Russell Laffitte, Murdaugh’s friend and ex-Hampton banker, indicted by federal grand jury
A federal grand jury has indicted former Hampton banker Russell Laffitte on various counts of bank and wire fraud in connection with alleged schemes by disbarred attorney Alex Murdaugh to misappropriate millions of dollars supposedly under bank supervision.
The indictment, issued Wednesday by a federal grand jury in Charleston, alleges a longstanding conspiracy between an unidentified customer, whom sources identified as Murdaugh, and Laffitte to use the bank as a tool for laundering money that Murdaugh stole.
The indictment is the first, but likely not the last, charge by the federal government in what has turned into one of South Carolina’s largest financial scandals in years in which the banking industry and the legal profession have come under scrutiny by law enforcement.
Banks and bankers are governed by a vast set of federal laws to protect the nation’s financial system, and a federal grand jury has been quietly investigating Laffitte and the inner workings of Palmetto State Bank for months, The State reported earlier this year.
Since last November, a state grand jury has indicted Murdaugh on numerous fraud charges connected with the alleged theft of roughly $8.5 million from his clients, law firm, associates and fellow lawyers. Some of the state indictments charge that Murdaugh stole money from his law firm’s client trust account and then, with Laffitte’s help, laundered the money for Murdaugh’s personal use.
Laffitte also profited from his relationship with Murdaugh, according to state indictments.
Laffitte, 51, the former CEO of Palmetto State Bank, was recently indicted by a state grand jury in connection with numerous counts of fraud connected to Murdaugh’s alleged thefts and misuse of money supposedly kept secure by the bank.
Murdaugh is not mentioned by name in the federal indictment, but he is unidentified “co-conspirator” who appears throughout.
Laffitte and Murdaugh are childhood friends, having grown up in the same Hampton neighborhood and having lived close to each other. Both are members of wealthy, prominent families whose names are closely intertwined with major local businesses.
In Murdaugh’s case, he is a fourth-generation lawyer in a family-based law firm that is regarded as one of the best personal injury firms in the state. Laffitte’s family has run the Palmetto State Bank for decades. The law firm and the Palmetto State Bank’s affairs have been intertwined for years, with the law firm keeping its financial accounts there.
Murdaugh was fired by his family law firm — what was Peters Murdaugh Parker Eltzroth & Detrick — last September. The firm has since jettisoned the family name and is now known as the Parker Law Group.
Laffitte was fired last winter by his bank, on whose board of directors sit several members of the Laffitte family, after an in-house investigation disclosed numerous irregularities in his relationship with Murdaugh. At that time, Laffitte was also under investigation by state and federal authorities.
The State newspaper reported earlier this month that Murdaugh was under enormous financial pressure in the years, months and days leading up to the murders of his wife Maggie and son Paul. Laffitte used the bank to help Murdaugh in numerous ways, from giving him hefty loans from cash-laden conservatorships that Laffitte controlled to helping Murdaugh cope with his frequently overdrawn checking accounts, according to lawsuits and April indictments.