Former banker Russell Lucius Laffitte, 54, of Estill, South Carolina, has been sentenced to five years in federal prison after pleading guilty to several charges including conspiracy to commit wire fraud and bank fraud, wire fraud, bank fraud, and three counts of misapplication of bank funds.
“As of today, Russell Laffitte and Alex Murdaugh have both been sentenced to federal prison, and their victims have been made financially whole,” said Bryan Stirling, U.S. Attorney for the District of South Carolina. “The victims put their trust in Laffitte and Murdaugh after suffering serious injuries and losing loved ones, and they were exploited for financial gain. We appreciate the dedicated work of our partners at the FBI, SLED, and South Carolina Attorney General’s Office in ensuring justice for them.”
Laffitte was an officer at Palmetto State Bank in Hampton. His co-conspirator Alex Murdaugh worked as a personal injury attorney at a law firm in the same town.
According to court documents, Laffitte agreed to serve as conservator and personal representative for several clients of Murdaugh with knowledge that he would profit from these roles. Starting in 2011, he began issuing loans from accounts he managed as conservator both to himself and Murdaugh without informing those whose money he oversaw.
Murdaugh orchestrated a scheme where client settlement checks were made payable to Palmetto State Bank instead of directly to clients. These checks came from the law firm’s client trust account with memos indicating the intended recipients.
For two clients where Laffitte served as conservator, he saw disbursement sheets specifying that settlement funds should go to the bank but allowed Murdaugh to use those funds for personal purposes such as paying off previous loans taken from conservatorship accounts. In total, nine transactions were negotiated by Laffitte for Murdaugh’s benefit despite knowing they belonged to clients.
Laffitte also facilitated structuring transactions involving another check belonging to one client by distributing funds per Murdaugh’s instructions for his own benefit.
With respect to a third client represented by Murdaugh, Laffitte processed 12 separate transactions totaling $1.325 million in settlement funds which were used by Murdaugh for various personal expenses including loan repayments and purchases.
From these three clients alone, Laffitte received $75,000 in conservator fees plus $35,000 as personal representative fees but did not report this income on his tax returns. He structured transactions so that fee payments went through Palmetto State Bank rather than directly into his name in order to conceal them from authorities.
In 2015 Laffitte used over $284,000 from a line of credit meant for farming operations instead toward repaying outstanding loans owed by Murdaugh from conservatorship accounts.
Further misuse occurred when Laffitte authorized a $750,000 loan ostensibly for beach house renovations but transferred part of those proceeds elsewhere—including covering overdrafts unrelated to renovations—and later paid $680,000 out of bank funds without board approval attempting settlement with the law firm once thefts were discovered.
Before sentencing took place Laffitte paid more than $3.5 million in restitution; he will also surrender nearly $86 thousand dollars more through forfeiture. His plea agreement bars him from working or serving on boards at federally insured banks or credit unions unless granted permission.
United States District Judge Richard M. Gergel handed down a sentence totaling 60 months imprisonment followed by three years supervised release along with orders requiring payment of a $20 thousand fine plus special assessments totaling $600.
The case was investigated by the FBI Columbia Field Office alongside South Carolina Law Enforcement Division (SLED). Assistant U.S. Attorneys Emily Limehouse, Kathleen Stoughton and Winston Holliday prosecuted.
