(Bloomberg News) Troy Stratos, a self-described movie producer who left a trail of debt in Europe and North America, was arrested in Los Angeles for allegedly defrauding the ex-wife of comedian Eddie Murphy of at least $7 million.

Stratos, 45, was charged with mail fraud, money laundering and obstruction of justice in a federal indictment unsealed yesterday in Sacramento, California. He's accused of persuading Nichole Murphy, 43, to turn over more than $8 million of a divorce settlement, saying he would invest it in Dubai and the United Arab Emirates where he said he had connections and she could earn more interest.

Instead, he transferred the money into personal accounts, according to the indictment. Stratos leased a Rolls Royce and moved the staff of his movie production company into Murphy's mansion in Granite Bay, California, near Sacramento, prosecutors said.

"I'm ecstatic that he's going to be brought to justice," Nicole Murphy said in a phone interview.

After taking the divorce money, Stratos persuaded Murphy to refinance houses owned by her and her mother and to take money out to pay for expenses while her nest egg was invested abroad, according to the indictment.

Stratos also allegedly told Murphy that members of Middle Eastern royal families were interested in buying her house and that she should lease luxury cars to have on the property to make it more enticing. The buyers would take the cars as part of the package, according to the charges.

No Deal

In fact, Stratos lived in the house and drove the cars, and there was never any deal arranged, prosecutors said.

Stratos was the subject of a March profile in Bloomberg Markets, the monthly magazine of Bloomberg News. Tuesday's indictment names the victim as "NM." Nicole Murphy sued Stratos for fraud in federal court in California in September 2010, making the same allegations.

Erik Syverson, an attorney for Stratos at Miller Barondess LLP in Los Angeles, didn't immediately respond to a phone message.

Until recently, Stratos had an unpaid $2.1 million civil judgment against him in Hawaii. Dennis Rush, a real estate agent in Maui, told Bloomberg News in February 2011 that Stratos had convinced him to help fund the production of a jazz CD by Nancy Wilson, who had married Stratos's biological father.

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