Russell Lucius Laffitte, a former banker from Estill, South Carolina, has been sentenced to five years in federal prison after pleading guilty to conspiracy to commit wire fraud and bank fraud, as well as several related charges. The sentencing comes after an investigation into fraudulent activities involving client funds at Palmetto State Bank in Hampton, where Laffitte served as an officer and executive.
According to the U.S. Attorney for the District of South Carolina, Bryan Stirling, both Laffitte and his co-conspirator Alex Murdaugh have now been sentenced to federal prison. “As of today, Russell Laffitte and Alex Murdaugh have both been sentenced to federal prison, and their victims have been made financially whole,” said Stirling. “The victims put their trust in Laffitte and Murdaugh after suffering serious injuries and losing loved ones, and they were exploited for financial gain. We appreciate the dedicated work of our partners at the FBI, SLED, and South Carolina Attorney General’s Office in ensuring justice for them.”
Laffitte admitted that he served as conservator and personal representative for several clients of Murdaugh—then a personal injury attorney—while knowingly profiting from these roles. Beginning in 2011, Laffitte extended loans from accounts he managed as conservator to himself and Murdaugh without informing those whose money he was responsible for safeguarding.
Murdaugh orchestrated a scheme directing law firm employees to make client checks payable to Palmetto State Bank. These checks represented client settlement funds but were instead used by Murdaugh for personal benefit with assistance from Laffitte.
In multiple instances detailed by prosecutors, Laffitte negotiated transactions using client settlement funds at Murdaugh’s direction. This included disbursing over $1.3 million in one case alone for purposes such as repaying personal loans or making purchases unrelated to clients’ interests.
Laffitte also received substantial fees for his services but failed to report this income on his tax returns by routing payments through the bank rather than receiving them personally. He structured transactions specifically to avoid reporting requirements set by financial regulations.
In 2015 and again in 2021, Laffitte misapplied bank funds through unauthorized loans or transfers intended either for covering overdrafts or settling stolen client check matters with Murdaugh’s law firm—often without proper authorization from bank leadership.
Prior to sentencing, Laffitte paid more than $3.5 million in criminal restitution and will also forfeit additional funds totaling over $85,000. His plea agreement prohibits him from participating in any federally insured banking activity without explicit permission going forward.
United States District Judge Richard M. Gergel handed down a sentence of 60 months imprisonment followed by three years of supervised release. Additional penalties include a $20,000 fine and a special assessment fee.
The investigation was conducted by the FBI Columbia Field Office alongside the South Carolina Law Enforcement Division (SLED), with prosecution led by Assistant U.S. Attorneys Emily Limehouse, Kathleen Stoughton, and Winston Holliday.
