On day five of Russell Laffitte’s bank fraud trial, the defense had its first chance to shape the narrative of the former Palmetto State Bank CEO’s conduct with disgraced attorney Alex Murdaugh.
Laffitte’s legal team rushed to defend the former banker on Wednesday, after federal prosecutors closed their case late Tuesday. The government presented 15 witnesses who said Laffitte withdrew money from client accounts he managed on behalf of Murdaugh’s law firm without the knowledge of the clients, law firm or counsel. administration of Palmetto State Bank, all to cover payments by himself and Murdaugh.
Three bank employees testified Wednesday morning that the small-town bank’s normal operations, with the defense team led by Bart Daniel trying to paint the disputed loans Laffitte made to Murdaugh were normal procedure for the bank.
The government had argued that a loan given to Murdaugh for “agricultural” purposes had in fact been spent to cover Murdaugh’s debts. But Charleston Laffitte, a bank executive who is also Laffitte’s brother, testified that the bank did not consistently keep track of how its loans were used.
“Once they have the line of credit, we don’t monitor what they spend their money on,” said Charles Laffitte.
He also testified that it was not unusual for council leaders who made up a majority of the council to approve certain actions without a formal council meeting. This was a contentious point in the lawsuit, as several board members, including other members of the Laffitte family, said they only knew about the payments made by Laffitte after the fact.
“Depending on how quickly they try to get a deal done, they may not wait for the monthly meeting,” he said.
Chastity Malphrus, a loan processor at Palmetto State’s Hampton office, testified that it’s not unusual for the bank to approve a one-time payment unsecured loan, like the ones Laffitte made to Murdaugh.
“It’s not unusual for banks in general,” said Malphrus, who worked directly under Laffitte until he was fired earlier this year. Loans are assessed on a case-by-case basis and determined based on the likelihood that a customer will be able to repay it. “They’ll say, ‘I’m getting a work bonus’ or ‘I’m selling property,’ and we’re trying to document that and they’re able to pay it back at that point.”
But in cross-examination, Malphrus said Murdaugh’s loans would have required a higher level of approval because he already had a low credit score, overdrawn accounts and had not repaid his loans before.
“I should send them to someone else,” she said, and when asked who would approve such a loan, she replied, “So it was Russell.”
John Peters, Palmetto State’s compliance officer, testified that he was aware of Murdaugh’s loans and did not report them as suspicious at the time because he knew Murdaugh was a longtime client. who “at some point” would pay his debts to the bank. .
But shortly before Murdaugh’s life was turned upside down, Peters recalled making the comment to bank president Charlie Laffitte, “You know Alex is going up to six figures”, which Charlie Laffitte said. indicated that he was aware.
Murdaugh was fired from his family’s law firm last year amid allegations of stealing money from clients, three months after his wife and son were shot dead at the family’s county estate. Colleton, known as Moselle. Murdaugh is now in prison and faces separate financial charges, as well as murder charges in the deaths of his wife, Maggie, and son, Paul.
Peters also testified that he subsequently filed suspicious activity reports with banking regulators on certain checks issued on the accounts of some of Murdaugh’s clients, noting that they appeared to be “structured” into separate payments below $10,000, the amount that would require a federal report. terms.
This is a developing story. Check back for updates.