COLUMBIA, S.C. — Suspended Hampton lawyer Alex Murdaugh, in an answer filed in Colleton County Friday, declined to respond to his former law firm’s allegations that he funneled money stolen from clients and his former law firm into a fake bank account for years.
In the two-page filing, Murdaugh asserted his constitutional privilege against self-incrimination in response to an embezzlement lawsuit filed last month by Peters, Murdaugh, Parker, Eltzroth and Detrick (PMPED), the law firm founded by Murdaugh’s great-grandfather in 1910.
That right not to comment is enshrined in the 5th Amendment in the U.S. Constitution’s Bill of Rights.
Murdaugh does not face criminal charges in the alleged theft of law firm money but the S.C. Law Enforcement Division is investigating.
The law firm has not made public how much money it believes Murdaugh stole.
But sources familiar with the case estimated the amount to be as high as $10 million or more.
The law firm’s civil lawsuit alleged that Murdaugh “was able to covertly steal... funds by disguising disbursements from settlements as payments” to Murdaugh’s fraudulent account.
Murdaugh’s response, filed by attorneys Jim Griffin and Dick Harpootlian, made clear that the once-prominent Murdaugh, who was head of the state trial lawyers association several years ago, will remain mum to the accusations — at least for now.
PMPED’s lawsuit against Murdaugh, filed Oct. 6, came one day after court documents indicated the firm could be implicated in Murdaugh’s scheme to divert a multimillion-dollar settlement away from the heirs of his former housekeeper.
No attorneys from the law firm were available to comment on Murdaugh’s response Friday afternoon.
IPMPED put a public notice on its web site that acknowledged the thefts. In a statement in September, the firm said Murdaugh submitted false documentation to the firm and clients that allowed him to funnel stolen money into “fraudulent bank accounts.”
Murdaugh, the statement said, used firm assets “in an unauthorized manner and without the consent or knowledge of his former partners to further his scheme to defraud.”
The firm’s lawsuit seeks to find out where Murdaugh’s alleged stolen money went and “if any of it is hidden away,” the statement said.
PMPED also wants to know whether Murdaugh has signed any agreements that would allow him to make money from books, interviews or other publicity, the statement said.
The Hampton law firm is represented by Columbia lawyers Jamie L. Walters and John Koon of Koon, Cook & Walters LLC.
In its lawsuit against Murdaugh, the law firm indicated it discovered Murdaugh’s alleged theft by accident.
“On Sept. 2, 2021, a check was found on his (Murdaugh’s) desk” made payable to Alexander Murdaugh from another law firm, the PMPED lawsuit said. Checks for legal work should have been made out to the firm, the lawsuit said.
“According to the notation on the check, it was a partial payment of the fees at issue,” the lawsuit said. “However... it had been deposited into a personal account for Alex Murdaugh and not PMPED.”
“This discovery prompted a review of prior settlements of cases Murdaugh resolved. This review showed numerous checks” with questionable notations, the lawsuit said.
Questions to Murdaugh about the unpaid fee “failed to produce a satisfactory explanation.”
“This review showed numerous checks made payable to ‘Forge’ or ‘Forge Consulting, LLC’,” the lawsuit said.
Forge Consulting, an Atlanta-based company that is well known in South Carolina’s legal community, helps structure settlements to stretch over a period of time and has worked often with PMPED clients, the filing says.
Although Murdaugh used the name “Forge” on his bank accounts, it was not at all the same as the legitimate Forge Consulting, the lawsuit said.
The legitimate Forge had “no knowledge” that Murdaugh was using its name for a personal bank account, the lawsuit said.
Forge told PMPED that it had not worked with Murdaugh on that case, nor ever structured any attorney’s fees for him. On the morning of Sept. 3, the law firm confronted Murdaugh, the suit said, and he “admitted to converting monies owed to PMPED and its clients to his own personal use.”
The firm said it immediately demanded his resignation.
In the days after, PMPED said it notified the Hampton County Sheriff’s Office and the S.C. Law Enforcement Division.
The firm also told the S.C. Supreme Court Office of Disciplinary Counsel. An investigation is underway, and Murdaugh’s law license has been suspended.
PMPED has also employed a forensic accounting firm to review all of Murdaugh’s financial activities. It has reimbursed clients, as well, the firm says.
However, the lawsuit indicated that PMPED does not know the extent of the money taken.
“It is anticipated that additional information may become known that could lead to more losses to PMPED as it protects its clients’ interests,” the lawsuit said.
PMPED’s lawsuit states that Murdaugh was able to get away with this for years through a personal Bank of America account titled “‘Alexander Murdaugh d/b/a Forge’, a (fictitious) entity that provides no services and makes no products for sale.“
He used “Forge” on the checks to evade detection, the lawsuit said.
Forge released a statement in September saying it had “no involvement in or knowledge of the alleged inappropriate conduct of Alex Murdaugh.”
Murdaugh allegedly used a similar tactic of signing checks with the “Forge” name and diverting insurance money that was intended for the sons of his former housekeeper, who died after an alleged fall on the Murdaugh property in 2018.
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