Experts, investigators, possible victims continue testimony in trial of ex-Lowcountry banker

Prosecutors were expected to wrap up their case Tuesday against former Palmetto State Bank CEO Russell Laffitte.
Published: Nov. 15, 2022 at 3:02 PM EST|Updated: Nov. 15, 2022 at 10:48 PM EST
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CHARLESTON, S.C. (WCSC) - Prosecutors were expected to wrap up their case Tuesday against former Palmetto State Bank CEO Russell Laffitte, who is accused of helping former lawyer Alex Murdaugh misdirect nearly $2 million from victims.

A federal grand jury indicted Laffitte back in July on charges of conspiracy to commit wire fraud and bank fraud, bank fraud, wire fraud and misapplication of bank funds.

Federal Bank Examiner Tim Rich testified Tuesday morning about the PSB policies and practices. Rich said documents show Laffitte was approving loans without proper collateral or consulting the bank’s board, which would be expected. Rich told the court documents show Murdaugh was also not using many loans for the reasons he provided when he applied for them.

The prosecution presented a $500,000 loan to Murdaugh that listed Laffitte as the loan officer in February of 2015 for “farming equipment.” However, documents showed an advance of about $250,000 that appears to replenish funds into another account, not in accordance with the loan statement.

Prosecutor Emily Limehouse also referred to a $750,000 loan to Murdaugh for “beach house renovations.” Rich says documents show $350,000 of that money were paid to the Wilson Law Group and the rest went into a checking account for Murdaugh.

“The loan, the funds went out the door before the loan was actually approved by the people who are responsible for ultimately approving it,” Rich said on the stand. “That’s not the way that loans are funded. So that would be an objectionable practice on the part of the loan officer.”

Natasha Thomas and Arthur Badger, both of whom claimed to be victims in the case, said people in the area referred them to Alex Murdaugh as a personal injury lawyer and they didn’t know Russell or why he was moving their money.

Laffite handled Thomas’ settlement money after her case since she was a minor at the time. But Thomas says she did not meet with him about the money or know he was in charge of her money. Documents show payments coming out of her settlement money and going to Murdaugh Charters, Maggie Murdaugh, Charles Laffitte, Hannah Plyler, Randolph Murdaugh III, and Malik Williams. Thomas firmly said “no” every time the prosecution asked her if she knew the people or why they were getting money.

Badger testified that he did not know why Laffitte was authorizing the movement of his settlement money since Laffitte was not in charge of the account. Documents show that Badger did legally sign away control of his late wife’s estate. In his testimony, Badger says Murdaugh would often put paperwork in front of him to sign without much explanation. Badger says he trusted his attorney and signed a lot of things to “speed up the process.” After the transfer, documents show more than $1 million from Badger’s settlement went to Randolph Murdaugh. Maggie Murdaugh, Hannah Plyler, motor companies, getting cash back, and Alex Murdaugh’s personal accounts at PSB and Bank of America.

“I looked up to him because he helped me out,” Badger said of Murdaugh. “Well, it seemed like he was helping me out.”

FBI Special Agent Brian Womble testified that Laffitte made unsecured loans to himself along with Murdaugh from client accounts as many as 20 times with renewals. Womble says the loan money continued to move around accounts without any of the victims or bank members knowing about it.

Womble testified to loans from client Hannah Plyler’s account.

“It revealed that the first loan two months earlier actually went to Russell Laffitte,” he said. “It also revealed that the loans that Alex Murdaugh got coincide with the overdrafts in his account that Russell Laffitte was monitoring.”

At times, Womble needed to take a moment on the stand to properly retrace where money originally came from compared to where it ended up.

Testimony continued into the evening. When the prosecution wraps its case, the defense will begin calling their witnesses and presenting their case.

Tuesday evening the government rested its case against Laffitte. Wednesday the defense will begin its case by calling its first witness.