KNOXVILLE, Tenn. (WATE) — An 81-year-old Knoxville man will serve nearly four years in federal prison and pay back over $2 million after he was convicted of running a fraudulent investment scheme.

Hugh Leroy Murphy, 81, currently of Knoxville, will serve 46 months in prison, followed by one year of supervised release after he was convicted of mail fraud and money laundering. He was also ordered to pay $2,215,202.08 in restitution to his victims.

Murphy defrauded 47 people by offering fake annuity and equity policy investment in commercial real estate over the course of 14 years beginning in 2002, diverting funds for his personal benefit instead of investing.

The investigation also found he created the appearance of return on investment by paying earlier investors with funds received from later investors. Murphy received at least $6,294,461.07 from the victims who suffered a net loss of $2,215,202.08.

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