Top SC lawyer testifies how firm learned Alex Murdaugh was allegedly taking client money
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Alex Murdaugh Coverage
The Murdaugh family saga has dominated the news after another shooting, a resignation and criminal accusations — with Alex Murdaugh at the center of it all. Here are the latest updates on Alex Murdaugh.
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Since graduating from the University of South Carolina Law School in 1993, attorney Ronnie Crosby has won or settled complex legal cases involving violent accidental deaths worth a total of hundreds of millions of dollars.
But nothing had prepared him, he said in a Charleston County courtroom Thursday, for discovering his longtime fellow partner Alex Murdaugh was stealing millions of dollars from the firm’s clients and laundering the money through the firm’s longtime Hampton bank in hopes that no one would notice.
“It was a shocking revelation,” Crosby testified, adding Murdaugh’s level of deceit — to clients and law firm partners — was “mind-boggling” and “unimaginable.”
“He fooled us about who he was,” Crosby said.
Crosby, a partner at what’s now known as the Parker Law Group, was the fourth and final witness in the prosecution’s case this week against Russell Laffitte, the former CEO of the Palmetto State Bank in Hampton County and a childhood friend of Murdaugh’s.
Both are accused of working together to steal client money.
Murdaugh is an unindicted co-conspirator in the Laffitte case. He faces some 90 charges of financial crimes in state court but has not yet been tried on any of them. He also faces charges in the murder of his wife and son. That trial is slated to begin in January.
In order to help prove the case against Laffitte, federal prosecutor Emily Limehouse used Crosby’s testimony to show how Murdaugh moved client money to Laffitte at the bank.
There, Laffitte converted the money to cashier’s checks and money orders for Murdaugh’s use, or put the money into conservatorships, which both he and Murdaugh then used to pay off loans or borrowed money from themselves, prosecutors contend.
Murdaugh even “groomed the accounting staff” to believe the things he was telling them, Crosby testified.
In spring 2021, the law firm’s staff became suspicious of what had happened to a $792,000 fee Murdaugh had earned for the firm earlier that year, money that stemmed from a highway crash lawsuit he won with longtime friend and attorney Chris Wilson.
Murdaugh was supposed to turn that fee over to the firm, according to earlier testimony.
Then, on June 7, 2021, Murdaugh’s wife, Maggie, and son, Paul, were murdered at the family estate in Colleton County. Murdaugh told his firm’s partners that Wilson still had the fee, but because of the shock of the murders, the firm put on hold its efforts to get the money.
On Sept. 2, 2021, law firm staffers found checks on Murdaugh’s desk that were written to Murdaugh from the February trial involving Wilson, Crosby testified.
The next day, on Sept. 3, 2021, the firm confronted Murdaugh and fired him, Crosby testified.
That same day, firm partners notified Palmetto State Bank officials that Murdaugh had been fired.
“We knew Alex had loans there, and the bank was going to have issues., so he might have difficulty paying off any loans he might have had,” Crosby testified.
The disclosure that Murdaugh had mishandled the February fee led the law firm to launch a search of the big cases Murdaugh had handled and look for discrepancies, Crosby testified.
During its investigation, Crosby testified, the firm:
▪ Discovered emails between Murdaugh and Laffitte, in which Murdaugh was apparently giving Laffitte instructions on what to do with some of the money he had won for clients, money that had been disbursed to Palmetto State Bank and had been put under Laffitte’s stewardship.
▪ Requested and received documentation from Palmetto State Bank showing that some of the money in Murdaugh’s former clients’ conservatorships was going to buy money orders and cashier’s checks that had no relation to any of the clients’ interests. In fact, some checks were being written to pay back money Laffitte and Murdaugh had borrowed from the conservatorships, according to government exhibits introduced at trial.
“Had I known he (Murdaugh) was converting checks for (his) own use and laundering this money through a bank, he would have immediately been reported to law enforcement and kicked out of the law firm,” Crosby said. “All I had to see was one (check) and I would see it was the most highly improper thing a lawyer could do.”
Once a lawyer handles a case for a client, gets the money and disburses the money, the lawyer’s relationship with the client is over, Crosby testified. Money is then given to the client, or often in a case involving minors, put into a conservatorship.
“We have completed what it is that we were supposed to do,” Crosby said.
A mysterious $680,000 check
In October 2021, Laffitte dropped by the law firm’s offices with a check for $680,000, Crosby testified.
The check represented half of some $1.2 million that had been taken out of a multimillion-dollar settlement account for Arthur Badger, Murdaugh’s former client. The account had been managed by Laffitte.
“He (Laffitte) showed up with it. He said, ‘Part of this is on the bank. We will split it with you,’” Crosby testified, adding partners were mystified at Laffitte’s action. “We were all taken aback (that) he was giving us $680,000. ... I was unsure what the meaning of ‘this is on the bank’ was.”
Money taken out of Badger’s account was being used to pay back money taken out of a conservatorship for Hannah Plyler, a minor whose account of settlement funds for a car wreck was managed by Laffitte.
Murdaugh had been one of the lawyers in that case, according to testimony.
Once the firm realized a total $1.3 million it had received for Badger had not been turned over to him, it located him and paid the full amount from firm funds. The firm cashed $680,00 check Laffitte gave it but has not yet spent it, Crosby testified.
The firm apologized to Badger, told him a member of the firm had stolen the money from what was owed to him and told him he had the right to consult a lawyer about the situation, he testified.
“Nobody from the bank ever asked us to give the money ($680,000) back,” he testified.
Crosby also testified about how tight-knit a society Hampton is, a place where everyone knows everyone.
“With Russell and his family, I have had a banking relationship and a social relationship,” Crosby testified. “Russell has been in my house for social gatherings.”
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