Murdaugh accomplice and ex-banker Russell Laffitte sentenced to seven years

Apparently swayed by evidence of ex-banker Russell Laffitte’s many good deeds for those he knew well, a federal judge gave Laffitte seven years in prison for stealing millions from vulnerable people whom he hardly knew.

Judge Richard Gergel also said the seven-year sentence was in line with the average white collar crime sentence, but it was notably less than prosecutors sought.

Citing federal sentencing guidelines, prosecutors said they wanted nine years for Laffitte, 52, who used his position as Palmetto State Bank CEO in Hampton County to help former lawyer Alex Murdaugh steal millions that had been placed in the care of Laffitte’s bank.

During an all-day hearing in a packed courtroom Tuesday, Gergel dwelt on Laffitte’s thefts over eight years, calling them “systematic” and “methodical” and “abusive.” He called Laffitte’s offenses among “the state’s most notorious financial crimes,” noting that they targeted “broken” people, among them a deaf man who was placed on a ventilator following a car crash and two sisters, 12 and 8, who had just lost their mother in a car wreck.

Laffitte had served as a conservator, or steward, of their funds, which were won by Murdaugh in settlements for their injuries.

Weighing his sentence, Gergel mulled the problem of the two Laffittes in his courtroom.

Nine of Laffitte’s family and friends, including his 84-year-old mother and 20-year-old daughter, offered emotional testimony about Laffitte’s good character. The banker was a hard worker who manned the concession stand at school sports games and served as a pillar of the community and loyal advocate for the economically depressed Hampton County, according to the witnesses.

After Laffitte’s daughter, who fought tears, told the judge about what a great father her dad was and how she had wanted to follow in his footsteps and become a banker, Laffitte stood and hugged her as she made her way back to her seat.

“I have heard commendable (reports) from very fine people. He is a family man, a good parent and a good spouse,” Gergel told the courtroom. More than half the audience, by a show of hands, said they were friends and relatives of Laffitte.

But, said Gergel, citing testimony Tuesday from four Laffitte’s victims, “He was also incredibly cruel to some of the most vulnerable people I have ever encountered.”

Laffitte also took the floor and apologized, at times turning from facing the judge and looking back at four of his victims in the audience, apologizing to each one of them by name and using phrases such as “I am truly sorry” and “I apologize.”

“I should have taken more time to get to know you all,” Laffitte told the victims and their families. “My own failures and my own acts brought me here.”

Addressing his family and the wider Hampton County community, Laffitte said, “I am deeply sorry that I let you down...It was my honor to be the fourth generation Laffitte to get to run the bank... If I could do it over again, obviously we would do things differently.”

Much of the fraud Laffitte was convicted of worked this way: Murdaugh, a personal injury lawyer, would win huge insurance settlements for vulnerable people — minors, physically handicapped, severely injured and the grieving — give them an initial payment and then steer most of the remaining money to Laffitte’s bank. There, Laffitte would divert the money into various accounts that he and Murdaugh would tap for low-interest loans and personal expenses.

“I was just another dollar sign to him,” said Alaina Plyler Spohn, who won a settlement after her brother and mother died in a car crash caused by a tire defect. The case was litigated by Alex Murdaugh.

“He took my trust and betrayed me,” said Natasha Thomas, who was injured in a 2009 car crash. Laffitte stole $325,000 that Murdaugh had won in a settlement for Thomas and used it to repay loans taken from the conservator account of Alaina’s sister, Hannah Plyler, according to evidence presented at the November trial.

A conservator’s highest duty, Gergel noted, is to protect the funds of those whose assets he is overseeing.

Laffitte also served as an enabler to Murdaugh, steering stolen bank funds and loans to the then-lawyer even though Laffitte knew Murdaugh was an irresponsible spender heavily in debt who constantly overdrew his checking accounts, evidence showed.

Gergel, who said he wrestled with how much time to give Laffitte, also ordered Laffitte to pay $3.55 million restitution to two corporate victims in the case — the old Murdaugh law firm and Palmetto State Bank. Those organizations have already paid claims by the individual victims from whom Laffitte and Murdaugh stole.

There is no doubt that Laffitte deserves prison, Gergel said. “If we don’t have accountability, we don’t have the rule of law.”

Both Laffitte and Murdaugh’s financial crimes have drawn particular ire from the judicial system given their privileged roles in their respective fields. While Laffitte was not accused of masterminding the crimes, it would have been impossible for Murdaugh to commit the thefts without him, said assistant U.S. Attorney Emily Limehouse, who prosecuted Laffitte.

“He (Laffitte) was the guardian of the gate. There are always going to be Alex Murdaughs out there, wolves in suits, but he (Laffitte) had the ability to say no,” said attorney Eric Bland who represented the Plyler sisters. Also representing a victim was state Rep. Justin Bamberg, D-Bamberg.

Gergel noted that a court-ordered investigation of Lafitte’s financial situation showed he had some $10.5 million in assets and about $5 million in liabilities. Exactly how that money will be liquidated, and over what period of time, still has to be settled.

A date has not been set for Laffitte to report to prison. Gergel denied a motion by Laffitte attorney Mark Moore to allow his client to stay free while the case is appealed to the 4th Circuit Court of Appeals. Had Gergel granted that motion and the appeal was rejected, it may have been more than a year before Laffitte reported to prison.

“I do not find there is likelihood the court will be reversed,” a confident Gergel told Moore near the hearing’s end. Also at Tuesday’s hearing was Belinda Gergel, the judge’s wife and a former Columbia city council member.

Laffitte was convicted last November by a Charleston federal jury of six counts of bank and wire fraud after a trial that spanned three weeks. Murdaugh’s name was mentioned numerous times during that trial as a co-conspirator; he has been charged in both state and federal courts with carrying out bank crimes with Laffitte. No trial date for those charges has been set.

Murdaugh was convicted earlier this year of murdering his wife, Maggie, and son Paul in June 2021.

Although Laffitte lawyer Michael Parente argued that Laffitte’s crimes were a case of fairly simple fraud, Limehouse told the judge that numerous factors showed that what he did was complex and carried out over an extended period.

Laffite’s thefts involved manipulating funds between accounts, giving Murdaugh and himself loans from the conservatorships he oversaw, extending Murdaugh large lines of credit and dividing up large sums of money so they would avoid reporting requirements to the federal government, Limehouse said.

“The only person who knew how these funds were handled was Russell Laffitte,” said Limehouse, who with assistant U.S. Attorney Winston Holliday sat at the prosecution table.

Moreover, Limehouse noted, Laffitte collected some $400,000 in fees for supposedly managing the conservatorships he was stealing from and did not pay income taxes on that money.

Gergel agreed.

“This is an extraordinarily complex criminal scheme,” he said. “This is as sophisticated a crime as I have seen in my 13 years on the bench.”

Limehouse also got Gergel to agree that Laffitte had abused a position of trust, and “his role in that position of trust was absolutely essential in the commission of these crimes.”

Limehouse also said that, without Laffitte’s knowledge of banking practices, the crimes of manipulating so much money in so many ways could not have been carried out. “The defendant was the only person who knew where this money was coming from and where it was going,”

Evidence showed that Murdaugh brought the money to Laffitte by means of checks cut by his law firm, and once the money was at the bank, Laffitte took over.

“Murdaugh was the leader but the evidence is overwhelming that Mr. Laffitte was an integral part of this operation,” Gergel said.

Tuesday’s hearing closes a chapter in the sprawling crime sage involving Murdaugh, his accomplices including Laffitte, and numerous victims, including Murdaugh’s wife and son.

Murdaugh must still resolve fraud charges in state court that accuse him of stealing millions from former clients, friends, law partners and his law firm. Another Murdaugh accomplice, former lawyer Cory Fleming, has pleaded guilty in federal court to charges he helped Murdaugh steal some $4 million that belonged to heirs of Murdaugh’s late housekeeper, Glorida Satterfield.

Both Laffitte and Fleming are old Murdaugh friends. Laffitte and Murdaugh have known each other since childhood. Fleming, who lived and worked in Beaufort, had become a Murdaugh close friend at the University of South Carolina law school.