More indictments filed Ex-Hampton banker Laffitte accused of misusing funds while representing at least 6 clients with Murdaugh's firm

Ex-Hampton banker Russell Lucius Laffitte has been struck with a second round of federal indictments this week, while he and his family-founded Palmetto State Bank are now named in a personal injury civil suit.

The federal charges and the related suit in South Carolina court are exposing more details in the alleged financial conspiracies involving Laffitte and accused former S.C. attorney Richard "Alex" Murdaugh, who stands accused in a decade-long, multi-county crime spree worth more than $8.5 million.

Both state and federal documents paint a picture of two powerful men in a small S.C. Lowcountry town who took advantage of their inherited positions of power to allegedly manipulate and then defraud injured people who trusted them and came to them for help.

Palmetto State Bank founder Russell Laffitte named in indictment

While Murdaugh remains jailed in Richland County on more than 90 state criminal charges, his alleged accomplice Laffitte is out on bond but finds himself facing federal charges and S.C. State Grand Jury charges.

On Aug. 17, a federal grand jury for the U.S. District Court, District of South Carolina, levied a second round of indictments on Laffitte. The new superseding indictments charge the longtime Hampton banker with bank fraud, wire fraud, conspiracy to commit bank fraud and wire fraud, and three counts of misapplication of bank funds.

The indictments allege that Laffitte, while acting as a bank officer trusted with fiduciary duties, committed fraud and misused funds while acting as a personal representative and conservator for at least six personal injury clients of a Hampton law firm, identified in state indictments as Peters, Murdaugh, Parker, Elzroth and Detrick, which was founded by Murdaugh's family more than a century ago.

Laffitte allegedly misused hundreds of thousands of dollars from these accounts without seeking client, bank, or probate court approval, and much of this money allegedly went to Murdaugh.

Attorneys and spokespersons for PBS and Laffitte did not return emails seeking comment Thursday morning.

On July 20, Laffitte was indicted by a federal grand jury on the original charges stemming from the same alleged crimes. During a July 27 arraignment in U.S. District Court in Charleston, Laffitte pleaded not guilty to the first federal indictments.

Laffitte was granted a $500,000 bond, which had to be secured by $25,000 cash, as well as house arrest and GPS ankle monitoring on the original indictments.

On Tuesday, Aug. 23, Laffitte's attorneys filed a motion for a bond reduction with the U.S. District Court in Charleston, claiming that their client's bond is excessive and unfair and is due in part to an "unprecedented media firestorm" because of his connection to Murdaugh. U.S. Magistrate Judge Mary Gordon Baker held a hearing on that motion Wednesday but made no decision.

On May 4, Laffitte was indicted by the S.C. State Grand Jury for criminal conspiracy, two counts of breach of trust with fraudulent intent, value more than $10,000; and computer crime, value more than $10,000. He was granted a $1 million bond, house arrest and monitoring on those charges and has been on house arrest since early May.

If convicted on the federal charges, Laffitte faces a maximum term of imprisonment of 30 years on each charge, as well as the forfeiture of any property or assets connected to his crimes, in addition to sentences from any convictions in the state grand jury charges.

Laffitte's federal case could come up for trial as early as November.

The case was investigated by the Federal Bureau of Investigation, the South Carolina Law Enforcement Division and South Carolina Attorney General's Office. Assistant U.S. Attorneys Emily Limehouse and Winston Holiday Jr. are prosecuting this case.

Laffitte, who was named CEO of PSB in 2020, was terminated from his position at PSB in January of 2022. His family founded the bank in Hampton more than a hundred years ago and it now has branches in several SC Lowcountry counties.

What's happening with personal injury lawsuit?

A personal injury suit was filed Wednesday, Aug. 24, in Hampton County Court of Common pleas by attorneys for Hannah Plyler and Alania Spohn.

The suit, which is related to both the state and federal charges against Laffitte, names PSB and its former CEO and alleges that the banker, while operating as a court-appointed conservator and a bank officer, stole or loaned himself hundreds of thousands of dollars from Plyler and Spohn's settlement trust accounts over the course of their childhood. Meanwhile, the girls had to ask and sometimes beg for money for small expenses, such as shopping for school clothes or going on school trips, the suit alleges.

The suit alleges that not only did Laffitte and PSB breach their fiduciary duty, Laffitte was making money through conservator fees while also making low-interest loans and writing checks from the trust account to himself and to Murdaugh, then taking money from other accounts he was entrusted with to repay that money.

Attorneys and spokespersons for PBS and Laffitte did not return emails Thursday morning seeking comment on this suit.

The civil suit was filed by Eric Bland and Ronald Richter Jr. of Bland Richter LLP, the same firm that successfully earned a $4.3 million confession of judgement from Murdaugh in the Gloria Satterfield case. Bland Richter also represents other, as-yet-to-be-named alleged Murdaugh victims.

In a public statement released the day of the filing, Bland and Richter said their clients are "seeking answers to important questions that strike at the heart of what it means to be a conservator and a fiduciary in the Palmetto State."

"In short, the lawsuit seeks a full accounting of every dollar of theirs that was entrusted to Laffitte and to his bank PSB, as well as a full and complete understanding of every manner in which Laffitte and Palmetto State benefited at their expense," Bland Richter states. "As alleged in the suit, having lost their mother and brother in a tragic accident, they were further victimized by learning much later that they were little more than slush funds for Russell Laffitte and his good friend, Alex Murdaugh, for many years after the tragedy up until they turned 18 years of age, when the exploitation ended by virtue of them no longer in need of a conservator to manage their money.

"As bank customers, PSB likewise owed duties to the girls to oversee Laffite's conduct, but instead aided and abetted him in violating his fiduciary duties as monies were moved directly out of conservatorship accounts established for the girls and into accounts controlled by Laffitte and Murdaugh through obvious acts of self-dealing. Rather than serve as the guardians at the gate, PSB afforded Laffitte unfettered access to the monies that were intended to be protected for the benefit of the girls."

"The girls are finished with being victimized and abused by those that were entrusted to protect them," the statement concludes.

The 33-page lawsuit seeks actual and punitive damages.