S.C. U.S. Attorney: Alex Murdaugh Indicted on Federal Conspiracy, Wire Fraud, Bank Fraud, Money Laundering Charges

CHARLESTON, South Carolina, May 26 -- The U.S. Attorney for the District of South Carolina, Adair F. Boroughs, issued the following news release:

A federal grand jury has returned a 22-count indictment against Richard Alexander "Alex" Murdaugh, 54, of Hampton, for conspiracy to commit wire fraud and bank fraud; bank fraud; wire fraud; and money laundering.

"Trust in our legal system begins with trust in its lawyers," said U.S. Attorney Adair F. Boroughs. "South Carolinians turn to lawyers when they are at their most vulnerable, and in our state, those who abuse the public's trust and enrich themselves by fraud, theft, and self-dealing will be prosecuted to the fullest extent of the law. We are grateful to the FBI for their tireless work on this case and to the South Carolina Attorney General's Office and the South Carolina Law Enforcement Division for their work to hold Alex Murdaugh, and those who enabled him, accountable in our state system. We remain committed to doing our part to further that effort in the federal system."

Murdaugh was a personal injury attorney at a law firm in Hampton, South Carolina. The indictment alleges that Murdaugh engaged in three different schemes to obtain money and property from his personal injury clients.

In one scheme, the indictment alleges that from at least September 2005 until at least September 2021, Murdaugh devised a scheme to defraud and to obtain money by means of false pretenses. The indictment alleges that, as part of the scheme, Murdaugh routed and redirected clients' settlement funds to personally enrich himself, including by:

* Drafting, or directing law firm employees to draft, disbursement sheets to send settlement funds to Murdaugh's accounts without proper disclosure or client or law firm approval;

* Claiming funds held in the law firm's trust account as attorney's fees and directing the disbursement of those funds for his benefit;

* Claiming and collecting attorney's fees on fake or nonexistent annuities;

* Creating fraudulent "expenses" that were never incurred on client matters and directing the disbursement of settlement funds to pay the cited costs, including claimed medical expenses, construction expenses, and airline expenses;

* Directing other attorneys with whom he was associated on client matters to disburse attorney's fees directly to him, rather than appropriately routing the fees through the law firm; and

* Intercepting insurance proceeds intended for beneficiaries and depositing them directly into his personal account.

In a second scheme, the indictment alleges that from in or around July 2011 until at least October 2021, Murdaugh conspired with his banker, Russell Laffitte, to commit wire fraud and bank fraud. The indictment alleges that Murdaugh and his law firm asked Laffitte to serve as personal representative or conservator for numerous personal injury clients. Laffitte collected over $350,000 in fees as personal representative or conservator for Murdaugh's personal injury clients.

As part of the scheme, the indictment alleges Murdaugh directed law firm employees to make settlement checks payable to "Palmetto State Bank." The checks were then delivered to Laffitte, whom Murdaugh directed to use the settlement funds for Murdaugh's benefit. The funds were used to pay off Murdaugh's personal loans and for personal expenses and cash withdrawals.

In November 2022, Laffitte was convicted on six federal charges, including conspiracy to commit wire and bank fraud, bank fraud, and wire fraud for his role in this scheme. He is currently awaiting sentencing.

In a third scheme, the indictment alleges that in September 2015, Murdaugh created a bank account in the name of "Forge," presenting as a legitimate corporation for structuring insurance settlements. Murdaugh was the owner of and the only authorized signer on this "fake Forge" account. The indictment alleges that from in or around May 2017 through at least July 2021, Murdaugh funneled stolen personal injury settlements through the "fake Forge" account. Murdaugh is charged with 14 counts of money laundering for using the transactions in the "fake Forge" account to conceal the proceeds of his fraud.

The indictment further alleges that, from in or around February 2018 until at least October 2020, Murdaugh conspired with a personal injury attorney in Beaufort to defraud the estate of Murdaugh's former housekeeper and Murdaugh's homeowner's insurance carriers. In February 2018, Murdaugh's housekeeper passed away after a fall at Murdaugh's home. Murdaugh recommended that the housekeeper's estate hire the Beaufort attorney to represent them and file a claim against Murdaugh to collect from his homeowner's insurance policies.

Murdaugh's insurance companies settled the estate's claim for $505,000 and $3,800,000. The indictment alleges that Murdaugh and the personal injury attorney conspired to siphon settlement funds, disguised as "prosecution expenses," for their own personal enrichment. The indictment further alleges that Murdaugh directed the Beaufort attorney to draft checks totaling $3,483,431.95 made payable to "Forge." Murdaugh then deposited the checks into his "fake Forge" account and used the funds for his own personal enrichment. The estate did not receive any of the settlement funds.

Murdaugh faces the following charges:

* One count of conspiracy to commit wire fraud and bank fraud, punishable by up to 30 years in prison and a fine of up to $1,000,000;

* One count of bank fraud, punishable by up to 30 years in prison and a fine of up to $1,000,000;

* Two counts of wire fraud, punishable by up to 30 years in prison and a fine of up to $1,000,000;

* Three counts of wire fraud, punishable by up to 20 years in prison and a fine of up to $250,000;

* One count of conspiracy to commit wire fraud, punishable by up to 20 years in prison and a fine of up to $1,000,000; and

* Fourteen counts of money laundering, punishable by up to 20 years in prison and a fine of up to $500,000.

All charges in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

The case was investigated by the Federal Bureau of Investigation and the South Carolina Law Enforcement Division. Assistant U.S. Attorneys Emily Limehouse, Kathleen Stoughton, and Winston Holliday are prosecuting the case.

The case against Murdaugh is No. 9:23-cr-396 (D.S.C.). The case against Laffitte is No. 9:22-cr-658 (D.S.C.).

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Original text here: https://www.justice.gov/usao-sc/pr/alex-murdaugh-indicted-federal-conspiracy-wire-fraud-bank-fraud-and-money-laundering