Eddie Murphy Divorce Settlement and the Fraud That Followed

Nicole Mitchell Murphy’s 2006 divorce settlement from Eddie Murphy gave her a reported $15 million lump-sum payment, the couple’s $6 million estate in California, and a guarantee that Eddie would keep paying private school tuition for their five children. In exchange, she waived ongoing spousal support. Within a few years, most of that money was gone, taken by a childhood friend who ran a long fraud against her.

What Nicole Received

Nicole filed for divorce in Los Angeles Superior Court on August 5, 2005, citing irreconcilable differences after the couple separated that July. She requested joint custody and initially sought spousal support.¹² The divorce was finalized on April 17, 2006.³

The final terms: a $15 million cash payment, the couple’s $6 million California estate, and continued private school tuition for all five children. Nicole waived spousal support as part of the deal.⁴⁵

Why the Payout Wasn’t Larger

Eddie and Nicole had signed a prenuptial agreement before their 1993 wedding. When negotiations began, Murphy’s position was that the settlement should track the prenup, and he reportedly offered $10 million against an estimated net worth of $500 million.⁶

Nicole argued Murphy had breached the prenup, pointing to a 1997 incident in which he was pulled over at 4:45 a.m. on Santa Monica Boulevard with Atisone Seiuli, a transgender sex worker, in his car.⁷ Murphy was never charged; police found no evidence of illegal activity, and he said he had only offered Seiuli a ride.⁸ The incident reportedly influenced negotiations but does not appear to have been formally litigated as a prenup breach. The final number landed above Murphy’s opening offer but well short of a share of his estimated fortune.

How the Money Disappeared

Beginning around 2006, a childhood friend named Troy Stratos, born Troy Stafford, persuaded Nicole to let him manage her divorce proceeds. He said he would invest the money overseas through ventures tied to Dubai and the United Arab Emirates, with returns held in a Swiss bank account.⁹ None of it existed.

Stratos set up the Granite TN Revocable Trust and convinced Nicole to move her assets into it under the pretense that he would “manage and protect” them.¹⁰ He told her he was covering her daily expenses out of his own pocket while her money worked overseas. He was spending her money. He moved into her Granite Bay mansion, convinced her to refinance that property along with a home owned by her mother in Sacramento, and pocketed more than $1 million from those refinances.⁹ He also took some of Nicole’s jewelry for a fictitious music-promotion project he called “Collection X.”

The stolen funds paid for leased Lamborghinis and Rolls-Royces, a $50,000 grand piano, and rentals in Marina del Rey and Venice Beach.⁹ Prosecutors later determined Stratos took as much as $10 million from Nicole.¹¹

The Criminal Case and Restitution Order

Stratos was arrested in December 2011 and remained in custody. He faced a 20-count federal indictment in the Eastern District of California covering the fraud against Nicole and a separate scheme against other investors. On August 31, 2016, he pleaded guilty without a plea agreement to 14 counts tied to the Murphy fraud, including 11 counts of wire and mail fraud, two counts of money laundering, and one count of obstruction of justice.¹⁰

On December 12, 2016, U.S. District Judge Troy L. Nunley sentenced Stratos to 262 months in federal prison, roughly 21 years and 10 months. The court applied a four-level sentencing enhancement for causing “substantial financial hardship to five or more victims,” citing that Nicole and her mother both lost homes. The Ninth Circuit affirmed the sentence on August 21, 2019.¹²

On January 20, 2017, Judge Nunley ordered Stratos to pay Nicole $10,380,581 in restitution, not counting jewelry. The court recognized Nicole as a victim of jewelry theft but found the government’s proposed $1 million figure insufficiently documented, indicating he was prepared to award between $1 million and $2 million if prosecutors submitted better evidence within 14 days.¹⁰ Whether the jewelry portion was finalized is not established in available records.

Nicole also sued Stratos in civil court, filing a federal lawsuit in Los Angeles in 2010 and refiling in Florida state court in May 2011.¹³ There is no public reporting that she recovered meaningful funds through those actions.

Where Nicole Stands Now

The fraud pushed Nicole into serious financial distress. The Granite Bay mansion, an 11,000-square-foot property the Murphys had purchased in 1998 for $3.8 million and that Nicole took in the settlement, went to sale in 2007 for $6.1 million after she fell behind and defaulted on the loan.¹⁴ By 2010, she reportedly owed roughly $5 million on a mortgage, $600,000 to attorneys, and nearly $900,000 in back taxes to the IRS.⁵

She rebuilt through television and business. She starred in and executive-produced the VH1 series Hollywood Exes from 2012 to 2014, launched a jewelry line called FLP by Nicole Murphy in 2009, released an anti-aging skincare line, and collaborated on a Moscato with Red Styxx Beverage.⁵ Her estimated net worth as of 2025 is between $10 million and $11 million.⁴

1
Foster’s Daily Democrat. Eddie Murphy’s Wife Files for Divorce
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Houston Chronicle. Eddie Murphy’s Wife Files for Divorce
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Hollywood Life. Eddie Murphy’s Ex-Wife Nicole Mitchell Murphy
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Blavity. Nicole Murphy Net Worth
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Celebrity Net Worth. Nicole Murphy Net Worth
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St. Louis American. What Will Nicole Say
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Yahoo Entertainment. Eddie Murphy Stopped by Police With Transsexual Prostitute in Car
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NZ Herald. What Happened to Eddie Murphy
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Sacramento Bee. Con Man Pleads Guilty to Defrauding Eddie Murphy’s Ex
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GovInfo. United States v. Stratos, Case No. 2:11-cr-00537-TLN
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New York Post. Con Man Admits to Fleecing Eddie Murphy’s Ex Out of $10M
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FindLaw. United States v. Stratos, No. 16-10532
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Emirates 24/7. Man Defrauded Nicole Murphy of $7M
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KCRA. Eddie Murphy’s Former Granite Bay Home Up for Auction