Ex-SC banker Russell Laffitte wants new trial, says judge improperly dismissed jurors

Citing a “miscarriage of justice,” former South Carolina banker Russell Laffitte, who was found guilty last month on six counts of federal financial fraud charges, has filed a motion to overturn the jury verdict and is asking for a new trial.

Laffitte’s lawyers, Bart Daniel and Matt Austin, said in their motion filed late Tuesday that federal Judge Richard Gergel improperly dismissed two jurors, including one who was purportedly standing up for Laffitte.

“Following nearly ten hours of deliberations, two jurors were improperly dismissed and replaced with alternates, only to have a newly constituted jury return a guilty verdict 40 minutes later,” the motion says. “One of those jurors requested removal based on her dissenting status, and the error in her removal constitutes a miscarriage of justice.

“The Court should grant Mr. Laffitte a new trial because it is in the interests of justice,” the motion says.

The U.S. Constitution guarantees the right of a defendant to “an impartial jury,” and the jury’s late-night substitution of two jurors violated that right, the motion said. The jury had 12 members. Any guilty verdict had to be unanimous.

Laffitte’s trial played out over three weeks in Charleston during the month of November. He was found guilty of bank and wire fraud, conspiracy and misapplication of bank funds.

It was the first trial related to Alex Murdaugh, the disgraced attorney jailed on financial-related charges and in the deaths of his wife and son. Murdaugh was an unindicted co-conspirator, whose name was mentioned throughout the trial.

The trial exposed the inner workings of Murdaugh’s former law firm — Peters, Murdaugh, Parker, Eltzroth & Detrick — and Palmetto State Bank, the bank at which Laffitte was CEO before he was fired last January.

Federal prosecutors had no comment Wednesday on the motion. They have two weeks to file a formal response and intend to do so, a spokesperson for the South Carolina U.S. Attorney’s office said.

It will be up to Gergel to reject or approve Laffitte’s motion. If Gergel rejects the motion, the issue can still be appealed to the 4th Circuit Court of Appeals.

Laffitte trial highlighted Murdaugh’s role

At the trial, attorneys put up 24 witnesses — 15 by the government and nine for the defense — who included members of both businesses.

Both were described as major institutions in Hampton County in South Carolina’s Lowcountry.

Testimony showed that Laffitte over 11 years repeatedly moved money at the bank around at Murdaugh’s behest and used to give the lawyer low-interest loans. The money manipulated by Laffitte — some $2 million — came from Murdaugh’s former clients who had their settlement proceeds from lawsuits in a client trust account at Murdaugh’s law firm.

In what government prosecutors described as an unlawful scheme, Murdaugh directed the money go to Laffitte’s bank, where the banker then set up conservatorships, then made that money available through loans for Murdaugh’s use.

Laffitte also improperly used $680,000 of the bank’s money to cover up a theft by Murdaugh of settlement proceeds of one of his former clients, according to evidence at the trial.

At the trial, Laffitte, 51, spent more than five hours on the witness stand in his own defense, portraying himself as a simple country banker who was overly trusting in dealing with Murdaugh, a then-respected lawyer who he thought was beyond reproach but who turned out to be an unscrupulous conman, he said.

Although Laffitte’s 35-page motion mentioned several grounds on which Gergel might overturn Laffitte’s guilty verdicts, the major issue was the removal of one juror who appeared to have been standing up for Laffitte, the motion said.

Jurors can’t be dismissed simply because they disagree with the majority, Laffitte’s motion said.

Juror dismissals center of Laffitte motion

The jury had deliberated nearly 10 hours when around 7:45 pm on the Tuesday before Thanksgiving, Gergel received the first of what became four notes from jurors.

One juror wrote two notes saying she needed to take an antibiotic by 9:15 p.m. and was feeling pressure to change her vote. Another note was from a large group of jurors who wrote that deliberations had become contentious and that one juror was becoming hostile to other jurors’ opinions, according to Laffitte’s motion.

It is unknown whether the writer of the fourth note was the same as the writer of either the first or second jurors, none of whom were identified by name, Laffitte’s motion said.

Gergel spoke with jurors who wrote the notes individually, and took a court reporter to record the conversations for the record.

“Laffitte consented to the Court ‘creating a record to question the juror.’ Mr. Laffitte’s expectation, therefore, was that the court would look into the issues of hostility and anxiety, make a record, and report back,” Laffitte’s motion said.

When the judge returned to the courtroom, he reported that he had dismissed two jurors. That caught Laffitte’s lawyers by surprise, since they did not believe they had authorized Gergel to immediately remove both jurors from the panel without giving notice lawyers in the case, Laffitte’s motion said.

And although Gergel said he would create a record of his conversations with jurors, Laffitte’s motion said he only did so with one juror, and that record showed that the juror was suffering anxiety due to “some reactions” to her points of view.

The record Gergel created when talking to that juror, identified as Juror 88, shows he asked her if she was able to perform her duties as a juror.

“At this point, no,” Juror 88 replied.

Gergel then said, “Okay. I’m going to honor your request to replace you then.”

Instead of dismissing that juror, Gergel could have explored various measures including whether to have that juror and the jury come back the next day and try again to reach a verdict, Laffitte’s motion said.

“Doing so without trying to preserve the original jury was legal error that ... violated his right to a unanimous jury,” the motion said.

Eric Bland, a Columbia lawyer who attended Laffitte’s trial nearly every day, predicted Laffitte’s motion won’t hold up.

“Judge Gergel tried a clean trial and was fair to both sides,” said Bland, who represents two former Murdaugh clients whose money was overseen by Laffitte at his bank.

Before Gergel went to talk with the jurors, Bland said, he secured the consent of both prosecution and defense lawyers.

Gergel also made a good move by keeping three alternate jurors on standby so, in an emergency situation after hours of deliberation, he had no problem in making substitutions, Bland said.

“These kinds of motions for a new trial are summarily denied. I would be shocked beyond belief if Judge Gergel reversed the jury verdict and granted a new trial,” Bland said.