CHARLESTON, S.C. — In her closing argument of former South Carolina banker Russell Laffitte’s federal bank fraud trial Monday, prosecutor Emily Limehouse said, “Absolute power corrupts absolutely.”
It was absolute power, the prosecutor said, that allowed Laffitte and disgraced former attorney Alex Murdaugh, a friend and high-profile client of Laffitte’s, “the opportunity to exploit the vulnerable.”
Despite the defense’s argument that Murdaugh was the one who devised a scheme to steal money from his own clients, and Laffitte was misled into helping him, Limehouse made the case that a “chaotic” Murdaugh needed someone as “meticulous” as Laffitte to carry out the plan.
“The conspiracy started when the defendant served as conservator for Alania and Hannah Plyler and extended loans to himself from Hannah’s account,” Limehouse said, referring to the then-two young girls who were injured and lost their mother and brother in a car accident.
Laffitte eventually extended himself $355,000 at increasingly favorable rates before he started making similar loans to Murdaugh to cover Murdaugh’s own debts.
“By the end, he just transferred himself money out of the Plyler account and called it a loan,” Limehouse said.
“Maybe this wouldn’t have happened without Alex Murdaugh, but none of it could have happened without the defendant,” she said.
For some three years, Laffitte transferred money from Plyler’s account to cover overdrafts made by Murdaugh. And the payments back into Plyler’s accounts were moved from other client accounts connected to Murdaugh’s law firm.
“Why did he do all of this for Alex Murdaugh?” Limehouse said. “Because he made hundreds of thousands of dollars to do it, $450K, and he didn’t even pay taxes on that income.”
When Laffitte had “no child’s account to loan money from,” Limehouse said, he went on to make what she called “sham loans” of $284,000 for “farming” and $750,000 for a beach house renovation, both of which ended up being used for other purposes by Murdaugh.
In doing so, Laffitte “exposed the bank to substantial risk,” Limehouse said.
When Murdaugh’s life began to unravel in 2021, Laffitte “knew everything they had done would be uncovered, and he did whatever you could to cover it up,” including making a $680,000 payment to one client’s account that “the defendant’s own father (the bank’s chairman) said he did not have the underlying facts” about.
The defense was scheduled to give its closing argument later Monday.
Attorneys made their cases to the jury Monday after nearly two weeks of argument in Laffitte’s federal bank fraud trial in Charleston.
Federal prosecutors presented 15 witnesses to press their case that Laffitte knowingly helped Murdaugh move hundreds of thousands of dollars out of the accounts of clients of his law firm to pay off Murdaugh’s own debts.
Four people who won settlements through Murdaugh’s law firm testified that their money had been misappropriated by Laffitte over a lengthy period of time. Several members of the Palmetto State Bank board of directors testified that they were unaware of the transactions until one man’s account came up short and the bank and law firm had to collectively put up money to replace the missing money.
The defense made the case that Laffitte was unknowingly misled by Murdaugh, who is now charged separately for a variety of financial crimes as well as the murders of his wife and son. The defense has argued that any actions Laffitte took were actions he was allowed to take as a conservator of the clients’ accounts and, until he was fired by the board last January, the CEO of Palmetto State Bank.
Laffitte spent more than five hours on the witness stand Friday and Monday in a highly unusual move, as defendants rarely testify at their own trial. Laffitte attempted to give a sense that he gave deference to Murdaugh, a longtime friend and respected attorney, without knowing Murdaugh’s requested actions were nefarious.
But the prosecution hammered on Laffitte’s responsibility to his customers and those whose accounts Laffitte oversaw and argued that all transactions made out of the accounts happened under his authority.
———
