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Friday, June 14, 2024 | Back issues
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With Murdaugh convicted of murders, prosecutors turn to $9 million fraud case

Alex Murdaugh has been given a life sentence for killing his wife and son, but the South Carolina saga continues as prosecutors turn their attention to a nearly $9 million fraud scheme that ensnared a prominent banker and convicted drug dealer.

CHARLESTON, S.C. (CN) — Dogs bayed as gunfire crackled the night a mother and son were brutally murdered at their hunting estate nestled among the ramrod pines and foggy swamps of the Lowcountry.

Alex Murdaugh, the esteemed attorney and family patriarch, stood alone when authorities first arrived upon a tragedy that would expose decades-old machinations and raise concerns about the prominent family’s powerful grip on the region.

Murdaugh was convicted this month for the gruesome slayings. It took the jury in Walterboro, South Carolina, about an hour to decide the 54-year-old defendant was “blowing snot” from the witness stand when he claimed he would never kill those closest to him, one juror told ABC News.

It ended, for some, a bedeviling mystery that haunted the rural community, but exposed still more questions as jurors learned about the ex-attorney’s sprawling financial schemes.

Murdaugh admitted on the witness stand he stole $8.7 million from his former clients, as well as the family’s century-old law firm, before his wife, Maggie, and son Paul were gunned down on June 7, 2023, at the Moselle estate.

Some fraud victims were crippled in car crashes. Others grieved dead loved ones. He stole from the sons of the housekeeper who helped raise his children and an injured state highway patrolman, he confessed.

Authorities spent more than a year untangling Murdaugh’s money. So far, the paper trail has led to nearly a half-dozen arrests, from a prominent local banker to a convicted drug dealer.

Robert Kittle, a spokesman for the South Carolina Attorney General's Office, said he could not comment on whether the financial investigation continues or if more people may face charges in the conspiracy.

No trials dates are set in the financial case, "but we will be looking at the calendar with the courts to schedule them," he said.

Despite receiving two consecutive life sentences for the murders, Murdaugh will be prosecuted in the financial case, Kittle said.

"Those crimes have victims, and they deserve justice too," he said.

The generous banker

Russell Laffitte was the CEO of Palmetto State Bank, a Lowcountry institution nearly as old as the Murdaugh family’s law firm, before his relationship with the defendant came under scrutiny.

In July, Laffitte became the first defendant to face federal charges in the Murdaugh case when a grand jury indicted him for bank fraud and other charges.

The banker was a generous friend to the cash-poor attorney, authorities say. When Murdaugh’s bank accounts went red, Laffitte readily offered more money in loans sometimes kept off the bank’s books. With the banker’s help, settlement checks intended for Murdaugh’s clients were instead diverted into Murdaugh’s bank accounts or the accounts of his debtholders.

Laffitte testified at his trial in the fall he was an unwitting pawn in the client’s schemes. The jury deliberated for several hours before two members asked to be removed — one so she could take some medication and another because of intense anxiety during deliberations.

As the Thanksgiving holiday loomed, U.S. District Judge Richard Gergel, a Barack Obama appointee, granted the requests and filled the seats with alternates. The reconstituted jury took less than an hour to reach guilty verdicts on all counts.

Laffitte hired new attorneys who have filed two motions for retrials. Gergel dismissed the first motion, which raised issue with the 11th-hour juror swap. On March 9, the defense attorneys requested a new trial based on Murdaugh’s testimony in the murder case that Laffitte “never conspired” with him to steal money.

Murdaugh invoked his right against self-incrimination at Laffitte’s trial.

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The U.S. Attorney’s Office has until March 20 to file a response on the new motion. A sentencing hearing has not been scheduled in the case.

Laffitte remains charged in state court with conspiracy, fraud and computer crimes.

The friendly attorney

Cory Fleming, a suspended Beaufort attorney, was indicted March 18 on allegations he defrauded several insurance companies and the estate of Gloria Satterfield, the Murdaugh family’s former housekeeper.

Satterfield died in an apparent slip-and-fall accident in February 2018 at Moselle. Murdaugh encouraged her sons, Tony Satterfield and Brian Harriot, to sue him after the death so they could collect from his home insurance.

He even recommended an attorney: Fleming.

Fleming was Murdaugh’s former college roommate and the godfather of his late son, Paul. A vice president at Palmetto State Bank, Chad Westendorf, was appointed personal representative of the estate.

Fleming secured two settlements in the case totaling about $4.3 million, but Tony Satterfield testified at Murdaugh’s trial they never saw a “single cent.”

The 33-year-old son met with Westendorf only once, he recalled, and considered Murdaugh his attorney, despite Fleming’s involvement. He said Murdaugh lied about progress in the case, even after the news reported a settlement was reached in the case.

Murdaugh hid the multimillion-dollar settlement in a bank account he opened under the name “Forge,” mimicking the name of a legitimate company that manages settlement accounts.

Former Hampton attorney Alex Murdaugh talks with his defense attorney Jim Griffin on the second day of pre-trial preparations at the Colleton County Courthouse in Walterboro, Tuesday, Jan. 24, 2023. Grace Beahm Alford/The Post and Courier/Pool

The South Carolina Attorney General’s Office alleges Fleming knew about the fraud. The Beaufort attorney allegedly stole nearly $20,000 from the settlement himself, some of which was spent on video game entertainment, a mortgage payment and iTunes.

Murdaugh has claimed Fleming was not involved in his misdeeds. An attorney for Fleming has said her client was duped by Murdaugh.

Meanwhile, state investigators received permission from Gloria Satterfield’s family last summer to exhume the woman’s body as they reexamine the cause of her death. That investigation remains ongoing, the family’s attorneys have said, but the remains have not yet been disturbed.

The disabled trucker

Curtis Smith is a 62-year-old disabled trucker first arrested after Murdaugh was shot in September 2021 on the side of a Hampton County road.

The ex-attorney initially claimed he was attacked by an unknown assailant, but he retracted that story days later for one that was even stranger.

As told at the murder trial, Murdaugh met Smith, his drug dealer, on Sept. 4, 2021, to buy pain pills. He had been forced to resign from the family’s law firm the day before because of the client thefts. Fearing the repercussions of his actions, he asked Smith to kill him.

“I knew all this was coming to a head,” Murdaugh testified. “I knew how humiliating it was going to be for my son. I had been through so much. At the time, in the bad place that I was, it seemed like the better thing to do.”

Murdaugh said Smith agreed and met in a rural area on Salkehatchie Road, where he punctured his car tire to make his death look like a homicide. Murdaugh said he wanted his son to collect from his $12 million life insurance policy, which he believed did not cover suicide.

He handed Smith a .38 caliber pistol and the trucker shot him in the head, he testified. But, to his surprise, he did not die. A passing motorist found the dazed attorney on the side of the road and he was taken to a Savannah hospital for treatment.

Smith was arrested after Murdaugh confessed to staging the shooting. He has maintained in interviews that he did not know about Murdaugh’s suicide plot until he got to Salkehatchie Road. The trucker told investigators he fought with Murdaugh over the gun, it fired and he fled.

Murdaugh and Smith’s financial ties are extensive, prosecutors say. Between 2013 and 2021, Murdaugh wrote Smith at least 437 checks for a total of $2.4 million. Most of the money was used to purchase drugs – Murdaugh estimated he spent $50,000 to $60,000 a week on pain pills – but a significant amount of cash remains unaccounted for, according to charging documents.

The search for the missing money led authorities to arrest two more men, Jerry Rivers and Spencer Anwan Roberts.

The Walterboro men were indicted on seemingly unrelated charges of defrauding the state’s unemployment program and the Paycheck Protection Program, which was created to assist businesses during the Covid-19 pandemic.

But Creighton Waters, lead prosecutor in the Murdaugh case, revealed at their bail hearings in August that the defendants had received checks from Murdaugh. Rivers received $90,000 in 2021 alone, the prosecutor said.

Neither man has been formally charged in the Murdaugh case, but Waters said they were suspected of helping to launder the stolen money.

Rivers, 40, was sentenced in 2014 to a little more than a year in federal prison after pleading guilty to participating in a drug-trafficking conspiracy operating in the Lowcountry.

Smith was on the witness list for Murdaugh’s trial but never testified. He was released on bond in June, but Colleton County Judge Clifton Newman revoked it after the defendant allegedly violated his house arrest and lied at his bail hearing about his finances.

Murdaugh’s defense attorneys revealed in court filings in October that Smith failed a polygraph test when questioned about his role in the murders at Moselle. His defense attorney pointedly said at the time that her client had an alibi – unlike Murdaugh.

Follow @SteveGarrisonPC
Categories / Criminal, Financial, Regional, Trials

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