Federal judge denies Alex Murdaugh's ploy to have feds snatch assets from state of SC

A federal judge has ruled that convicted murderer and confessed fraudster Alex Murdaugh does not have the legal right to request the federal government snatch his seized assets from the State of South Carolina.

Murdaugh, convicted of murder in March and facing more than 100 S.C. State Grand Jury charges, pleaded guilty to similar federal charges on Sept. 22.

But almost immediately after a federal court judge accepted his plea in U.S. District Court in Charleston, Murdaugh's attorneys filed a Sept. 25 motion asking the federal government to seize his assets from the state's civil court, which currently controls them.

On Oct. 17, federal Judge Richard Gergel issued a ruling denying that motion for "three separate and independent" reasons:

∎Murdaugh "has no standing to assert any claim over funds he stole from his clients and which have subsequently been subject to seizure orders in state and federal court."

∎The federal court's forfeiture order and rules of criminal procedure "authorizes the Attorney General to seize certain property but does not require it. This is left to the sound discretion of the Attorney General. A criminal defendant has no authority to demand that the Attorney General or any other officer of the United States Government do his bidding regarding the seizure of his stolen funds."

∎The federal government lacks the authority to take control of funds previously seized under the authority of a state court. The judge's order cited, "Where a state and federal court have a common interest in particular property and an action to seize that property is an in rem action, the United States Supreme Court has ruled that “the court first assuming jurisdiction over the property may maintain and exercise that jurisdiction to the exclusion of the other.”

Prior to the ruling, on Oct. 4, federal prosecutors also responded in opposition, indicating that have no intention to go to battle with South Carolina over Murdaugh's contested assets.

In one of the most complex and remarkable white-collar crime sprees in S.C. history, Murdaugh stands accused of stealing anywhere from $8.5 million to $10 million from family, friends and law clients.

In the wake of a hundred-plus financial and drug charges involving multiple victims, as well a dozen state and federal lawsuits that include a recently settled 2019 wrongful death suit in the boating death of Mallory Beach, Murdaugh's assets were frozen and seized by order of an S.C. civil court judge, then liquidated and placed into a fund for the victims and plaintiffs.

Murdaugh's recent motion beseeched the federal courts to seize those assets so that the state would not "waste" them, but federal prosecutors had a blunt answer to that request this week, asking a federal judge to deny Murdaugh's motion.

"While the Government does intend to seek a forfeiture money judgment totaling more than $10,000,000 at or before Murdaugh’s sentencing, the Government does not intend to seize the assets currently held in the state court Receivership at this time," wrote the U.S. Attorney General's Office. "And even if it were inclined to do so, neither the United States nor this Court can exercise jurisdiction over assets currently under the jurisdiction of the state court..."

The response adds that the federal government is not required to take any action regarding the funds in state court, and that "Murdaugh cannot force the Government to seize any assets, particularly assets over which he has either relinquished or been divested of control."

The state court recently denied a motion for Murdaugh to use a portion of those assets for his ongoing criminal defense legal fees, so his latest motion could be interpreted as a legal maneuver that could allow his attorneys, Richard Harpootlian and Jim Griffin, another shot at requesting funds — but this time from the federal court.

Hampton County Guardian Editor Michael DeWitt, the Greenville News and USA TODAY Network will continue to follow the ongoing criminal and civil cases surrounding the Murdaugh crime saga. Follow DeWitt on Twitter at @mmdewittjr and support his local and national journalism with a digital subscription.

This article originally appeared on Augusta Chronicle: Federal judge denies Alex Murdaugh's ploy to have feds seize SC assets