Judge Sets $1 Million Bond for Former CEO Russell Laffitte, Accused of Fraud in Murdaugh Saga

By Tribune News Service
Tribune News Service
Tribune News Service
May 9, 2022 Updated: May 9, 2022

By Sammy Fretwell and Jake Shore
From The State (Columbia, S.C.)

COLUMBIA, S.C.—A judge set a $1 million bond Friday for fired Hampton County banker Russell Laffitte, who is accused of scheming with suspended attorneys Alex Murdaugh and Cory Fleming to defraud legal clients of settlement money.

Circuit Judge Alison Renee Lee set the bond at a virtual hearing in Richland County, requiring that Laffitte remain on house arrest in Hampton and not leave the state.

S.C. Attorney General’s Office prosecutor Creighton Waters urged Lee to set a bond high enough to make sure Laffitte, who owns shares in Palmetto State Bank, did not flee South Carolina. An attorney for victims of the alleged crimes, Justin Bamberg, also urged a high bond be set.

Waters said Laffitte was vital to Murdaugh’s scheme to take money.

“There was a long association between Mr. Russell Laffitte and Alex Murdaugh, there was a long association between their families, very prominent families in Hampton County,’’ Waters said, noting Murdaugh’s alleged financial crimes went on for years.

Alex Murdaugh
Alex Murdaugh is seen in a mugshot taken on Sept. 16, 2021. (Hampton County Detention Center)

In addition to money Murdaugh earned legitimately, Murdaugh had to “beg, borrow and allegedly steal to stay afloat.

“An important cog in that hamster wheel, constantly spinning, was his friend at Palmetto State Bank, that being Russell Laffitte.’’

Laffitte’s lawyers urged a low bond, saying there was little chance he would flee South Carolina because he is a native of the state, has never lived anywhere else and had cooperated with authorities. Laffitte maintains he is innocent and his lawyers said he has tried to restore money for victims of Murdaugh’s alleged crimes.

“To say he hasn’t cooperated … is simply not true,’’ said Bart Daniel, a Laffitte lawyer and former U.S. attorney for South Carolina.

Laffitte, dressed in a lime green shirt that resembled a prison jumpsuit, did not say much during the hearing, other than answering the judge’s questions about his background in Hampton County. He turned himself in Friday at the Kershaw County Jail.

Laffitte, 51, grew up in Hampton County, attended Newberry College, and returned home to work in Palmetto State Bank, a financial institution with long-standing ties to his family. His lawyers said he was a member of the local Rotary Club, a one-time vice chair of an area disabilities board, a member of the Hampton County economic development board and a treasurer in a local Episcopal church.

Laffitte, a one-time chief executive at Palmetto State bank, worked there 24 years before he was fired. His wife, sister and college-aged children attended the virtual bond hearing Friday as a show of support.

Despite Laffitte’s termination from the bank, Bamberg said Laffitte has more than enough financial resources to justify a high bond. Laffitte owns 9 percent of the shares in Palmetto State Bank, an institution with a value of more than $700 million, Bamberg said.

Murdaugh’s web of alleged financial crimes has continued to expand since it was revealed last September. The crimes have ensnared Laffitte and suspended lawyer Cory Fleming, a longtime friend of Murdaugh’s.

A state grand jury indicted Laffitte on 21 charges Wednesday, alleging he assisted Murdaugh in defrauding his clients out of $1.8 million.

Laffitte was fired by his bank’s board of directors in early January, something the Island Packet, Beaufort Gazette, and The State newspapers learned about after inquiring about copies of subpoenas for records related to Laffitte discovered in Hampton County probate court.

Murdaugh had used Palmetto State Bank to launder money he is accused of stealing from his former law firm’s trust account, then funneling it to his own accounts, according to grand jury indictments.

In one case, Laffitte is accused of working with Murdaugh to misappropriate more than $350,000 held in trust for client Natarsha Thomas. Laffitte is charged with breach of trust with fraudulent intent, conspiracy, and computer crime, the newspapers reported this week. Another indictment accuses Laffitte and Murdaugh of working together to misappropriate $1.1 million from Palmetto State Bank.

Fleming is also charged with breach of trust as attorney for Pamela Pinckney of $8,078 to take himself, Murdaugh and an unnamed attorney on a private plane to the 2021 College World Series in Omaha, Nebraska.

Prosecutor Details How the Scheme Worked

During the bond hearing, state prosecutor Waters provided more details on the alleged illicit relationship between Murdaugh and Laffitte:

Waters said after Laffitte helped Murdaugh secure and convert money from people who were due financial settlements, the money then was often used to pay back low-interest loans Laffitte’s bank had given to Murdaugh.

Waters also said money that Laffitte assisted in converting for Murdaugh was used to pay six-figure sums to one of Laffitte’s family members, a Murdaugh family member and a Murdaugh law partner. He said a five figure sum of money was given for large purchases “to pay back debts for Alex, to give out cash.’’

Alex Murdaugh
Alex Murdaugh in a mugshot taken on Sept. 16, 2021. (Hampton County Detention Center)

The transactions were structured, with five- and six-figure payments used to give the illusion of regular payments that were “used to pay back the loans that Mr. Laffitte had given Alex from his conservatorship.’’

The unfolding case of alleged theft and misuse of money is part of a sensational story involving Alex Murdaugh that has drawn headlines nationally. Murdaugh has been in jail for months, unable to post a $7 million bond for a long list of charges against him.

Murdaugh’s wife and son were shot and killed nearly a year ago on their family’s Lowcountry estate, Moselle. At the time, the son, Paul Murdaugh, was facing criminal charges as a result of a boating accident that killed a 19-year-old female friend who was in the boat.

In a bizarre twist after his wife and son died, Alex Murdaugh allegedly asked a former client to kill him so another son could collect on a $10 million insurance payment. Murdaugh was shot last fall but survived the shooting.

Alex Murdaugh is from a long line of prominent lawyers in Hampton County, a small county along the Georgia border between Aiken and Hilton Head Island. For generations, his family members were prosecutors and successful attorneys in Hampton County.

Murdaugh is now charged in 15 separate indictments containing 79 charges against him in schemes to steal some $8.4 million from various alleged victims.

When Laffitte was indicted, the state grand jury also added more charges against Fleming and Murdaugh.

©2022 The State. Visit at thestate.com. Distributed by Tribune Content Agency, LLC.