of that,” Mr Murphy said, speaking from the United States. “The thing people don’t know is I invested with Lemuel and the money just vanished.”

According to Mr Murphy, he invested more than $750,000 with Page, including hundreds of thousands of dollars he borrowed from his family. Other members of the Murphy family, including his mother, father and brother, told Fairfax Media they too invested large sums with Page, money they never saw again. They considered Page a friend, they trusted him.

It’s a story reminiscent of the one told by the family of Page’s de facto wife. Renay Bull's sister, brother, father, aunty and uncle and family friends invested hundreds of thousands of dollars in Page’s ventures. Like so many others, they are all fighting to get their money back.

 According to Mr Murphy, who said he understands why he has been painted as the villain, the story began in 2008 when he was working as an electrician on one of Page’s development sites in Bull Street, Mayfield. 

A chance meeting was the start of a close friendship that lasted years. Page went to Mr Murphy’s 18th and 21st birthdays, Christmas parties and the pair regularly drank at The Junction Hotel.

Observers say the men, who could have been mistaken for father and son due to the age difference, were “inseparable” and “joined at the hip”. Mr Murphy agreed he considered Page and his podiatrist partner, Ms Bull, among his closest friends.

According to Mr Murphy, after their first meeting, it didn’t take long for Page to introduce an improbable goal.

Why didn't he go out on his own? Page had enough work to keep him busy.

“I’d always wanted to start my own business,” Mr Murphy said. “Lemuel had a lot of money and he seemed really nice and he said he’d give me work.”

The strategy succeeded spectacularly. After months of modest progress and hard work, Mr Murphy’s business took off. Several years later he was juggling million-dollar contracts and employed more than 40 staff.

After a working relationship blossomed between the pair, it took Page about a year to suggest that Mr Murphy should invest with him. Believing he was about to radically change his future, Mr Murphy agreed.

“I thought he was a good friend,” Mr Murphy said. “He came to our family events, we felt sorry for him because he had no family. We invited him in, we trusted him.

“I thought these deals were something that were going to be stable investments to build a future on.” 

He said Page presented him with contracts, partnership agreements and loan documents - all of which seemed legitimate. Like other investors, Mr Murphy’s mother Michelle likened the treatment to "grooming".

“Jacob was young, naive and he made some very bad choices, there is absolutely no getting away from that,” she said. “But I honestly believe Lem knew who Jacob was, knew he came from a good family, thought he could cash in and he used Jake like a puppet.

“Our whole family carries the shame of this.”

Mr Murphy said Page persuaded him to invest, via Page’s company Elefteria, in a mining equipment deal. Elefteria, which is now in liquidation, was linked to a well-publicised dispute involving mining company Silver City Drilling. 

According to Page’s bankruptcy report prepared by Geoffrey McDonald in 2015 which details how the fraudster allegedly amassed more than $17 million in debts, Page was a silent shareholder through Sam Ibrahim, a former Nomads bikie boss, and Silver City director Nathan Wilson. 

Elefteria also leased mining equipment to the Port Macquarie-based firm. A potentially lucrative $20 million deal by Silver City in 2013 fell apart after Ibrahim, who claimed to be a large shareholder, threatened to kill Mr Wilson and his family. Ibrahim, who is in jail for his role in a gun supply ring, then stood over Mr Wilson and demanded $3.72 million. The stoush killed the $20 million deal. Ibrahim was jailed for 16 months for the death threats in 2014. 

Mr Murphy said the majority of money he invested with Page was lost on the mining equipment deal.

The official line from Page at the time was there were contractual disputes with the mining companies that were holding up the deals.

Mr Murphy described, as members of Ms Bull’s family did, how Page proposed a development opportunity, asking him to invest in public housing properties in Stannet Street, Waratah West.

Page claimed the properties could only be purchased through him because he was a “low-income housing provider”. The Murphys describe, and provided copies of cheques that detail, how they handed over large sums of money to Elefteria.

Page told them, as he did with so many others, that much of the money would be placed in a Newcastle real estate agent’s trust account until the deals were ready to proceed.

The investments included public housing units at Light Street, Bar Beach, a development at Robertson Street, Carrington, and student accommodation at Samdon Street, Hamilton.

Fairfax Media reported that Ms Bull’s younger sister lost $45,000 after investing with Page in Robertson Street, Carrington, and Page’s former cleaners, Ray and Teresa Henderson, lost $100,000 on the same property deal.   

Mr Murphy didn’t hang around long after the business collapse. Buckling under the strain he was admitted to a mental health facility, and eventually left the country.

Hunter businesses comprised 51 of the 89 unsecured creditors owed at least $1.472 million from his company’s demise. About $108,000 in employee entitlements was owed to 46 staff.

“I had physical threats from people chasing their money and I was begging Lemuel for my money so I could pay,” he said. “He gave me excuse, after excuse, and in the end he would’t take my calls. I have lost my family from this, I can’t live in Newcastle. I lost everything.”

CREDITOR SAYS MURPHY TO BLAME

PHIL Priestley knows a thing or two about business.

So when a young Jacob Murphy came to him asking advice, the retired head of Priestley Electrical was more than happy to lend a hand. 

“I thought he was a good style of a young bloke who was having a go,” Mr Priestley said. 

“I wanted to help him and did some consulting for him on a casual basis.”

Mr Priestley never expected his generosity would cost him tens of thousands of dollars. 

He said Mr Murphy asked him for a $100,000 loan to invest in a mine drilling operation.

“I always dealt with Murphy, but he told me him and [Lemuel] Page were partners in this thing,” he said. 

“The pair of them were joined at the hip at the time. Murphy told me all about the venture, he was very convincing. 

“It was a bloody good story.” 

A loan agreement was drawn up and some interest repayments were made, but then the money dried up. 

Mr Murphy said the money was lost on the deal with Page and he repaid Mr Priestley what he could from his own funds.

Adamant, Mr Priestley said he held Mr Murphy responsible for the money he lost, just as many other creditors did. 

“It’s really easy to point the finger at someone else,” he said. 

“It was Murphy I dealt with and Murphy who took my money. To me, it’s that simple. He is the one who owes me the money.”

  • Do you know more? donna.page@fairfaxmedia.com.au