Russell Laffitte, who had headed a highly respected bank in South Carolina, has received a sentence of 7 years in federal prison for assisting former attorney Alex Murdaugh, now a convicted murderer, in stealing almost $2 million from his clients’ legal settlements.
According to the Associated Press, as reported by NBC News, Laffitte was sentenced Tuesday, August 1, 2023, when a federal jury in Charleston, South Carolina, found him guilty of 6 charges pertaining to bank fraud and wire fraud.
The former CEO of Palmetto State Bank became the first of Murdaugh’s accomplices in a widespread fraud investigation to face prison time.
Murdaugh is already in prison, having been convicted earlier this year in the June 2021 shooting deaths of his wife Margaret, 52, and younger son Paul, 22. The double murder has been followed by extensive investigations into the Murdaugh family’s finances.
Murdaugh is now in the protective custody unit of a South Carolina maximum-security prison, where he is serving a term of life in prison.
Though Murdaugh claims he was innocent in the killings of his wife and son, he has admitted to vast financial crimes, many of them through Palmetto State Bank, according to BBC News, which says he still faces hundreds of financial charges.
And still, more cases involving the Murdaugh family are ongoing. One involves a Murdaugh associate and distant cousin who has been released on bond for his alleged role in a fumbled assisted suicide scheme.
Murdaugh said he set up a “hit” on himself so that his surviving son could collect life insurance payments. His distant cousin allegedly attempted to shoot Murdaugh months after his wife and son were murdered.
Restitution also ordered for Murdaugh accomplice
As for Laffitte, along with his 7-year prison sentence, U.S. District Judge Richard Gergel ordered him to pay over $3 million in restitution. Reportedly, Murdaugh will cover part of that amount.
Like Murdaugh, Laffitte came from a prominent family—a family that had built an upstanding reputation for Palmetto State Bank. In fact, Laffitte was honored as “banker of the year” in 2019 by the Independent Banks of South Carolina.
His downfall came from his actions as the court-appointed safeguard for settlement money that Murdaugh had won for some of his most vulnerable clients. Prosecutors said Laffitte used his position to take tens of thousands of dollars and collect as much as $450,000 in non-taxable fees.
Laffitte also reportedly sent large amounts of such funds to Murdaugh, who needed the money to repay mounting loans while an opioid addiction depleted his accounts.
In court, Laffitte apologized to each victim present in the federal courtroom. He also apologized to the judge for his errors in judgment and to Palmetto State Bank customers for having failed them.
Even so, he still claims his innocence of crimes and says that he will appeal this week’s decision. Laffitte claims he was manipulated and didn’t realize he was committing crimes.
Prosecutors refuted that.
“The Government does not dispute that Murdaugh is the more culpable actor in the criminal conspiracy, or that Murdaugh benefited more from the scheme,” the prosecution wrote. “But the Defendant was the only person who could have stopped him. Instead, the Defendant enabled him. Repeatedly.”
Prosecutors had sought a 9-year sentence for white-collar crime
Those same prosecutors in the white-collar criminal case had asked that the judge sentence Laffitte to at least 9 years in federal prison. They had argued that a lengthy prison term could help to atone for the damaged public trust in banking that had occurred as a result of the notorious case.
As for Laffitte’s defense counsel, his lawyers had sought a reduced sentence of 3 to 5 years in prison, while noting that friends, relatives and business acquaintances had praised his character in letters submitted to the court. In arguing against a stiff penalty, his defense attorneys also noted that Laffitte had no previous criminal record and had been ruined professionally already.
Nonetheless, Laffitte received a 7-year prison sentence and was ordered to pay restitution to victims of the fraud scheme.
White-collar crimes can be state or federal
White-collar crimes can be state crimes as well as federal crimes.
In Texas, the theft of $200,000 or more is considered a first-degree felony and can lead to a fine of as much as $10,000 and a prison sentence of 5 to 99 years.
Texas law holds that the theft of $100,000 to $200,000 is a second-degree felony, which can lead to a fine of up to $10,000 and a prison sentence of 2 to 10 years.
The theft of $20,000 to $100,000 is a third-degree felony under Texas law. Upon conviction, that white-collar crime can result in a sentence of 2 to 10 years in state prison and a fine of up to $10,000.
Get the best Texas white-collar criminal defense lawyer
If you or a member of your family faces a claim, accusation or charge of a white-collar crime, whether that crime is state or federal, you must get the best white-collar criminal defense lawyer or attorney you can find to protect your legal rights.
Persons living in Houston, Conroe, The Woodlands, Katy, Sugar Land or elsewhere in Fort Bend County, Montgomery County or Harris County, Texas, can contact the award-winning Neal Davis Law Firm for a consultation.
The Neal Davis Law Firm has been consistently honored and awarded not just for its work on criminal defense cases in general, but also for its work on white-collar criminal defense cases in particular.
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Learn about a Houston white-collar crime case involving a hospital CEO who was sentenced to 21 months in prison and ordered to pay $11 million in restitution.