Ex-SC banker Russell Laffitte says bank docs may exonerate him on some fraud charges: motion

Former banker and alleged Alex Murdaugh accomplice Russell Laffitte is fighting to get access to an internal report commissioned by his former employer that he says will clear him of some his impending federal charges, according to a court filing.

As Laffitte’s trial date draws closer, the ex-banker is fighting to get access to the findings of an investigation conducted by former federal prosecutor, Greg Harris.

In particular, Laffitte has said that the findings of the report, prepared for the Palmetto State Bank, will “directly contradict” the prosecution’s assertion that Laffitte secretly issued a $680,000 check to Murdaugh’s former law firm, which has renamed itself the Parker Law Group in an attempt to distance itself from the disgraced attorney whose family founded the firm.

The bank has asserted that the report is protected by attorney-client privilege.

U.S. District Judge Richard Gergel, who is presiding over the trial, has scheduled a pre-trial conference hearing for Monday, one day before Laffitte’s trial is set to begin Nov. 8.

It’s not the first tussle over records from Laffitte’s former employer. The former CEO of the Palmetto State Bank has also been attempting to get access to emails and an audio recording of a Nov. 3, 2021, executive session of the bank’s board with their counsel.

In a motion filed Oct. 31 in U.S. District Court where Laffitte will be tried, his attorneys expressed urgency in their client’s efforts to obtain the report.

“The Harris Report likely contains information about how the Bank’s Board of Directors authorized the $680,000.00 check and contradicts the Government’s charge ... that Mr. Laffitte issued the check without any involvement from the Bank’s Board,” Laffitte’s attorney’s wrote in the motion, which was filed in opposition to the Palmetto State Bank’s move to quash the subpoena.

The $680,000 payment is believed to be connected to the case of Donna Hay Badger, whose family was allegedly swindled out of millions of dollars by Murdaugh after her death in a car accident.

“Right now, we have no comment,” said Josh Myers, one of Laffitte’s attorneys.

The bank retained Harris, a former South Carolina federal prosecutor, in November 2021.

Harris, who declined to comment for the article, was brought in to “investigate and advise (the bank) as to certain matters involving Alex Murdaugh ... that were, and likely would be, the basis of pending and future litigation.”

Palmetto State Bank’s attorneys did not respond to a request for comment.

In opposing Laffitte’s subpoena requiring the bank to hand over the information, the bank wrote that they had entered into a clear attorney-client relationship with Harris. As a result, his report was protected from disclosure.

But Laffitte’s lawyers — Trenholm Walker, Thomas Gressette and James Clement — disagreed with this characterization. In a response filed Oct. 31, they argued that Harris’ investigation was not only intended for use by third parties, but the bank had already waived its privilege by providing confidential records to the government.

Laffitte’s attorneys pointed to a statement by Jan Malinkowski, Palmetto State Bank president, published in the Greenville News in January 2022, announcing an investigation as proof that Harris’ work was intended for public awareness.

“The dual-purpose of the Harris Reports causes it to fall outside the attorney-client privilege,” Laffitte’s lawyers said in their motion.

They also pointed to an email chain marked “CONFIDENTIAL-ATTORNEY CLIENT PRIVILEGE INFORMATION” that was provided to the government. Handing this over effectively waived the bank’s right to withhold the documents, Laffitte’s lawyers argue.

While the bank stated that sharing these emails did “not constitute a waiver of ... attorney-client privilege,” Laffitte’s attorneys have argued that the 4th Circuit Court of Appeals does not allow those kinds of limited exceptions.

This public back-and-forth comes after Gergel placed a seal over records of a previous attempt by Laffitte’s attorney to obtain a recording from the bank.

The recording is believed to be of a conversation between the Palmetto State Bank board of directors and their attorneys.

In an Oct. 25 order sealing the records, Gergel stated that he weighed the protections of attorney-client communications and the defendant’s right to fair trial against the “the public right of access” to the documents.

“The Court at this time seals these communications with the Court and the related documents,” Gergel wrote in his order.

Laffitte’s trial is set to begin Nov. 8 in Charleston federal court.

It will be the first criminal trial in the twisting Murdaugh saga. The one-time banker is facing up to 30 years in prison for his alleged role in Murdaugh’s scheme to defraud his own clients of millions of dollars from settlements.

A once prominent Lowcountry lawyer, Murdaugh remains jailed in the double slayings of his wife and son. He is expected to go on trial for their murders Jan. 23.

Both sons of prominent Lowcountry families, Laffitte, 51, and Murdaugh, 54, have known each other since childhood and grew up on the same street. Laffitte’s family bought Palmetto State Bank in 1955, and Laffitte started work for them in 1997, rising from teller to CEO.

Besides Myers, attorneys Bart Daniel and Matt Austin are representing Laffitte in his criminal trial. Assistant U.S. attorneys Emily Limehouse and Winston Holiday are prosecuting the case.