Russell Laffitte, a once-respected, well-to-do Lowcountry banker, pleaded guilty in federal court Friday to six counts of bank-related thefts totaling more than $3.5 million, which he stole with notorious swindler and convicted killer Alex Murdaugh.
Laffitte’s plea before U.S. Judge Richard Gergel marked the end of a three-year saga in which he was fired from his family’s Palmetto State Bank, indicted by a federal grand jury for victimizing bank customers, asserted his innocence, stood trial and was found guilty, served 14 months of a seven-year prison sentence, and won a new trial on appeal. The new trial was scheduled to begin May 5.
Until this week, Laffitte, 54, had maintained his image as a gullible but innocent victim who was duped by the smooth-talking Murdaugh, a lawyer and major customer of the bank. Murdaugh has previously pleaded guilty in state and federal court to $10 million in financial fraud, including at Laffitte’s bank and elsewhere. Murdaugh was disbarred in 2022.
Laffitte’s retrial will now be postponed following his admission in Charleston federal court that he used his bank to assist Murdaugh in laundering stolen money. He will be sentenced at a later date.
Prosecutors and defense attorneys have already agreed to a five-year prison sentence for Laffitte. Judge Gergel said Friday he will accept the sentence.
Laffitte, who left the courthouse yard via a remote exit to avoid reporters and photographers, will also be required to pay $3.55 million in restitution and a $85,854 money judgment.
During the 45-minute hearing, Laffitte stood beside his Columbia attorney, Mark Moore, answering numerous questions from Judge Gergel about the rights to a public trial and the presumption of innocence, which Laffitte was giving up with short, “I do, your honor” and “Yes, your honor” responses.
More than a dozen friends and Laffitte family members appeared in court to support the former banker, whose family has run the Palmetto State Bank in Hampton County for over a century.
Judge Gergel concluded the hearing by saying, “The plea is therefore accepted, and the defendant is now adjudged guilty of the offenses.”
Gergel’s statement came after a lengthy reading of the charges against Laffitte and a detailed summary of the plea agreement, which were followed by a recitation of the evidence by lead federal prosecutor Emily Limehouse. She named Laffitte’s victims and described how he cheated them.
Following the hearing, Limehouse told reporters outside the courthouse that she had no idea why Laffitte had changed his mind and agreed to plead guilty after insisting for years that he was innocent.
However, if Laffitte had requested a retrial, Limehouse stated, “We did expect to have some additional evidence that was not presented at the prior trial, but I can’t say whether that made a difference.”
Laffitte, who knew how to use his bank to launder money, was critical to Murdaugh’s swindling schemes, Limehouse said at a press conference following the hearing.
“As we have said many times, these crimes would not have happened without Alex Murdaugh, but they could not have happened without Russell Laffitte and Murdaugh’s other enablers,” said Limehouse, who appeared alongside prosecutor Katie Stoughton and FBI agent Josh Loomis on the case.
Meanwhile, in the parallel universe of state criminal court, Laffitte and his lawyers are negotiating with prosecutors from the State Attorney General’s office to resolve numerous fraud charges brought against him by a state grand jury. An announcement on the charges could come as soon as next week.
Murdaugh, an unindicted co-conspirator in Laffitte’s case, would funnel large sums of money won in settlements for Murdaugh’s clients in car accident cases to Laffitte’s bank in the vast scheme to which he pleaded guilty on Friday. Once in the bank, Laffitte transferred the funds to accounts controlled by himself or Murdaugh. Then they would either steal the money or lend it to themselves.
In some cases, Laffitte also managed money for Murdaugh’s clients, earning approximately $450,000 in fees over a 10-year period. He failed to pay taxes on those fees, according to prosecutors.
According to prosecutors, Laffitte could have stopped Murdaugh’s stealing spree but instead allowed him to bankroll them both with money stolen from Murdaugh’s clients. All of Murdaugh’s former clients were vulnerable in some way, whether they were minor children, the elderly, or homeless. However, Laffitte also stole from his bank and assisted Murdaugh in stealing from his law firm.
Those whose money was stolen or misappropriated included:
- . Arthur Badger is the victim of Laffitte and Murdaugh’s $1.3 million theft. Murdaugh had obtained the funds for Badger through a settlement in a car accident case in which his wife died, leaving six children.
- . Alania Plyler Spohn and Hannah Plyler were 12 and 8 years old when their mother and older brother were killed when the car they were in collided with a thicket of trees due to a faulty tire. Murdaugh arranged a multimillion-dollar settlement for the sisters, which included annuities and nearly $1 million in Palmetto State Bank accounts. Murdaugh and Laffitte then went on to plunder the bank accounts for loans, repaying the original amounts through other settlements Murdaugh secured.
- . Natarsha Thomas, for whom Murdaugh obtained a $408,000 settlement following a car crash. Murdaugh gave her $83,000 but did not inform her that she would receive an additional $325,000. Murdaugh and Laffitte used the $325,000 to replenish accounts that they had previously depleted.
- . Hakeem Pinckney, a quadriplegic, was injured in a car crash. Laffitte and Murdaugh stole $309,000 from his settlement proceeds, with Laffitte paying himself $60,000 in conservatorship fees.
Laffitte, a fourth-generation banker, began as a teller at his family’s bank in 1997 and rose through the ranks to become CEO.
In 2019, Laffitte was named Banker of the Year by the Independent Banks of South Carolina. According to court records, Laffitte’s assets in 2023 were more than $10 million, including $6 million in Palmetto State Bank stock, $100,000 in Bank of America stock, and $1 million in his 401K. He also had approximately $5 million in liabilities.
Laffitte and Murdaugh were childhood friends, with Murdaugh’s father serving as Laffitte’s godfather. Murdaugh was a fourth-generation member of his law firm.
For generations, Laffitte’s bank and Murdaugh’s law firm served as Hampton County’s financial pillars.
Laffitte has been represented by a legal team that includes two of the state’s top criminal defense attorneys, Mark Moore and Shaun Kent. Both accomplished the rare feat of winning jury trials in federal court. Federal prosecutors have vast resources and carefully select their cases, so most people charged with federal crimes plead guilty rather than face a trial.
Moore, a former federal prosecutor, served as co-counsel in a federal criminal case in which two Conway chiropractors were acquitted of defrauding BlueCross BlueShield of South Carolina of hundreds of thousands of dollars.
Kent secured a significant acquittal for his client, Eric Robinson, in a high-profile federal corruption trial in Columbia involving high-ranking officials at South Carolina State University. Robinson was the only defendant out of more than half a dozen who did not plead guilty or be found guilty.
The charges to which Laffitte pleaded guilty on Friday are:
- Conspiracy to commit wire and bank fraud. Laffitte knowingly collaborated with Murdaugh from 2011 to 2021 to carry out an illegal scheme to steal money from Palmetto State Bank.
- Bank fraud. In 2013, Laffitte and Murdaugh unlawfully manipulated bank funds.
Wire fraud. In 2013, Laffitte and Murdaugh illegally took money from one bank account and transferred it to Murdaugh’s personal account. - Misapplication of bank funds. In October 2021, Laffitte unlawfully transferred $680,000 from Palmetto State Bank to Murdaugh’s law firm, Peters, Murdaugh, Parker, Eltzroth & Detrick. It is now known as the Parker Law Group.
- Misapplication of bank funds. Laffitte gave Murdaugh a $750,000 commercial loan in July and August 2021, claiming it was for beach house renovations, despite knowing the loan was unsecured and would be used to pay a debt to a lawyer friend of Murdaugh’s and to cover overdrafts at Murdaugh’s Palmetto State Bank account.
- Misapplication of bank funds. In February 2015, Laffitte extended Murdaugh a $500,000 line of credit, ostensibly for “farming.” Laffitte then issued a $284,787 check from the line of credit, knowing that the funds would be used to repay loans.
Jan Malinowski, executive vice president of Palmetto State Bank, attended the hearing alongside the bank’s attorney, Greg Harris. Both declined to comment on leaving the courthouse.
In addition to Limehouse and Stoughton, Winston Holiday is the other federal prosecutor working on the case.
In addition to Moore and Kent, Laffitte’s lawyers are Michael Parente and Cheryl Shoun.
The FBI, the South Carolina Law Enforcement Division, and the state Attorney General’s office all looked into Laffitte.
