Alex Murdaugh federal probe ramps up with new fraud charge for South Carolina bank scion Russell Laffitte

The federal investigation into once powerful and now disbarred attorney Alex Murdaugh’s alleged financial schemes is ramping up with a new fraud charge for South Carolina bank scion Russell Laffitte. 

According to a new superseding indictment made public Wednesday, a federal grand jury charged Laffitte, the former CEO of Palmetto State Bank, with an additional count of fraud for allegedly extending a $500,000 line of credit in 2015 to a "bank customer." Though federal prosecutors haven't named the bank customer, victims’ lawyers identified him as Murdaugh. 

Laffitte’s relatives reportedly founded the bank in Hampton, S.C., nearly a century ago around the same time Murdaugh’s great-grandfather founded a prominent personal injury law firm in the same small town area of South Carolina’s Low Country. Murdaugh’s father, grandfather and great-grandfather also controlled the area’s elected prosecutors for 87 consecutive years. 

So far, federal prosecutors say Laffitte served as the personal financial representative or conservator for six of Murdaugh’s personal injury clients, including two sisters, Alania Spohn and Hannah Plyler, who as children were injured and lost their mother and brother in a tragic rollover car accident in 2005. 

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Laffitte "issued a cashier’s check from the $500,000 line of credit totaling $284,787.52, equal to the outstanding balance owed to H.P. by the Bank Customer," the superseding indictment says of the new fraud charge. "The Bank Customer then used those funds to pay off the remainder of the loan balance." 

The State newspaper reported that Laffitte is scheduled to make a court appearance in Charleston before Magistrate Judge Mary Gordon Baker next week regarding the new fraud charge. 

With the new addition made public Wednesday, Laffitte is now facing six federal counts — conspiracy to commit wire fraud and bank fraud, bank fraud, wire fraud and three counts of misapplication of bank funds. 

Marking the first federal prosecutorial step in Murdaugh’s long spiraling fall from grace, Laffitte was indicted by a federal grand jury on five counts on July 20. That was the same day Murdaugh pleaded not guilty to state murder charges that came in response to the June 2021 double homicides of his wife, Maggie Murdaugh, and their 22-year-old son, Paul Murdaugh, after a 13-month investigation. 

On the same day news came of the sixth count tacked onto Laffitte’s federal indictment, Murdaugh’s attorney, Dick Harpootlian, hosted a press conference Wednesday accusing state prosecutors of failing to provide evidence to defense tying Murdaugh to the mysterious murders before the 30-day deadline.

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South Carolina Attorney General Alan Wilson’s office denied delaying discovery and said they were waiting on the judge to decide on unsealing search warrants and whether to issue a protective order for some of the more sensitive evidence amid the high pre-trial publicity.  

"Contrary to what Mr. Harpootlian said at his news conference, it is categorically false that the Attorney General’s Office leaked any information in the Murdaugh murder case," Wilson said. "We’ve been in communication with SLED, and they deny that they told anyone that our office leaked anything. As we said in our Response in Opposition to the Motion to Compel, this is, ‘…a not unexpected but completely blatant attempt to create drama where formerly there was none’." 

The federal indictment alleges that Laffitte conspired with the bank customer for a decade to use his position at Palmetto State Bank for money laundering. 

Laffitte is accused of issuing personal loans of hundreds of thousands of dollars to himself and Murdaugh from the six conservator accounts, and when deadlines approached on one, he allegedly often drew from another to cover the balance. He and Murdaugh allegedly used the misappropriated funds for personal expenses for themselves and family members, as well as to cover the overdrafts on checking accounts sometimes in the tens of thousands of dollars. 

Laffitte was fired from Palmetto State Bank in January following an internal audit around the same time allegations came to light that he allegedly helped Murdaugh steal from other personal injury clients – a deaf athlete named Hakeem L. Pinckney, who was rendered a quadriplegic and later died — as well as his family members following a rollover car accident. Laffitte was indicted for the first time in April alongside Murdaugh by a state grand jury on conspiracy charges connected to that scheme.  

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At the time of the bombshell murder charges, Murdaugh already was facing 81 state financial and related criminal charges alleging he misappropriated $8.1 million from friends, former legal clients and his family’s longtime law firm that previously bore his name. Murdaugh was fired from the firm last September around the same time he allegedly cooked up a botched suicide for hire plot so that his surviving son, Buster Murdaugh, could collect on a $10 million life insurance policy.