A day after convicted fraudster Russell Laffitte was sentenced to seven years in federal prison for his role in facilitating the financial schemes of convicted killer Alex Murdaugh, federal investigators and prosecutors weighed in on the sentence – which also included $3.56 million in restitution payments.
Laffitte, 53, of Estill, S.C., had been facing up to thirty years behind bars on the six charges he was convicted of last November. He is currently appealing those convictions. The former chief executive officer of Palmetto State Bank (PSB), Laffitte profited from helping Murdaugh rip off multiple clients – and then helped Murdaugh cover his tracks with loans that never should have been issued and payouts that never should have been made.
Millions of dollars were involved in these scams … which unfolded over a span of nearly a decade.
“Russell Laffitte used his position of power and trust to steal from unusually vulnerable victims,” U.S. attorney Adair Ford Boroughs said in a statement. “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.”
The top Federal Bureau of Investigation (FBI) agent in the Palmetto State concurred, adding the sentence imposed against Laffitte would send a “clear message.”
“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 Columbia FBI 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.”
The federal statement recapitulated Laffitte’s crimes in detail, noting how he 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,” the statement added. “Laffitte also knew that Murdaugh used funds stolen from other personal injury clients to pay back the loans.”
Laffitte further misapplied PSB funds by extending over $284,000 from a line of credit which was “supposed to be used for farming to repay Murdaugh’s remaining loans from the conservatorship.”
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While serving as conservator or personal representative for Murdaugh’s personal injury clients, Laffitte “received disbursement checks from Murdaugh’s law firm, then negotiated and distributed the funds according to and at Murdaugh’s direction.” Laffitte then transferred the disbursed settlement funds “into bank money orders, cash, and other wire transfers for Murdaugh’s benefit.”
For facilitating these fleecings, he collected nearly $400,000 in fees.
The feds also noted how Laffitte “willfully misapplied” $750,000 in funds from PSB 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.”
Laffitte also paid Murdaugh’s former law firm $680,000 in bank funds “without notice or consent” to cover up the fact he had “negotiated checks Murdaugh stole from a client.”
U.S. district court judge Richard Gergel handed down Laffitte’s sentence on Tuesday following a day-long hearing that delved into all aspects of his crimes.
“Murdaugh was the leader … but I think Mr. Laffitte was an integral part of the operation,” Gergel said in sentencing Murdaugh.
Following his conviction, lead prosecutor Emily Limehouse spoke with reporters about the sentence.
“Seven years is a significant sentence,” Limehouse said. “It’s a significant sentence in white collar cases like this and we’re pleased with it.”
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Limehouse said Laffitte is “a man of extraordinary privilege,” and that she hoped his conviction and sentencing would “send a message” that her office would “do whatever it takes to bring justice … for any other individuals who are in positions of trust.”
In addition to his federal convictions, Laffitte is facing more than twenty state charges related to the Murdaugh saga. As for Murdaugh himself, he was criminally charged by the feds in late May of this year, sparking an ongoing battle between state and federal prosecutors over the disposition of the financial charges against him, Laffitte and another alleged co-conspirator, Cory Fleming – a former attorney from Beaufort, S.C.
Fleming has reached a plea agreement with federal prosecutors. He is set to stand trial on those charges in September of this year, while Murdaugh is reportedly set to stand trial the following month.
Murdaugh admitted to most of the financial schemes involving Laffitte when he testified in his own defense in February at his double homicide trial in Colleton County, S.C. A jury found Murdaugh guilty of murdering his wife and younger son on March 2, 2023 – and he was sentenced the following day to two consecutive life terms in prison by judge Clifton Newman.
As for Laffitte, he was not immediately remanded into custody – but will be allowed to turn himself into authorities when he is instructed to do so. His seven year sentence will begin as soon as he reports. Worth nothing? Laffitte could earn up to 378 days – or a little more than a year – in reduced sentence for “good behavior credit” during his tenure of incarceration. That would mean he would serve slightly less than six years if he keeps his nose clean.
There is no parole in the federal system.
ABOUT THE AUTHOR …
Will Folks is the founding editor of the news outlet you are currently reading. Prior to founding FITSNews, he served as press secretary to the governor of South Carolina. He lives in the Midlands region of the state with his wife and seven children.
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