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Ex-SC banker Russell Laffitte found guilty in fraud trial that put Murdaugh in spotlight

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Former South Carolina bank CEO Russell Laffitte was found guilty Tuesday of all six counts of bank and wire fraud, ending three-week trial that put disgraced attorney and accused murderer Alex Murdaugh in the spotlight.

The jury pool of seven men and five women deliberated for almost 11 hours before rendering their verdict, which was announced in a hushed courtroom after 9 p.m.

Laffitte, 51, faced six charges: one count alleging that he conspired with Murdaugh to commit numerous acts of bank and wire fraud; one count of bank fraud; one court of wire fraud; and three counts of misapplication of bank funds, alleging he had illegally spent or extended more than $1.8 million in bank money on Murdaugh’s behalf.

The trial played out over three weeks, as lawyers introduced more than 300 exhibits to the jury from spreadsheets, canceled checks, charts and bank statements.

Only twice did jurors emerge from their deliberation room Tuesday, at one point to ask that the court provide them with a transcript of Laffitte’s five hours of testimony for their review, and again to hear a 10-minute recording previously played in the trial. Gergel only allowed jurors to hear the short recording.

After nine hours of deliberation, shortly after 8 p.m. Tuesday, jurors sent the judge note that a “hostile” juror was refusing to engage in deliberations and was refusing to follow some of the the judge’s instructions, resulting in a private meeting with Judge Richard Gergel.

Eventually, Gergel announced he had excused two jurors, including one who needed to take an antibiotic and another who said she had been suffering from anxiety and could no longer function as juror.

“We’re in virgin territory,” Gergel said. “I’ve tried 100 cases myself and I’ve been on the bench for 13 years. And I’ve never seen anything like this.”

Thirty minutes before 9 p.m. Tuesday, the jury — this time with two of three alternates — went back to deliberating.

What testimony showed

Over the three weeks, federal prosecutors also put up 15 witnesses. The defense presented nine, including Laffitte.

Laffitte, 51, spent more than five hours on the witness stand in his own defense, using his down-home, slow-talking way to portray himself as a simple country banker who trusted folks before undergoing a grueling cross-examination by lead prosecutor Emily Limehouse.

The trial, held in Charleston federal court, exposed the cozy inner workings of Palmetto State Bank, where Laffitte was CEO, and Murdaugh’s former law firm, what was known as Peters, Murdaugh, Parker, Eltzroth & Detrick.

Testimony, at many times, showed how top officials at the bank and the firm worked at times to cover up self-dealing, money-making behavior by Murdaugh and Laffitte. The bank and the law firm, now called the Parker Law Group, are the two most prominent and powerful institutions in Hampton County, witnesses testified.

“None of this would have happened without Alex Murdaugh, but none of it could have happened without the defendant,” Limehouse told the jury in her 70-minute closing argument, marked by an effortless recall of hundreds of details in the complex case.

Murdaugh, Limehouse said, needed someone like Laffitte, known for his attention to detail, to execute his schemes.

“Russell Laffitte was the banker, the organizer, the one who kept the trains running,” Limehouse told the jury Monday. “Alex Murdaugh was the rainmaker, the one who brought the money in. He violated the trust of the bank and its customers. That’s why he’s standing trial today.”

Defending Laffitte

But it’s not Laffitte who is to blame, Laffitte’s attorney Bart Daniel said in his closing argument: It’s Murdaugh’s.

Daniel called Murdaugh an “enigma,” who was “trusted by everyone, and his clients loved and revered him.”

Murdaugh’s “level of deceit was unimaginable,” Daniel told the jury Monday, saying that even his close partners didn’t recognize him for “somebody other than who we thought he was.”

Matt Austin, also an attorney for Laffitte, told the jury Monday that intent is crucial.

“It all really comes down to what is in Russell’s mind,” he said.

Prosecutor Winston Holliday scoffed at Laffitte’s efforts to blame Murdaugh for his conduct.

Holliday, whose voice sometimes quivered with outrage, reminded the jury that when Murdaugh’s law firm discovered he had stolen $1.3 million from a client and Laffitte helped engineer the theft, Laffitte had in October 2021 written a bank check for $680,000 — half the stolen amount — and agreed to help the law firm reimburse the client.

If Laffitte were truly innocent, Holliday said in his closing remarks, he would have told the law firm the theft was Murdaugh’s fault and refused to help in a cover up. Instead, Laffitte started a cover up that soon unraveled, he said.

Holliday said the bank board flipped out when it discovered the $680,000 payment, showing, he said, “Russell had steered the Titanic into the iceberg.”

“The devil made me do it,” Holliday said, referring to remarks comedian named Flip Wilson would say after doing bad things. “This case is the devil made me do it.”

Why did he do it?

The trial was unusual in that the defense and prosecution agreed that Laffitte had acted in numerous ways to illegally direct bank money, as well as to money in conservatorships, to Murdaugh.

But they disagreed sharply on Laffitte’s intent.

Defense attorneys Daniel and Austin contended, through nine witnesses they put up, that the “charismatic” Murdaugh had repeatedly manipulated and duped Laffitte, who was acting in good faith. Laffitte naturally trusted Murdaugh, a revered and respected figure in Hampton County, defense attorneys told to the jury.

Prosecutors Limehouse and Holliday, meanwhile, contended that Laffitte was Murdaugh’s willing accomplice, who knew what he was doing and made nearly $400,000 from fees he earned from secretive transactions he engineered on Murdaugh’s behalf.

Laffitte’s intent, or lack thereof, is a crucial factor in this case, Gergel told jurors in an hour-long charge Tuesday.

“There is no way to directly scrutinize the workings of the human mind,” Gergel told jurors, so, he said, they must decide on Laffitte’s intent by evaluating the witnesses, their testimony and the exhibits.

Laffitte was accused by federal prosecutors of using his position as CEO of Palmetto State Bank to help his friend Murdaugh meet a mounting set of debts by stealing money from the accounts of Murdaugh’s clients, including young children injured in car accidents whose money Laffitte was meant to safeguard.

Murdaugh, formerly a high-powered Lowcountry attorney from a long line of local prosecutors, has been at the center of a national, even international, media storm after his wife and son were found murdered on the grounds of the family’s Colleton County estate, called Moselle, in June 2021.

He’s now being held in Richland County’s Alvin S. Glenn Detention Center, facing separate charges of financial crimes as well as murder in the deaths of his wife, Maggie, and son, Paul.

Though Murdaugh’s name was mentioned repeatedly at Laffitte’s trial, the former attorney himself never appeared despite early rumblings that he might be called to testify. He indicated, through his attorney at one point, that he would be willing to testify in return for immunity from prosecution for anything he divulged on the stand.

Equally as eyebrow raising, Laffitte took the witness stand himself, unusual in that criminal defendants rarely testify in their own defense.

In a closing argument, Daniel told jurors that “wild horses” couldn’t keep Laffitte from testifying.

Laffitte testifies, admits he didn’t pay taxes

Laffitte offered explanations for his actions in moving hundreds of thousands of dollars from clients’ accounts for Murdaugh’s and his own use.

He claimed these were either legitimate loans issued on behalf of the bank, or that he was misled about the nature of the transaction by Murdaugh.

But during a cross-examination by Limehouse, Laffitte admitted that he didn’t pay federal income taxes on some $400,000 he had earned in fees from managing money received in large settlements for former Murdaugh clients the lawyer had sent his way.

Limehouse forced Laffitte to admit he only reported his income from the fees and paid income taxes in 2021, after the FBI, the State Law Enforcement Division and his bank began asking questions.

Laffitte also admitted on the stand that he had, over the years, allowed Murdaugh to take unsecured low interest loans totaling some $1 million from those former client accounts. Laffitte was overseeing those accounts as either a conservator or personal representative.

Family business

The trial also revealed a split in the Laffitte family, which runs Palmetto State Bank.

A majority of family members on the board of directors voted to fire Laffitte last January, with only two — his father, Charlie Laffitte Jr. and sister, Gray Laffitte Henderson — voting to retain him as CEO.

Laffitte was fired as bank CEO after board members raised questions about a $680,000 payment to Murdaugh’s law firm that Laffitte made to cover losses in the account of one of the clients, car crash survivor Arthur Badger.

The prosecution’s 15 witnesses included multiple members of the Palmetto State Bank board who also were blood relations or extended members of the Laffitte family. Those board members testified that they never gave Laffitte approval to make the payments to Murdaugh.

Laffitte’s father and sister, both board members, testified in his defense.

Both said they had been aware of the $750,000 loan to Murdaugh in July 2021 and gave it their approval, since they — along with Laffitte — constituted a majority of the board’s executive committee.

Roughly $350,000 of the $750,000 went to pay off a Murdaugh debt and $400,000 went to cover Murdaugh’s checking account overdrafts.

Laffitte’s father and sister also testified they were unaware of the extent of Laffitte’s financial relationship with Murdaugh.

Trial’s meaning for Murdaugh

Revelations at the trial also shed light on the June 2021 murders of Murdaugh’s wife and youngest son at the 1,700-acre family Colleton County estate.

Murdaugh is charged with their deaths, and is expected to go on trial Jan. 23 through Feb. 10.

The morning of June 7, 2021, Murdaugh was confronted at his law firm by firm CFO Jeanne Seckinger, who asked about hundreds of thousands of dollars in missing fees that he and another attorney were supposed to have forwarded to the law firm, Seckinger testified Nov. 9.

The implication of Seckinger’s testimony was that on the day his son and wife were killed, Murdaugh was under financial pressure that threatened to expose his years of stealing millions of dollars from clients and associates, said lawyers state Rep. Justin Bamberg and Eric Bland, who were in the courtroom viewing the case as observers.

Murdaugh was already facing immense pressure from lawsuits, a fatal boat crash where his son, Paul, was the driver and from the bank, said Bland, who with law partner Ronnie Richter helped expose Murdaugh’s secret financial dealings later in fall 2021.

“It’s another pancake of pressure on Alex,” Bland said.

Bamberg, who represents Laffitte victim Badger, said questions about missing fees “probably put Alex in a panic because he was going to great lengths to hide what was going on financially.”

This is a developing story. Check back for updates.

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