CHARLESTON, SC — A banker accused of helping disbarred attorney Alex Murdaugh extort money from clients’ legal settlements was convicted Tuesday night of wire and bank fraud charges in South Carolina.
Former Palmetto State Bank CEO Russell Laffitte has been allowed to remain free on bond while awaiting sentencing at a later date. Each of the six charges for which he was convicted in federal court carries a maximum sentence of up to 30 years in prison.
It was the first trial involving Murdaugh’s sprawling legal drama to captivate true crime audiences.
Murdaugh is accused of killing his wife and son and his murder trial begins in January. He also faces nearly 100 other charges ranging from money laundering to drug offenses, customer robbery and trying to arrange his own death so that his surviving son gets a $10 million life insurance benefit.
And while Murdaugh, 54, was not in federal court in Charleston, he loomed over Laffitte’s trial.
Laffitte, 51, did not deny that his handling of Murdaugh’s finances helped the lawyer steal from clients, but he testified in his own defense during his federal trial that he was duped, according to news outlets.
When a prosecutor asked Laffitte if he stole, he replied: “I did, but not on purpose.”
Prosecutors had to prove that Laffitte knowingly participated in the fraud in order to convict him.
Prosecutors said Laffitte knew what he was doing when he was effectively working as Murdaugh’s personal banker and eventually became the court-appointed custodian for the settlement money for several of his underage clients.
Laffitte loaned himself and Murdaugh money from those settlements, diverting that money from personal injury or death cases.
Murdaugh had a plan to steal the money, but needed someone organized and detail-oriented to avoid being caught easily, prosecutor Emily Limehouse said in her closing statement.
“None of this would have happened without Alex Murdaugh, but none of this could have happened without the defendant,” Limehouse said.
Through both the testimony of Laffitte and other witnesses, the defense attorneys tried to show that the banker was only trying to follow the instructions of one of his main clients and that he was lied to and manipulated.
“He admits to doing it all,” defense attorney Matt Austin said in his closing statement. “He just doesn’t believe he was committing a crime.”
But prosecutors said Murdaugh was giving Laffitte’s written checks to the bank rather than to clients, allowing the lawyer to divert cash to people he owed money to, whether it was his law firm who he was stealing money, from other clients whom he had already stolen money from or from family members.
That also allowed Laffitte to avoid paying taxes.
Laffitte was convicted of one count of bank fraud, wire fraud and conspiracy, plus three counts of bank embezzlement. He also faces 21 counts of financial crimes in state court.
Murdaugh was disbarred and Laffitte was fired last year.
the murdaugh murder case even the Laffitte trial made an appearance. Murdaugh’s wife, Maggie, 52, and her 22-year-old son, Paul, were shot to death with different weapons on June 7, 2021, outside a family home in Colleton County.
A Laffitte bank employee testified that she confronted Murdaugh about missing fees of one of his cases hours before the murders. Neither Laffitte’s prosecutors nor murder investigators have said whether they see a link between the events.
Both Murdaugh and Laffitte are from little hampton county. Murdaugh’s family law firm dominated the legal community and her father, grandfather and great-grandfather were the area’s elected prosecutors for 87 years in a row.
Laffitte’s family built Palmetto State Bank, earning an excellent reputation that led to her receiving honors such as being named Banker of the Year by Independent Banks of South Carolina in 2019.
And, as in many small towns, their families became intertwined. The law firm employee who confronted Murdaugh about the money lost the day his wife and son died was Jeanne Seckinger, Laffitte’s sister-in-law.
More than a third of the witnesses in Laffitte’s trial were his relatives, and most of them testified for prosecutors.