Carson Burney — Direct/Cross/Redirect/Voir Dire (Recall)
267 linesMR. JAMES: State calls Carson Burney.
The witness, CARSON BURNEY, was first sworn and testified as follows:
COURT CLERK: If you would, please, sir, be seated. State your full name, spell your last name, and then move the microphone as you need.
CARSON BURNEY: Carson Burney, B-u-r-n-e-y.
VOIR DIRE EXAMINATION
BY MR. JAMES:
MR. JAMES: Now it's the afternoon. Good afternoon, Mr. Burney.
CARSON BURNEY: Afternoon.
MR. JAMES: Tell us a little bit with yourself, Mr. Burney.
CARSON BURNEY: My name is Carson Burney, as I mentioned. I've lived in South Carolina a little over twenty years. I graduated from the University of South Carolina 2013 with a degree in finance. In 2015 I went back to USC and completed a six month paralegal certificate program there. 2019 I joined the Department of Revenue as a sales tax auditor, and in 2021 I was hired on as the forensic accountant in the State Grand Jury Division at the South Carolina Attorney General's Office.
MR. JAMES: So, we work together.
CARSON BURNEY: We do. We used to share half offices right next to each other.
MR. JAMES: About how long have you been with the Attorney General's Office again?
CARSON BURNEY: Approximately a year and a half.
MR. JAMES: And about how long were you with the Department of Revenue before you came over to us?
CARSON BURNEY: A little over two years.
MR. JAMES: And say again for me. What is your job title with the AG's Office?
CARSON BURNEY: I'm the forensic accountant in the State Grand Jury Division.
MR. JAMES: Forensic accountant. What is a forensic accountant?
CARSON BURNEY: So a forensic accountant, it's a broad term, but essentially what I do is compile records, primarily financial records that include loans, credit card statements, bank account information, compile that information, and then pass it on typically to law enforcement or the prosecutors in my section.
MR. JAMES: And when you talk about you look at these records, what sort of volume of records are we talking about? Hundreds of pages? Thousands of pages? Ten thousands of pages?
CARSON BURNEY: In this case thousands of pages of records, yes, sir.
MR. JAMES: Thousands of pages.
CARSON BURNEY: Yes.
MR. JAMES: Would it be fair to say tens of thousands of pages?
CARSON BURNEY: Probably, yes.
MR. JAMES: Do you like your job, Mr. Burney?
CARSON BURNEY: I do like it. It can be tedious, but I do like it. I find a sense of fulfillment.
MR. JAMES: Do you have any certifications in connection with your work?
CARSON BURNEY: I do. I am a certified fraud examiner, which is a task essentially you learn and you're tested on different fraud schemes, how to investigate those fraud schemes, the law surrounding that, and then different fraud prevention and deterrence methods.
MR. JAMES: As a forensic accountant, are you familiar with the concept called tracing?
CARSON BURNEY: I am.
MR. JAMES: What is tracing?
CARSON BURNEY: Tracing in the context we're going to talk about, it's looking at the sort of funds and tracing it out through to see where the final disposition of those funds ultimately end up.
MR. JAMES: And in your appointment as a forensic accountant, have you had opportunity to conduct any trace analysis on records provided as part of this case?
CARSON BURNEY: I have. Pretty much all of the alleged stolen money I have traced.
MR. JAMES: All right.
MR. JAMES: Your Honor, the State would at this time qualify Mr. Burney as an expert in the forensic accounting, particularly as to the tracing of funds.
MR. GRIFFIN: Your Honor, we don't have any objections to his qualifications. We would renew our previously -- previous objections on this whole line of testimony under 404.
JUDGE NEWMAN: All right. He's qualified as an expert.
DIRECT EXAMINATION
BY MR. JAMES:
MR. JAMES: Are there different ways of tracing funds, Mr. Burney?
CARSON BURNEY: There are. There are several different methods.
MR. JAMES: What method did you apply in this particular matter?
CARSON BURNEY: I used a -- what's called a first in, first out method. Simply put, the first money into an account that I'm looking at is the first money out. In context of the tracing, it would be the money from the source of the checks and then the money, first money out.
MR. JAMES: Now, and I kind of jumped ahead of myself a little bit. When money is moving around between different bank accounts, the banks aren't transmitting, you know, the serial numbers on particular dollar bills, are they?
CARSON BURNEY: They are not.
MR. JAMES: All right. So, you can't necessary tell that a dollar with the serial number is the same dollar as that serial number and going across the multiple accounts, can you?
CARSON BURNEY: No, you cannot.
MR. JAMES: And so are these methodologies how you go about deciding that a dollar in one account is the same as the dollar from another account?
CARSON BURNEY: That's correct. When you have a bank account, obviously it's a pool of money, so we have to apply some rules to say this money comes from this source.
MR. JAMES: Now, you indicated you used the first in, first out method. Is there any sort of lay explanation or a description you can provide to us?
CARSON BURNEY: Yes. I like to use the example of say you have $10 in your bank account, and for this example we'll say it's legitimate money in that bank account. You go over to grandma's house. You get sticky fingers. You take $10 out of grandma's purse. You put that money in the same bank account. So, now you have co-mingled funds, and we'll call the $10 from grandma's purse illegitimate funds, and then have a transaction. Let's say it's $15. So, you're pulling partially from the $10 you previously had, the legitimate funds, and then $5 out of the $10 from grandma's account. So, that's how the first in, first out method would work.
MR. JAMES: And so under that first in, first out method, what portion of that $15 would come from those legitimate funds, and what portion of that would come from the sticky fingers money?
CARSON BURNEY: The $10 would be the legitimate funds, and then the $5 from grandma's $10 you took and put into your bank account without her permission.
MR. JAMES: What other methodologies are there from the tracing of funds?
CARSON BURNEY: There's the lowest intermediate balance rule. Typically you see it in trust accounts -- trust fund accounting. It's with co-mingled funds, and typically the principle behind that is any withdrawals out of those co- mingled funds are deemed to be personal funds, and the funds remaining in that account would be trust funds. You see it sometimes in bankruptcy proceedings. Another one is the one I mentioned, the first in, first out method. Then you have the reverse, which would be the last in, first out method -- or last in, first out method. And then one I call essentially a proximity rule. You see a large transaction, a large deposit come in and then almost immediately come out with a similar amount. You can draw a conclusion that those funds were to fund that other transaction.
MR. JAMES: So to go over that last one a little bit, if you're looking at a bank account and you see a thousand dollars come in and then right away a thousand dollars come out, would that be the proximity rule that you just described?
CARSON BURNEY: That's exactly correct.
MR. JAMES: And in that circumstance, you wouldn't even necessarily need to apply that first in, first out, or last in, first out, or any particularized math. You just say thousand/thousand. It's all of the same.
CARSON BURNEY: That's correct, yes.
MR. JAMES: Okay. In this particular case, were you asked to look into the deposit of $792,000 into accounts under the control of Alex Murdaugh?
CARSON BURNEY: I was.
MR. JAMES: All right. When was that money deposited into which accounts?
CARSON BURNEY: Can I review my notes?
MR. JAMES: Please do.
(Break in proceedings.)
CARSON BURNEY: Okay. The $792,000 you're referring to has been called the Faris fees in previously -- in previous testimony. It was three different checks all from the Wilson Law Group. The dates deposited were March 10, 2021, March 23rd, 2021, and April 20, 2021. The first check was $192,000, the second $375,000, and the third was $225,000. And all had a check date of March 10, 2021.
MR. JAMES: And, I'm sorry, what was that last date again?
CARSON BURNEY: The last date, the 225,000 was deposited on April 20, 2021.
MR. JAMES: And did you apply any trace analysis to the disbursement of those funds?
CARSON BURNEY: I did.
MR. JAMES: And which form of analysis did you apply to?
CARSON BURNEY: I did the first in, first out method.
MR. JAMES: And without getting into any granular detail of the expenses from the account from that money, what generally was that money extended on?
CARSON BURNEY: So, a large portion of the money was checks to associates, known people to Alex Murdaugh, and then the remaining of the funds primarily we see credit card payments.
MR. JAMES: When was that $792,000 exhausted under that first in, first out analysis?
CARSON BURNEY: So, it was completely exhausted out of the account by May 25, 2021.
MR. JAMES: There has been a lot of attempts at math from the stand over the course of this trial. Am I correct in judging that to be roughly a month apart from the date of the last check deposited?
CARSON BURNEY: Yes, yes. That would be approximately a month from April 20, 2021.
MR. JAMES: So, $792,000 exhausted in just a little bit over a month from the date of last deposit. What was the date of the first deposit again? I apologize.
CARSON BURNEY: The first one was March 10, 2021. So, from that date to the last day, I believe two and a half approximately months.
MR. JAMES: Were there -- into which -- and -- into which account was that deposited again?
CARSON BURNEY: So, the -- all three checks were deposited into a Bank of America account ending in 6779 under the name of Alex Murdaugh.
MR. JAMES: Now let's take a step back and talk a little bit about the accounts of Alex Murdaugh. Is that Alex's only account at Bank of America?
CARSON BURNEY: No.
MR. JAMES: All right. What was his other accounts at Bank of America?
CARSON BURNEY: He had other accounts that have been called the fake Forge accounts. There are two of those accounts, and the accounts seemed to run consecutively. One account ended and then a second one was created. The reason I'm not exactly sure just from looking at the statements but there were two different accounts. There's also a credit card account at Bank of America.
MR. JAMES: And did Mr. Murdaugh have accounts at Palmetto State Bank?
CARSON BURNEY: He did. He had several accounts at Palmetto State Bank.
MR. JAMES: Was there a particular account there that appeared in your analysis to be his primary account?
CARSON BURNEY: Yes, an account ending in 6092, a checking account.
MR. JAMES: Generally speaking, when following funds from Bank of America -- well, let me rephrase that question. Was there any pattern in the flow of funds after they were deposited into either the fake Forge account or into that Bank of America checking account?
CARSON BURNEY: Yes. So, when checks were deposited to the fake Forge account, typically they were transferred out or withdrawn and cashed. If they were transferred out, normally they would go to his personal banking account ending in 6779. Occasionally we would see cashier's checks come out of one of the Forge accounts.
MR. JAMES: Now, on those cashier's checks, would it say, hey, this is from the fake Forge account on the face of it?
CARSON BURNEY: No.
MR. JAMES: When he would cut checks from that personal banking account, would it say, hey, this is stolen money on the face of those checks?
CARSON BURNEY: No.
MR. JAMES: So those who would receive those checks, it would just say something to the effect of Alex Murdaugh or something of that nature?
CARSON BURNEY: That is correct.
MR. JAMES: Aside from those Bank of America accounts, did any money make it to Palmetto State Bank?
CARSON BURNEY: Yes. Occasionally once the checks went into the personal account at Bank of America, another check would be written typically just to Palmetto State Bank, and then ultimately it would be deposited into one of his accounts at Palmetto State Bank.
MR. JAMES: And would the funds thereafter be disbursed from that account?
CARSON BURNEY: Yes.
MR. JAMES: Circling back around to the $792,000 of Faris fees or Mack Truck fees, were you able to determine when any of those fees or replacement fees were returned to Chris Wilson?
CARSON BURNEY: Yes.
MR. JAMES: Can you tell me a little bit about that?
CARSON BURNEY: Yes. So, previous testimony had mentioned a $350,000 wire from Palmetto State Bank that went to the Wilson law group.
MR. JAMES: From which institution did that wire originate?
CARSON BURNEY: Palmetto State Bank.
MR. JAMES: And the last $350,000, were any additional funds provided to Chris Wilson?
CARSON BURNEY: Yes. So in Alex Murdaugh's accounts ending in 6779, we see a check was mobile deposited for $250,000. And then the next day on July 16th of 2021, there was a wire for that same amount of money, $250,000, that went directly to Wilson Law Group IOLTA account.
MR. JAMES: Mr. Griffin?
MR. GRIFFIN: Yeah, no additional objection.
MR. JAMES: I'm showing you a document that is labeled as State's 518. Do you recognize this document?
CARSON BURNEY: I do.
MR. JAMES: And is this the document that you were just describing about a $250,000 instrument deposited into Alex's account?
CARSON BURNEY: That is correct.
MR. JAMES: The state moves to introduce into evidence Exhibit 518.
MR. GRIFFIN: No additional objections, Your Honor.
JUDGE NEWMAN: It's admitted.
(CHECK MARKED AS STATE'S EXHIBIT NUMBER 518 WAS RECEIVED INTO EVIDENCE.)
MR. JAMES: Is that the instrument you were just describing a moment ago?
CARSON BURNEY: It is.
MR. JAMES: Can you pull it down a little bit? We have such a glare. Thank you, Mr. Waters.
MR. JAMES: All right, and that is a check made out to Alex Murdaugh for $250,000. What's the name at the top of the instrument?
CARSON BURNEY: It says John E. Parker.
MR. JAMES: From your work with investigators throughout this case, do you know who John E. Parker is?
CARSON BURNEY: I do.
MR. JAMES: All right, and who is he?
CARSON BURNEY: He is a former law partner of Alex Murdaugh's at what we've been calling PMPED.
MR. JAMES: All right, and right here above Mr. Waters's cuticle, there's something written in the memo line. What does that say?
CARSON BURNEY: It says loan.
MR. JAMES: So on the face of this check, does it purport to be a loan to Mr. Murdaugh?
CARSON BURNEY: It does.
MR. JAMES: So, that adds up to $600,000. Did you identify any additional funds sent back to Chris Wilson's office in replacement of that $792,000?
CARSON BURNEY: I did not.
MR. JAMES: And I apologize, we took that --
MR. JAMES: With the Court's permission, and I suspect without objection from counsel, we've redacted certainly personal identifying account information from the face of this.
MR. GRIFFIN: No objection.
MR. JAMES: What's the date on this instrument, Mr. Burney?
CARSON BURNEY: It is July 15, 2021.
MR. JAMES: And is that the same date as the wire of funds from Palmetto State Bank to Mr. Wilson's trust account?
CARSON BURNEY: It is.
MR. JAMES: In the course of your analysis, you had a -- did you have an opportunity to look at Mr. Murdaugh's balances on or about June 2nd of 2021?
CARSON BURNEY: I did.
MR. JAMES: And did you look at his balances in all of his deposit accounts?
CARSON BURNEY: I did.
MR. JAMES: And did you look at his balances on outstanding loans and lines of credit?
CARSON BURNEY: Yes. All of that I have identified, I've reviewed them, yes.
MR. JAMES: In your opinion, Mr. Burney, on June 7, 2021, across Mr. Murdaugh's deposit accounts and demand lines of credit, did Richard Alexander Murdaugh have $792,000 available to return to Chris Wilson?
CARSON BURNEY: He did not.
MR. JAMES: On that same date, June 7, 2021, across his deposit accounts and his demands lines of credit, did Richard Alexander Murdaugh have $500,000 available to give to the sons of Gloria Satterfield?
CARSON BURNEY: He did not.
MR. JAMES: On June 7, 2021, did Richard Alexander Murdaugh across his deposit accounts and his lines of credit, did he have $10 million available to meet the settlement demands of Mark Tinsley?
CARSON BURNEY: He did not have $10 million.
MR. JAMES: And it might seem obvious, given that we went through each of those individual scenarios, but on June 7, 2021, did Richard Alexander Murdaugh have enough money to fulfill all three of those conditions?
CARSON BURNEY: He didn't. He was not able to fulfill all three conditions, that's true.
MR. JAMES: No further questions for this witness, Your Honor.
JUDGE NEWMAN: We're going to break for lunch now.
(A lunch break was taken.)
JUDGE NEWMAN: Okay. Very good. Cross-examination.
MR. GRIFFIN: Thank you, Your Honor.
JUDGE NEWMAN: Yes, sir.
CROSS-EXAMINATION
BY MR. GRIFFIN:
MR. GRIFFIN: Good afternoon Mr. Burney.
CARSON BURNEY: Afternoon, Mr. Griffin.
MR. GRIFFIN: The -- I want to be sure we understand what you've done. You did, I guess, an analysis of various bank accounts seeing deposits in and money out. Is that correct?
CARSON BURNEY: So for the tracing, it was specifically the alleged stolen funds. I would just trace them out as they went through the bank accounts using that first in, first out method.
MR. GRIFFIN: And did you analyze any accounts that were stolen -- what you contend to be stolen funds were not deposited into?
CARSON BURNEY: There's probably one or two accounts maybe stolen money didn't hit, but any account under Alex Murdaugh's name at Palmetto State Bank and Bank of America, those were the primary two accounts.
MR. GRIFFIN: Were you aware that he earned income as a practicing attorney?
CARSON BURNEY: Yes. Yes.
MR. GRIFFIN: And did you segregate that monthly income?
CARSON BURNEY: Yes. So, what I would do is prior to these funds going into those accounts, using that first in, first out method, I would completely deplete whatever income or deposit was in that account prior so we could separate each check out.
MR. GRIFFIN: And you -- in your testimony here today, you for the most part limited your analysis to the $792,000 of the Faris fees. Is that right?
CARSON BURNEY: Yeah. That's the only tracing we went over.
MR. GRIFFIN: And then in the end you testified about essentially Mr. Murdaugh's -- I guess it was an analysis of liabilities versus assets --
CARSON BURNEY: Right. So --
MR. GRIFFIN: -- and whether he had enough to pay A, B, and C?
CARSON BURNEY: Right. So, what I did for the date of June 7th, the accounts we had, I looked at balances in addition to outstanding loans, so that's how I was able to determine that.
MR. GRIFFIN: And that was just purely balances in financial accounts. Is that right?
CARSON BURNEY: That's correct.
MR. GRIFFIN: And did that include any analysis of his 401(k) or retirement account?
CARSON BURNEY: No. With the balance sheet I had, no, because those were retirement accounts. So obviously, you know, you have tax implications and penalties and fees associated with those.
MR. GRIFFIN: And did that analysis include any -- the value of any real estate holdings?
CARSON BURNEY: So, I was just looking at outstanding what he owed the bank. I didn't have up to date June 7, 2021, appraisals for every land he owned.
MR. GRIFFIN: Sure, and I think we all understood your answer, but your answer was no, it did not include an analysis of any equity in real estate holdings. Is that correct?
CARSON BURNEY: No, because I would not be able to determine that to the date.
MR. GRIFFIN: And your analysis also did not include any interest he may have in real estate partnerships, correct?
CARSON BURNEY: Such as Red Beard and Zero United?
MR. GRIFFIN: Well, let's start there, Red Beard and Zero United.
CARSON BURNEY: So, I just had the loan statements and outstanding principal on that, and as we know they were charged off, I believe, in 2012, and interest was accruing. But this is just a principal balance that I was looking at for those.
MR. GRIFFIN: You didn't look to see what the value of Red Beard was, and the value of United was?
CARSON BURNEY: No. I had no idea what they would have been June 7, 2021.
MR. GRIFFIN: And were you aware that he was a -- had equity interest in a real estate partnership that owned the PMPED law firm building in Hampton?
CARSON BURNEY: I became aware when I saw he was paid out of that account at the end in October, I believe. And then I would see occasionally -- I called them rent checks, I think. Every month or so he would get a few thousand from that ownership.
MR. GRIFFIN: But in your testimony of sort of a snapshot on June 7th, you didn't take into account the value of his interest in the PMPED law firm building.
CARSON BURNEY: So, I was looking at liquid assets. So, would he have the ability that day to pay those amounts.
MR. GRIFFIN: All right. I take it then you also didn't take into account his ability to raise capital through borrowing money from Palmetto State Bank if he needed to.
CARSON BURNEY: So, I was only looking at outstanding loans, so I can't comment whether or not he could. We know after the fact he got a loan from the bank, but I -- you know, at that time I wouldn't know what he was eligible for or not eligible for if he wanted to take out an additional loan.
MR. GRIFFIN: Well, we know before the fact that he had never been turned down for a loan at Palmetto State Bank, correct?
CARSON BURNEY: To my knowledge, no.
MR. GRIFFIN: All right. We know before the fact that he had paid Palmetto State Bank over $4 million in interest payments. We know that.
CARSON BURNEY: I have not calculated that myself, but if that's what you're representing.
MR. GRIFFIN: Okay. Well, we know before the fact that the chairman of the board at Palmetto State Bank's position was if Alex Murdaugh wants a loan from the bank, then we'll make it happen. You're aware of that, aren't you?
CARSON BURNEY: That's my understanding.
MR. GRIFFIN: So, there's no -- and just to be clear, you aren't telling the jury that on June 7th, Mr. Murdaugh's financial freight train was about to go off into the ravine. That's not what you're telling this jury, is it?
CARSON BURNEY: I was looking at the account balances, outstanding loans, the fact that money had to be borrowed to pay back the Chris Wilson fees.
MR. GRIFFIN: And he borrowed money from his partner Johnny Parker. Is that right?
CARSON BURNEY: That's correct.
MR. GRIFFIN: And you know before the fact that Mr. Parker frequently loaned money to other partners in the firm because the cash flow in their business was, you know, not great until the end of the year.
CARSON BURNEY: I know Johnny Parker loaned Alex money. I'm not sure about other partners, but you are correct. He did loan him money.
MR. GRIFFIN: Now, in your analysis of the $792,000, you testified that a large percent of the money went to associates and then other -- I mean, the rest went to pay credit card bills, right?
CARSON BURNEY: Generally speaking, without getting into a granular level data.
MR. GRIFFIN: Sure. Well, can you generally tell me approximately how much money of the $792,000 was sent to Curtis Eddie Smith?
CARSON BURNEY: From my tracing, approximately half a million dollars.
MR. GRIFFIN: Of the 792?
CARSON BURNEY: Of the 792, yes, sir.
MR. GRIFFIN: Okay.
MR. GRIFFIN: One second, Your Honor.
(Break in proceedings.)
MR. GRIFFIN: That's all of the questions I have.
JUDGE NEWMAN: Any redirect?
REDIRECT EXAMINATION
BY MR. JAMES:
MR. JAMES: Mr. Burney, you indicated that you were looking at the liquid assets on June 7, 2021. Is that correct?
MR. GRIFFIN: Objection to leading.
MR. JAMES: Did I understand your testimony a moment ago correctly that that's what you were looking at?
CARSON BURNEY: Yes.
MR. JAMES: Mr. Burney, do you own a home?
CARSON BURNEY: I do.
MR. JAMES: So, you've gone through the process of purchasing land before. Is that correct?
CARSON BURNEY: A couple of times, yes, sir.
MR. JAMES: When you were a buying or -- let me rephrase my question here. Did you ever sell any real estate?
CARSON BURNEY: I have once.
MR. JAMES: Was it an instant process or did it take some time?
CARSON BURNEY: It took months.
MR. JAMES: Months?
CARSON BURNEY: From listing to closing, yes.
MR. JAMES: So, did you get the money for your real estate right when you sold it, or did it take all of the way to closing to get that money?
CARSON BURNEY: It took all the way to closing.
MR. JAMES: So, if Mr. Murdaugh needed money from his real estate interests to sell, would that have taken some time?
CARSON BURNEY: I imagine, yes.
MR. JAMES: Beg a moment of the Court's indulgence.
(Break in proceedings.)
MR. JAMES: Did I hear you correctly a moment ago in your testimony or acknowledge in your testimony the possibility that Mr. Murdaugh paid over $4 million in interest to Palmetto State Bank on various loans?
CARSON BURNEY: That's what Mr. Griffin represented. I had not done the calculations myself.
MR. JAMES: As you indicated a moment ago, what was your aim again in tracing these funds?
CARSON BURNEY: Looking at their ultimate dispositions, where the money went to.
MR. JAMES: Did you start with particular instruments and then go from there?
CARSON BURNEY: I did.
MR. JAMES: And in analyzing where the funds from those instruments went, did a portion of those instruments go to loan payments?
CARSON BURNEY: Yes.
MR. JAMES: At Palmetto State Bank?
CARSON BURNEY: Yes. Loan payments at Palmetto State Bank, and to pay back loans from other individuals.
MR. JAMES: And did a significant portion of those funds go towards paying that four plus million dollars in interest to Palmetto State Bank?
CARSON BURNEY: Yes.
MR. JAMES: And did that represent a significant portion of where the stolen funds were ultimately disposed?
CARSON BURNEY: Yes.
MR. JAMES: No further questions, Your Honor.
MR. GRIFFIN: Nothing, Your Honor.
JUDGE NEWMAN: You may step down. Thank you.
(The witness exited the stand.)
JUDGE NEWMAN: Your next witness.