Adverts
The trial of Russell Laffitte, former top executive at Palmetto State Bank, continues this week in Charleston District Court. He is accused of helping Alex Murdaugh defraud his former clients, while using money from his family's bank to support the disbarred lawyer's precarious finances.
The trial began on November 8 and is expected to go into deliberations later today or early next week.
The Post and Courier will provide live coverage of the trial throughout the day. More information about the Murdaugh saga, including coverage of the previous trial, can be found here.
4:08 pm Update:
Austin asked Laffitte about the $500,000 line of credit he extended to Murdaugh in 2013 for agricultural purposes. Laffitte testified that he understood Murdaugh would use the money as needed.
The former lawyer received the first advance and paid off Plyler's conservatorship loans. He used the rest to cover his overdrawn accounts and pay other expenses, Laffitte said.
The banker had no concerns that Murdaugh was not using the loan for its stated purpose, he said. The loan was well secured and Murdaugh ended up paying it off in 95 days, Laffitte said.
Austin again asked Laffitte if he had knowingly defrauded the bank. Laffitte said that would amount to defrauding himself, as he owns shares in the bank.
Laffitte also testified that Murdaugh had not made any payments on the $ 750,000 loan because the money was due in January 2022. At that time, Murdaugh had already been in prison for several months.
Gergel dismissed the jurors after Austin finished his interrogation. Limehouse will begin questioning the defendant when court resumes on November 21.
3:56 pm Update:
Laffitte next spoke about the $750,000 loan he extended to Murdaugh in the summer of 2021. The banker said he was never concerned that the money wasn't going to its stated purpose: beach house renovations.
The initial payment of $350,000 was transferred in July to Bamberg lawyer Chris Wilson, which Laffitte testified he knew about. Murdaugh's wife and son had just been murdered, Laffitte said. He didn't question where the money was going, or why.
Laffitte also answered questions about the $680,000 payment he authorized from the bank to pay Murdaugh's former law firm. Laffitte acknowledged that he mistakenly negotiated checks for the money Murdaugh allegedly stole from Arthur Badger's settlement.
When law firm employees alerted Laffitte, the banker said he wanted to correct the error quickly. “Time is of the essence,” he thought.
Laffitte went to the law office and presented the check before notifying his executive committee via email. His father and sister, both members of the executive committee, already knew.
No one asked him to issue a “stall payment,” he said. Laffitte notified the rest of the board members the next day. Many of them were upset about the check, “like the rest of us,” Laffitte testified.
3:11 pm Update:
Austin asked Laffitte about her role in the guardianship of Natarsha Thomas, who was over 18 when her lawsuit was dismissed. Thomas previously testified that she had no idea she had been named conservator.
Laffitte said he wished he had verified her age before signing the forms agreeing to be her guardian. Murdaugh reportedly filled out the forms and presented them to the banker to sign. Laffitte was counting on Murdaugh, he said.
Murdaugh would then go to the bank with checks made out to the bank and tell Laffitte where they needed to go. In reality, Laffite said, he didn't know what he was getting — stolen money.
Laffitte also spoke about his role as Hakeem Pinckney's conservator. The banker helped set up a structured deal, he said, charging a fee of $60,000.
“It was probably too expensive now, looking back,” Laffitte said.
2:33 pm Update:
Austin is asking Laffitte about the 2013 email between him and Murdaugh, in which the former lawyer asks the banker to rewrite a check for Arthur Badger's $ 1.325 million settlement.
In the email, cited several times during the trial, Murdaugh asks Laffitte to send hundreds of thousands of dollars to people including his former business partner, his father and his wife, as well as Plyler's conservatorship to pay off previous loans.
Laffitte testified that he rediscovered the email in fall 2021 when the law firm asked him to research checks he negotiated for Murdaugh. Laffitte felt “sick, furious” when he saw it, he said.
“I realized what it looked like and I realized how involved it was,” the banker said, adding that Murdaugh “set me up right then and there.”
Looking at the checks, there were “unusual irregularities” that bank officials didn’t notice at the time. The checks – from the law firm and addressed to the Palmetto State – contained a memo describing the intended use of the money. Laffitte testified that he would not have looked at the memo line because it is to the person writing the check. And Murdaugh “would have come with a story,” he said.
Murdaugh was an authorized signatory of his former law firm. Laffitte had no reason to question the checks Murdaugh was writing on behalf of the company, he said.
2:07 pm Update:
The jurors are seated again after the lunch break. Austin is asking Laffitte about her involvement in Donna and Arthur Badger's case.
1:01 pm Update:
Austin continued asking Laffitte about the Plyler sisters. The banker cited previous statements by Alania Plyler Spohn that “shocked” him. Spohn told jurors that she sometimes lived out of her car during the time she was under conservatorship. Laffitte said he wishes Spohn had told him because he would have fixed it.
“The girls did a great job raising themselves,” Laffitte said.
Austin asked Laffitte if he stole money from Plyler. The banker emphasized that he did not “intentionally” steal from anyone.
“I absolutely did it unintentionally,” Laffitte said.
Gergel dismissed the jurors for a lunch break.
12:33 Update:
Laffitte readily acknowledged that he “made some mistakes” regarding how he negotiated Murdaugh’s checks. Laffitte testified that he thought he would be held civilly liable for the former lawyer's alleged crimes.
He then began answering questions about his role as a fiduciary — whether as trustee or public relations — for several of Murdaugh's legal clients. That role was separate from his work at the bank, Laffitte testified. He did it to help his friend and client, he said.
Laffitte did not deny making the transactions that prosecutors presented as evidence. The banker said he didn't know he was helping to facilitate the robbery.
Laffitte saw the loans he provided from Hannah Plyler's guardianship as an investment in the young woman. He borrowed money from the settlement fund – both for himself and for Murdaugh – and paid it back at a high interest rate.
12:11 Update:
Laffitte spoke at length about the Murdaugh family and his relationship with Alex. The Murdaughs “were the law” in Hampton County. They helped judges and sheriffs get elected. Families grew up across the street. The former lawyer's father is Laffitte's godfather and vice versa, he testified.
Laffitte didn't see any red flags regarding Murdaugh, he said, adding that he's still shocked.
“The signs were right in front of me. Not just me – it was right in front of everyone, and we lost,” Laffitte told the jury. “I wish I hadn’t done that. I swear so.”
Murdaugh brought checks to the bank in a flurry of chaos: “I need you to do this, I need you to do that,” Laffitte said. The gregarious former lawyer “would always have a story.” Looking back, it was her way of disarming him, Laffitte said.
Murdaugh was heavily in debt to the bank and was “terrible” at managing his checking account, but Laffitte considered him a low-risk client because of his high-paying job. The pair has a lot of history, “which gives you a lot of comfort,” Laffitte said. In retrospect, this exposed him to a lot of risk, the banker testified.
Laffitte said his bank “definitely” helped Murdaugh cover his checking account on several occasions. However, the examiners and auditors who came to the bank never raised any real concerns with the customer.
Laffitte “absolutely did not know” that Murdaugh was stealing money from anyone until employees at the law firm approached the banker and asked him to research a series of checks that Murdaugh had deposited, he said.
Laffitte also began meeting with law enforcement officials and state and federal prosecutors, handing over documents whenever requested, he said. Laffitte did not bring a lawyer to these meetings because he felt he did not need one.
“There was nothing to hide,” said the banker.
11:46am Update:
Laffitte is in the booth. Austin is asking how he got started in banking. Laffitte said he had no intention of being a banker – he preferred to be outside, hunting and fishing. But when his father invited him to join the family business, Laffitte testified that he fell in love with banking. He enjoys helping people, seeing them buy their first car or pay for their children's college education.
Austin asked Laffitte about his wife and two children. The man spoke about the moment in January when he was fired from the bank and his subsequent indictment. Something of this “magnitude” changes your priorities, Laffitte said, getting choked up. It made the self-described workaholic wish he had spent less time at the bank and more time with his kids, he said.
Laffitte wasn't happy about sitting in court, he said, but he was glad he got those priorities right.
11:06am Update:
During his questioning, federal prosecutor Winston Holliday asked Provence about loans from guardianship accounts. He asked the lawyer if she would take out loans to add a pool to her home or update her kitchen countertops — allegations made against Laffitte.
“That would be self-dealing, right?” Holliday asked.
Provence said it would be “unprofessional” as a lawyer to grant herself conservatorship loans in this manner. She also testified that a conservator is responsible for conducting a risk assessment on a loan before withdrawing it. Unsecured loans are riskier than secured ones, Provence said.
Holliday presented another hypothesis: If a lawyer asked a conservator to steal conservatorship money, is the conservator obligated to help? “No,” said Provença.
The witness also said he visited Murdaugh's former law office after many discrepancies were discovered in how his probate forms were being completed. Provence spoke with company officials to get “more uniformity” in the forms, she said.
Austin asked Provence a few final questions. The witness testified that he was not aware of any theft of the Plyers' guardianship funds.
Gergel called for a brief pause after Provence's testimony. Laffitte is expected to testify as his defense team's final witness.
10:55am Update:
Austin went on to ask Provence about specific cases she was involved in as an attorney – Donna Badger's estate and the conservatorship of Hannah and Alania Plyler.
Austin showed Provence forms from the Plylers' case. Laffitte signed in several places she shouldn't have, she testified. But unfortunately, lawyers make mistakes when filling out the forms, she said. Provence thought the forms were filled out incorrectly before they were presented to Laffitte and he signed them.
10:34am Update:
Austin focused on asking Provence about guardianships. Their fundamental role should be to protect the client's assets and “keep them for the people who are entitled to receive them,” she said. Depending on the age of the client, there may be an expectation that the conservator will accrue interest or invest the funds, she said.
South Carolina law allows a conservator to invest and borrow money from the fund he or she is managing. Provence said the practice is “not uncommon” but depends on the conservator. The trustee is also not required to obtain court approval before making a loan, she said.
If the conservative is borrowing money for personal use, this could be seen as a conflict of interest. The conservator may be required to file a notice to be investigated by the probate court, Provence testified. Borrowing money without paying interest is “inappropriate,” she said.
10:19am Update:
Defense attorney Matt Austin is questioning the next witness. Tiffany Provence is a former Dorchester County probate court judge. She is now a lawyer in the areas of inheritance law. The woman served as a court-appointed fiduciary for several clients. Gergel recognized her as an expert witness in inheritance law.
Provence showed jurors the differences between a trustee and a personal representative (PR). Laffitte served in both roles for several of Murdaugh's legal clients.
Conservators administer the estate of someone who is living, while a PR acts over the estate of someone who has died. Both fiduciary functions are paid by the court. The Conservative’s rates are “all in,” Provence said. A conservator could set her own fees by telling the judge, “I will serve as conservator if you set my fees like this,” she said. But the probate judge is still responsible for deciding whether the request is reasonable. A PR receives a percentage of the equity they are managing.
It is not uncommon for an outside fiduciary to have never met their client. Provence said she has personally handled several cases where her client was arrested or she was managing the estate of someone whose family members lived in another country. It’s not always necessary to have a “one-on-one, personal relationship,” she said.
9:51am Update:
Federal prosecutor Emily Limehouse focused her cross-examination on asking Drawdy about the $500,000 line of credit the bank extended to Murdaugh. Drawdy testified that he collected the loan in December 2021.
9:39am Update:
Drawdy testified that his relationship with Laffitte is “honest.” She described the banker as a hard-working and dedicated man. Laffitte is a “dot your I’s and cross your T’s” kind of guy,” Drawdy said.
The longtime employee described Palmetto State as a community bank run by the Laffitte family. They are “neighbors helping neighbors,” she testified.
Drawdy said he has worked with state and federal examiners and the bank's internal auditors over the years. They never found anything wrong with Murdaugh's accounts, she testified.
The bank would waive late fees for Murdaugh, she said, but the bank waives post-maturity late fees for 99% of its customers.
9:26am Update:
The jurors are seated and defense attorney Bart Daniel has called the first witness of the day. Nancy Drawdy has worked in the loan department at Palmetto State Bank for more than 30 years.
8:30am Update:
The jury in Russell Laffitte's trial will meet this morning to hear from the defense's final witnesses in the case. Laffitte is expected to testify himself as a witness to defend himself against allegations that he misused Palmetto State Bank money.
U.S. District Court Judge Richard Gergel said Nov. 16 that closing arguments would likely begin Nov. 21, meaning a decision could be made before Thanksgiving. Jurors will be tasked with deciding whether Laffitte is guilty of six counts: one each of bank fraud, wire fraud and conspiracy, as well as three counts of misapplication of bank funds.
