Russell Laffitte, Conspiracy and Wire Fraud, South Carolina 2023

In a shocking case of financial deceit, former banker Russell Lucius Laffitte, 54, of Estill, has been sentenced to five years in federal prison for conspiracy to commit wire fraud and bank fraud; wire fraud; bank fraud; and three counts of misapplication of bank funds.

CHARLESTON, S.C. — Laffitte was an officer and executive at Palmetto State Bank in Hampton, South Carolina. His co-conspirator, Alex Murdaugh, was a personal injury attorney at a law firm in Hampton.

Laffitte admitted that he agreed to serve as conservator and personal representative for several of Murdaugh’s clients, knowing that he would personally profit from doing so. Beginning in 2011, Laffitte began extending himself and Murdaugh loans from conservator accounts Laffitte was charged with managing. Laffitte did not disclose the loans to the conservatees, despite owing them a fiduciary duty.

As to two of Murdaugh’s clients, Laffitte—their conservator—saw their disbursement sheets and knew that the bank was supposed to receive their settlement funds. Murdaugh presented the clients’ checks to Laffitte and directed that they be used for Murdaugh’s personal benefit, including to pay off loans Laffitte had extended from conservator accounts. Laffitte negotiated nine separate transactions for Murdaugh’s benefit, knowing that the funds belonged to the clients.

Laffitte also aided and abetted the structuring of transactions from a second check belonging to one of the clients, disbursing the funds at Murdaugh’s direction and for Murdaugh’s personal benefit. As to a third client of Murdaugh’s, Laffitte negotiated 12 separate transactions, disbursing $1,325,000 in client settlement funds for Murdaugh’s benefit.

Bryan Stirling, U.S. Attorney for the District of South Carolina, stated, ‘As of today, Russell Laffitte and Alex Murdaugh have both been sentenced to federal prison, and their victims have been made financially whole.’

Laffitte received $75,000 in conservator fees and $35,000 in personal representative fees from these three clients. He intentionally failed to report this income on his tax returns, knowing that he could hide the income because the fee checks were drafted to Palmetto State Bank rather than to him personally. Laffitte also structured transactions to avoid reporting requirements and intentionally failed to file suspicious activity reports.

Palmetto State Bank, the bank Laffitte worked for, was the victim of Laffitte’s crimes. He misapplied bank funds by extending over $284,000 from a line of credit that was supposed to be for farming to repay Murdaugh’s remaining loans from the conservatorship.

In 2023, Laffitte misapplied bank funds again, this time extending Murdaugh a $750,000 loan for the stated purpose of beach house renovations, but instead authorized a $350,000 wire transfer to an attorney and then transferred $400,000 of ‘loan proceeds’ to Murdaugh’s account to cover over $367,000 in overdraft, knowing that these funds had nothing to do with beach house renovations.

The case against Laffitte serves as a stark reminder of the importance of financial integrity and the consequences of betraying that trust.

Source: https://www.justice.gov/usao-sc/pr/russell-laffitte-sentenced-5-years-conspiracy-wire-fraud-bank-fraud-and-misapplying-bank