Russell Laffitte Sentenced to 7 Years in Federal Prison for Conspiracy, Wire Fraud, Bank Fraud, and Misapplying Bank Funds
For Immediate Release
U.S. Attorney's Office, District of South Carolina
CHARLESTON, SOUTH CAROLINA — Russell Lucius Laffitte, 53, of Estill, was sentenced to 7 years in federal prison after being convicted of conspiracy to commit wire fraud and bank fraud; wire fraud; bank fraud; and three counts of misapplication of bank funds.
“Russell Laffitte used his position of power and trust to steal from unusually vulnerable victims,” said U.S. Attorney Adair F. Boroughs. “His crimes undermine the public’s trust in the judicial and banking systems, and we are grateful to the FBI, South Carolina Attorney General’s Office, and South Carolina Law Enforcement Division for their partnership in ensuring he is held accountable.”
“This sentencing is the culmination of an exhaustive investigation by South Carolina law enforcement, the diligent efforts of the prosecutors, and the unwavering resolve of the victims,” said Steve Jensen, Special Agent in Charge of the FBI Columbia Field Office. “This outcome sends a clear message that the FBI and its partners will continue to pursue justice and protect the rights of innocent victims of complex financial crimes.”
Laffitte was convicted following a nearly three-week jury trial in November 2022. Evidence introduced at trial showed that Laffitte conspired with Hampton personal injury attorney Alex Murdaugh to commit wire fraud and bank fraud. During the conspiracy, Laffitte was an officer of Palmetto State Bank (“PSB”), and Murdaugh was a customer of the bank.
Laffitte—while serving as conservator for Murdaugh’s personal injury clients—extended $355,000 in personal loans to himself and $990,000 in personal loans to Murdaugh from funds held at PSB and belonging to the personal injury clients. Laffitte knew that the funds loaned to Murdaugh were used to cover hundreds of thousands of dollars in overdraft on Murdaugh’s personal account. Laffitte also knew that Murdaugh used funds stolen from other personal injury clients to pay back the loans. Laffitte misapplied PSB funds by extending over $284,000 from a line of credit that was supposed to be used for farming to repay Murdaugh’s remaining loans from the conservatorship.
Laffitte, as conservator or personal representative for Murdaugh’s personal injury clients, received disbursement checks from Murdaugh’s law firm, then negotiated and distributed the funds according to and at Murdaugh’s direction. Laffitte transferred the disbursed settlement funds into bank money orders, cash, and other wire transfers for Murdaugh’s benefit. He collected nearly $400,000 in fees for serving as conservator and personal representative for Murdaugh’s clients.
On two other occasions, Laffitte, as an officer and director of PSB, willfully misapplied bank funds. Specifically, on July 15, 2021, Laffitte willfully misapplied $750,000 of PSB funds by extending a commercial loan to Murdaugh knowing that the loan was essentially unsecured and that the loan proceeds would be and were used to pay an attorney and to cover hundreds of thousands of dollars in Murdaugh’s overdraft. And October 28, 2021, when Murdaugh’s law firm discovered that Laffitte had negotiated checks Murdaugh stole from a client, Laffitte paid the law firm $680,000 of PSB funds without notice to or consent from PSB in an attempt to settle the matter with the firm.
United States District Judge Richard M. Gergel presided over the trial and imposed an 84-month sentence, followed by a five-year term of supervised release. Additionally, Judge Gergel imposed a restitution judgment totaling $3,555,884.80 and ordered Laffitte to forfeit $85,854.73 in illegal proceeds.
The case was investigated by the Federal Bureau of Investigation and South Carolina Law Enforcement Division. Assistant U.S. Attorneys Emily Limehouse, Kathleen Stoughton, and Winston Holliday are prosecuting this case.
Brook Andrews, First Assistant United States Attorney, firstname.lastname@example.org, (803) 929-3000
Updated August 2, 2023