Prosecutors seek lengthy prison sentence for Murdaugh accomplice Russell Laffitte

Citing former banker Russell Laffitte’s unwillingness to take responsibility for his crimes, government prosecutors on Thursday filed a memo urging U.S. Judge Richard Gergel to impose a sentence of at least nine years in prison and up to 11 and a half years..

Laffitte, former CEO of Palmetto State Bank in Hampton, is scheduled to be sentenced Tuesday in federal court in Charleston by Gergel.

Last November, a federal jury found that Laffitte schemed with former lawyer and convicted murderer Alex Murdaugh to misapply or mishandle some $3.7 million at Laffitte’s bank in Hampton. The jury convicted Laffitte of bank fraud, wire fraud and the misapplication of bank funds.

In their 35-page memo, prosecutors said, “the Defendant committed serious crimes that undermine the public’s trust in the judicial and banking systems. It is important that the judicial system respond in kind and punish these crimes severely to promote respect for the law, provide just punishment, and afford adequate deterrence to others in positions of power and trust who are given the opportunity to exploit vulnerable victims.”

In recent months, Laffitte’s lawyers have fought unsuccessfully to overturn the jury’s verdict. They portrayed Laffitte as a victim who was manipulated by Murdaugh.

“To this day, the Defendant has failed to take any accountability for his own actions or show any contrition to the victims for the harm his actions caused,” prosecutors said. The prosecutors are assistant U.S. Attorneys Emily Limehouse, Kathleen Stoughton and Winston Holliday.

A sentence of nine years would be a stiff one. White collar criminals such as Laffitte who have no criminal background are generally given less time. However, white collar criminals who get sentences on the light side usually take responsibility for their actions, and Laffitte has not.

Defense lawyers have not yet filed an opposing memo saying what their preferred sentence for Laffitte would be.

Murdaugh, who was convicted in state court of murder in the 2021 shooting deaths of his wife, Maggie, and son Paul, was a constant presence during Laffitte’s trial, though he was not in the courtroom and he was not facing federal charges at the time. Murdaugh had been charged in state courts in the bank fraud and murder cases.

To show the jury that Laffitte and Murdaugh worked together to steal and misuse millions in funds under the bank’s care, prosecutors introduced more than 300 exhibits to the jury in spreadsheets, canceled checks, charts and bank statements.

Murdaugh funneled millions of former client funds to the bank for safekeeping under Laffitte’s stewardship, and then he and Laffitte would divert much of the money for their own purposes, prosecutors contended. The funds came from settlement money Murdaugh had gotten for his former clients through personal injury lawsuits.

At the trial, Laffitte spent more than five hours on the witness stand in his own defense, portraying himself as a simple country banker who trusted folks including Murdaugh, whose family and Hampton law firm had been longtime bank customers.

In Thursday’s filing, prosecutors pointed out that when Murdaugh’s frauds began to be discovered by the bank and the law firm, in the fall of 2021, Laffitte took $680,000 in bank funds — “unilaterally and without the approval or authorization from the (bank) Board — in a desperate attempt to cover up his involvement in Murdaugh’s crimes, hoping that the payment would keep the Law Firm and the Bank from further investigation,” prosecutors said. .

Laffitte and Murdaugh were childhood friends, and they were members of the area’s most prominent and wealthy families. As adults, both assumed key positions in their family’s respective businesses.

In 1997, Laffitte started with his family-owned bank, Palmetto State Bank, as a teller and loan officer. In 2015, he became the bank’s executive vice president and chief operating officer. In 2020, he became the bank’s top executive and helped oversee who got large loans, according to an indictment. He was fired in early 2022 as questions arose about his stewardship of bank funds and his dealings with Murdaugh.

The trial, which played out over three weeks, exposed the cozy inner workings of both Palmetto State Bank, where Laffitte was CEO, and Murdaugh’s former law firm, what was known as Peters, Murdaugh, Parker, Eltzroth & Detrick. As the bank’s top officer, Laffitte was Murdaugh’s primary contact and helped get him large loans and helped with checking account overdrafts, according to evidence at Laffitte’s trial.

Testimony at the trial showed how top officials at the bank and the firm worked at times to cover up self-dealing, money-making behavior by Murdaugh and Laffitte. The bank and the law firm, now called the Parker Law Group, are the two most prominent and powerful institutions in Hampton County, witnesses testified.

“None of this would have happened without Alex Murdaugh, but none of it could have happened without the defendant,” lead prosecutor Limehouse told the jury in a 70-minute closing argument, referring to Laffitte. .

“Russell Laffitte was the banker, the organizer, the one who kept the trains running,” Limehouse told the jury. “Alex Murdaugh was the rainmaker, the one who brought the money in. He (Laffitte) violated the trust of the bank and its customers.”

In late May 2023, federal prosecutors finally charged Murdaugh with numerous fraud counts concerning his dealings with Laffitte at the bank. No trial date has yet been set, but Murdaugh’s lawyers have indicated he will plead guilty.

Tuesday’s hearing, which begns at 10 a.m., is likely to be a long one. Laffitte’s lawyers, who include former federal prosecutor Mark Moore, are expected to argue vigorously against the government’s recommendations for a stiff prison sentence for Laffitte. Prosecutors are also expected to present testimony from some of Laffitte’s and Murdaugh’s victims.

This story was originally published July 27, 2023 at 10:28 AM.