The man who once headed a highly respected bank in the South Carolina Lowcountry will spend seven years in federal prison for helping convicted murderer Alex Murdaugh steal nearly $2 million from clients' legal settlements.
Russell Laffitte was sentenced Tuesday after a jury found him guilty of six charges related to wire and bank fraud back in November. The ex-CEO of Palmetto State Bank became the first of the disgraced former attorney's accomplices to face prison time following the June 2021 shooting deaths that stemmed from sprawling investigations into the Murdaugh family finances.
Recommended Videos
U.S. District Judge Richard Gergel also ordered Laffitte to pay more than $3 million in restitution, local media reported. Murdaugh will cover a piece of that sum. The former banker has said he will appeal the decision.
Murdaugh is serving life without parole for killing his wife, Maggie, and their son, Paul, at the kennels on their 1,700-acre rural estate. Still outstanding are more than 100 other charges encompassing alleged financial crimes from insurance fraud to tax evasion. His trial this winter marked the swift fall from grace for a powerful family whose members served over 80 years straight as the elected prosecutors in tiny Hampton County.
Laffitte similarly came from a prominent family that had built an upstanding reputation for Palmetto State Bank. The Independent Banks of South Carolina even honored Laffitte as the banker of the year in 2019.
But that good standing tanked over his actions as the court-appointed safeguard for settlement money that Murdaugh won for some of his most vulnerable clients. Prosecutors argued he used the role to elaborately pocket tens of thousands of dollars and collect as much as $450,000 in untaxable fees. The position also allowed him to send large chunks toward Murdaugh — who had grown desperate to repay mounting loans as an opioid addiction further depleted his accounts.
Laffitte acknowledged by name each victim sitting in the Charleston federal courthouse on Tuesday, local media reported. He apologized for not fulfilling his duties to them. He apologized to the judge for erring in his judgment. And he apologized to Palmetto State Bank customers for failing them.
Still, Laffitte continued to maintain his innocence. He has insisted for months instead that he didn’t know he was committing crimes and was manipulated by a major customer.
The defense sought a reduced sentence of three to five years imprisonment. Relatives, friends and business acquaintances vouched for his character in letters submitted to court. His lawyers pointed to his professional ruin and lack of prior criminal record as evidence that a stiff penalty is not necessary to deter future crimes.
“In addition, the name ‘Russell Laffitte’ is now known throughout South Carolina and beyond, and not in a good way — Russell will be forevermore tied to Mr. Murdaugh and known infamously as 'the Murdaugh banker,” they wrote in a July 28 memo.
Prosecutors asked the judge to put Laffitte behind bars for at least nine years. Rebuffing the claims of ignorance, they noted that the diverted checks were made payable to Palmetto State Bank and not Laffitte as the overseer of the funds. The sophisticated move, they argued, intentionally concealed the final destination.
A lengthier prison stay is also necessary to atone for the damaged public trust in banking, prosecutors wrote in a July 27 memo.
“The Government does not dispute that Murdaugh is the more culpable actor in the criminal conspiracy, or that Murdaugh benefited more from the scheme," the prosecution wrote. "But the Defendant was the only person who could have stopped him. Instead, the Defendant enabled him. Repeatedly.”
___
James Pollard is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.