Murphy-Mitchell Entertainment Settlement: Fraud and Restitution

In their 2006 divorce, Eddie Murphy and Nicole Mitchell settled on a $15 million lump-sum payment to Nicole, the couple’s Granite Bay, California, estate valued at roughly $6 million, and ongoing private school tuition for their five children. In exchange, Nicole waived spousal support.¹ Most of that money was later stolen by a childhood friend she had trusted as her financial advisor, who was sentenced to nearly 22 years in federal prison in 2016.²

Eddie and Nicole married on March 18, 1993 and had five children before Nicole filed for divorce on August 5, 2005 in Los Angeles, citing irreconcilable differences.³ The agreement was finalized the following year.

What Nicole Mitchell Received

The settlement had three main pieces: $15 million in cash, the family’s Granite Bay estate, and continuing tuition payments for the children’s private schooling. Nicole gave up her right to spousal support in exchange for the lump sum and the property.¹ Eddie Murphy’s estimated net worth is around $200 million, so the payment was significant in absolute terms but a fraction of his overall wealth.⁴

The Granite Bay Estate

The California property was a compound in the gated Los Lagos community in Placer County, east of Sacramento. It sat on more than 2.5 acres and included an 11,000-square-foot main house, a 5,200-square-foot guesthouse, ten bedrooms, and views of Folsom Lake.⁵ The couple had bought it in 1998, renovated it, and sold it together in 2007 for $6.1 million.⁶

How Most of the Money Was Lost

Within months of the settlement, Nicole entrusted a large portion of it to Troy Stratos, a childhood friend she had known for 34 years. Stratos, a self-described music producer and financial advisor based in Sacramento, promised to invest the money overseas at high rates of return, including ventures he tied to Dubai and the United Arab Emirates, with earnings held in a Swiss bank account.⁷

There were no investments. Stratos diverted the money to himself and spent it on leased Lamborghinis and Rolls-Royces, a $50,000 grand piano, and chartered private jets.⁷ To keep the scheme running, he paid some of Nicole’s personal expenses out of her own funds so it appeared her investments were producing returns.⁸ He also moved his company staff into her home.⁹

Stratos then convinced her to refinance both her home and her mother’s home in Sacramento, taking more than $1 million from the proceeds. He also told her he could sell the Granite Bay mansion to Middle Eastern royalty.⁷

The financial fallout was severe. By late 2010, IRS tax liens against Nicole totaled $846,630.¹⁰ She also owed about $600,000 to a law firm and $60,000 to a landscaping company, carried a $5 million mortgage on her Los Angeles home, and was reportedly forced to list that home for sale.¹¹

The Criminal Case and Restitution Order

Stratos was arrested by the FBI in Los Angeles on December 20, 2011.¹² In September 2016, he pleaded guilty without a plea agreement in the Eastern District of California to 11 counts of wire and mail fraud, two counts of money laundering, and one count of obstruction of justice tied to the Murphy scheme. Prosecutors said he had stolen as much as $10 million from her.⁷

On December 12, 2016, U.S. District Judge Troy Nunley sentenced Stratos to 262 months in prison, just under 22 years, at the top of the applicable federal guideline range. Judge Nunley rejected Stratos’s argument that money he had spent on Murphy’s behalf should not count as a loss, calling it “inconsistent with common sense” and writing, “Person A is not entitled to be generous to Person B with Person B’s money.”¹³

The court ordered Stratos to pay $10,380,581 in restitution for non-jewelry losses. On a separate claim for stolen jewelry, the judge found Murphy was a victim but ruled the government’s $1 million figure needed more evidentiary support, indicating the court was prepared to award between $1 million and $2 million once additional documentation was submitted.¹³

Nicole Murphy also pursued a civil case alleging that Stratos had conspired with Bank of America to defraud her.⁸ In April 2018, Florida’s Fourth District Court of Appeal affirmed the lower court’s decision in a per curiam ruling, with no financial recovery for Murphy noted in the record.¹⁴

Where Nicole Murphy Stands Now

Nicole rebuilt over the years that followed. She launched a jewelry line, FLP by Nicole Murphy, in 2009. From 2012 to 2014, she starred in and executive produced VH1’s Hollywood Exes, which ran for two seasons and followed former wives and partners of high-profile celebrities.¹⁵ She also collaborated on a Moscato wine with Red Styxx Beverage and founded YFOY, a skincare and wellness company she continues to run as CEO. As of 2025, her net worth was estimated at between $10 million and $11 million, a recovery from the loss but still below the combined value of the settlement and estate she originally received.¹

1
Blavity. Nicole Murphy Net Worth
2
New York Post. Con Man Who Scammed Eddie Murphy’s Ex Gets 22 Years in Jail
3
Houston Chronicle. Eddie Murphy’s Wife Files for Divorce
4
Celebrity Net Worth. Eddie Murphy Net Worth
5
San Francisco Gate. Murphy, 1st Wife Sell Granite Bay Home
6
Los Angeles Times. Eddie Murphy Former Mansion Sold
7
Sacramento Bee. Prosecutors: Sacramento Man Defrauded Nicole Murphy
8
New York Post. Con Man Admits to Fleecing Eddie Murphy’s Ex Out of $10M
9
CBS News Sacramento. Prosecutors: Sacramento Man Defrauded Nicole Murphy of $7 Million in Financial Scheme
10
RNB Philly. How Do You Burn Through $15 Million in 4 Years
11
92Q. Eddie Murphy’s Ex-Wife Nicole Murphy Says She’s Broke, Owes IRS
12
FBI. Jury Finds Defendant Guilty in $11.25 Million Investor Fraud Scheme Involving Facebook Stock
13
GovInfo. United States v. Stratos, Case No. 2:11-cr-00537-TLN
14
FindLaw. Nicole Murphy v. Bank of America Corporation, No. 4D17-1512
15
The Hollywood Reporter. VH1 Orders Hollywood Exes Starring Nicole Murphy, Sheree Fletcher