Russell Laffitte’s SC attorney tries to make case borrowing money ‘not unusual’

Former South Carolina banker Russell Laffitte is wrapping up his defense in his Charleston trial for federal bank and wire fraud charges.

Laffitte’s trial has been ongoing for two weeks over his role in removing money from clients’ accounts for the benefit of disgraced Lowcountry attorney Alex Murdaugh, who faces charges of both financial crimes and murder in the deaths of his wife and son last year.

Two witnesses have testified so far Friday morning. But many are waiting Friday to see if Laffitte would take the stand in his own defense, a rare move in this kind of trial that would open the former CEO of Hampton-based Palmetto State Bank up to questioning under oath by the prosecutors.

Tiffany Provence, a former probate judge, testified Friday that it is not unusual for a conservator overseeing an account for a child, as Laffitte did for multiple people who received legal settlements won by Murdaugh, to borrow money from that account to make loans and investments for the account’s benefit.

“Borrowing money is not unusual, as long as it goes back to the ward,” she said.

But prosecutor Winston Holliday pointed out that not all instances of borrowing are allowed, including if the conservator is taking money from a client’s account for their own benefit.

“A conservator taking out for own self-interest, you don’t have to be an attorney to know that’s not right?” he asked.

In one particular instance, Laffitte was the conservator for Donna Badger, who was killed in a car crash, but not for her still-living husband Arthur, who received a settlement from that same car crash. The prosecution honed in that in at least one instance, Laffitte took money from Arthur’s own account, which he did not oversee.

Provence said she was unaware of why Laffitte would receive money from Arthur rather than Badger’s estate.

Laffitte also operated a conservator account for another crash victim, Natarsha Thomas, after Thomas had reached adulthood and should have managed her own money.

The prosecutor got Provence to admit that an attorney on a settlement case cannot ask a conservator to “steal” money from a client’s account, the allegation at the heart of the case against Laffitte.

“And the conservator does not have to follow the lawyer’s instructions?” Holliday said. “That person has the right to say ‘no’?”

Provence agreed.

This story may be updated.