Chapter 49:

Professor Quirell [sic] leaned back, smiling. "This is not a puzzle you can solve on your own, Mr. Potter, so I will reveal the answer. Over the winter holiday, I was alerted to the fact that the Headmaster had filed a request for a closed judicial panel to review the case of one Mr. Rubeus Hagrid, whom you know as the Keeper of Keys and Grounds at Hogwarts, and who was accused of the murder of Abigail Myrtle in 1943."

"Oh, of course," said Harry, "that makes it downright obvious that I'm a Parselmouth. Professor, what the sweet slithering snakes -"

"The other suspect for that murder was Slytherin's Monster, the legendary inhabitant of Slytherin's Chamber of Secrets. Which is why certain sources alerted me to the fact, and why it caught my attention sufficiently that I spent a good deal of bribe money to learn the details of the case. Now in point of fact, Mr. Potter, Mr. Hagrid is innocent. Ridiculously obviously innocent. He is the most blatantly innocent bystander to be convicted by the magical British legal system since Grindelwald's Confunding of Neville Chamberlain was pinned on Amanda Knox. Headmaster Dippet prompted a student puppet to accuse Mr. Hagrid because Dippet needed a scapegoat to take the blame for the death of Miss Myrtle, and our marvelous justice system agreed that this was plausible enough to warrant Mr. Hagrid's expulsion and the snapping of his wand.

In canon, Hagrid had brought the giant-spider Aragog at around the same time -- and it was thought to have accidentally escaped his watch and murdered Myrtle. (so it was accident/criminal negligence on the part of Hagrid, murder on the part of Aragog)

We don't know the exact details in the HPMOR-verse, ofcourse.