Ex-SC banker, Murdaugh accomplice Russell Laffitte given $500K bond in federal fraud case

A federal magistrate judge on Wednesday set a $500,000 bond for former top Hampton banker Russell Laffitte, who is alleged to have helped disbarred attorney Alex Murdaugh steal millions of dollars using Laffitte’s bank.

Laffitte, 51, who pleaded not guilty in court Wednesday surrounded by family members, has to put up $25,000 in cash, with the rest being a secured bond. If he doesn’t comply with court conditions, he will have to forfeit the entire $500,000, the federal magistrate judge said.

Neither Laffitte nor his attorneys Matt Austin and Bart Daniel spoke to reporters as they left the courthouse Wednesday.

In court before Magistrate Judge Molly Cherry, however, Daniel gave a spirited defense of Laffitte’s rights to a fair trial, criticizing various other unidentified attorneys for making misleading out-of-court statements about his client’s case.

“There have been some statements made by counsel in related cases that quite frankly aren’t true,” Daniel told Cherry, without saying what those statements are. “We are going to fight and ... make sure he (Laffitte) gets a fair trial.”

Laffitte, who was indicted last week by a federal grand jury, is alleged to have carried out numerous financial thefts for years. The 17-page indictment contains details of how Laffitte and Murdaugh used their access to a federally-insured financial institution to steal millions of dollars.

As the former CEO of Palmetto State Bank in Hampton, Laffitte used his position to help Murdaugh gain access to substantial amounts of cash in the “care, custody and control” of the bank, the federal indictment charges.

Laffitte also faces state charges, alleging he was involved in years-long conspiracy to help Murdaugh steal millions of dollars from Murdaugh’s clients, whose money had been placed into conservatorships overseen by Laffitte’s family-owned bank, Palmetto State Bank.

Austin urged the magistrate judge Wednesday to set a low bond, stressing Laffitte is a lifelong resident of South Carolina, who has “only gone as far as Newberry College” and who is an active member of his Hampton County community.

Austin added that Laffitte has been cooperating for months with the FBI, the State Law Enforcement Division and the state grand jury.

“He is not hiding anything,” Austin said, adding, “the only question is whether he is going to get time.”

As part of his bond conditions, Laffitte is required to be under “house arrest” at his large farm, wear an ankle location monitor and surrender his passport. The magistrate judge also instructed Laffitte that he is prohibited from discussing matters in the indictment with family members who are shareholders, employees or officers in his family bank.

Laffitte’s appearance in federal court in Charleston was yet another sign that parallel criminal investigations — one by federal authorities and one by state officials into the state’s legal and banking worlds — are continuing apace into one of the largest financial scandals in South Carolina history.

Assistant U.S. Attorney Emily Limehouse on Wednesday recited the charges against Laffitte that include bank fraud, wire fraud and misapplication of funds. Each of the five charges carries a maximum 30 years in prison and a $1 million fine, she said.

Palmetto State Bank bank, a bank owned and operated primarily by Laffitte’s family, was at the center of Laffitte and Murdaugh’s money-making schemes, the federal indictment asserts.

With the stolen money, Murdaugh and Laffitte sent money to their own relatives and their own personal checking accounts and paid off loans and bills, the indictment said.

The two would replenish money they took out of some conservatorships by taking money out of other conservatorships, the indictment said. The bank was used as a “slush fund” for both men, said lawyers for two of the alleged victims in the case.

Murdaugh faces a slew of financial charges that total nearly $8.5 million, and he faces murder charges in the double slaying of his wife Maggie and youngest son Paul, who were found dead in the family’s Colleton County estate in June 2021.

Murdaugh, who remains in the Richland County jail, has pleaded not guilty to the murder charges.

‘This is not a parking ticket case’

Attorney Eric Bland, who represents Murdaugh and Laffitte’s alleged financial victims, argued Wednesday that Laffitte should receive among the stiffest bonds possible.

The victims are two sisters who, years ago as girls, were victims in an accident that left two family members dead and the then-girls with serious injuries and millions of dollars in a conservatorship overseen by Laffitte.

“Mr. Laffitte should get bond, but this is not a parking ticket case,” Bland told the magistrate judge.

Laffitte and Murdaugh plundered the girls’ conservatorships and when the girls turned 18, paid the money back by taking money out of other conservatorships, Bland said. Meanwhile, Laffitte made at least $300,000 in fees plus 5% interest a year on the balance of the girls’ conservatorships.

“At this time, there is still money that is owned to these girls,” Bland said.

Bland’s firm partner, Ronnie Richter, told the magistrate judge that while Laffitte was stealing from the girls, he became a “father figure” to them because they had to come to him for money to help cover costs including Christmas gifts, allowances and cellphones.

“They had no idea he was using that money to make loans to himself and Alex Murdaugh,” Richter said.

Laffitte not only abused the girls’ trust, but he violated his duties as a court-appointed steward of their money, he said.

Standing near Bland and Richter was Alania Spohn, now 29 and a deputy with the Lexington County Sheriff’s Department, who was one of the girls whose money was misappropriated by Laffitte.

Laffitte was fired by his family-owned bank last January after an internal investigation disclosed irregularities in financial matters under his purview.

It was a stunning finale to an always upwards career. He had started at the bank as a teller and loan officer in 1997 and became executive vice president and loan officer in 2015. In 2020, he became the bank’s chief executive officer and was responsible for approving large loans and sat on the bank’s board of directors.