Laffitte defends loans he approved to Murdaugh as prosecutors grill him in bank fraud lawsuit – InsuranceNewsNet

Russell Laffitte began Monday morning on the witness stand under searing cross-examination by prosecutors in his federal bank fraud trial.

Former small-town banker admitted to prosecutor Emilie Limehouse that he approved a series of measures initiated by a disgraced lawyer Alex Murdaugh withdraw money from Murdaugh’s client accounts to pay off Murdaugh’s personal debts.

Laffitte told Limehouse he knew a large loan he gave to Murdaugh for “agricultural” purposes would in fact be used to repay the loans Murdaugh had taken on behalf of Hannah Plyleran underage girl who was injured in a car accident and received a settlement by the Hampton County law firm of Murdaugh.

“I assumed so,” Laffitte said of the loan.

“You knew, because you did it,” Limehouse said.

Laffitte said he unknowingly created a curator account for the client Natasha Thomas under Murdaugh’s guidance even though Thomas was already an adult and did not need a curator to oversee his account. The document signed by Laffitte misstated Thomas’ age, saying she was only 15. Laffitte said the document was completed by Murdaugh and that Laffitte was dependent on Murdaugh’s advice to open the account.

“I hadn’t checked his driver’s license or ID card,” he said.

In another instance, Laffitte was acting as custodian for an account for another settlement beneficiary, Hakeem Pinckneyafter Pinckney’s death.

Laffitte repeatedly said Monday morning that he relied on Murdaugh’s directions on how to disburse money, including when Murdaugh wrote checks to State Bank of Palmetto instead of individual custodian accounts. But Limehouse pointed out that it was Laffitte who moved all the checks Murdaugh had asked of him as banker to State Bank of Palmetto.

Laffitte acknowledged that the loans to Murdaugh were unsecured, as Murdaugh was more than $100,000 discovered at the bank at the time. Laffitte testified that unsecured loans were not uncommon for the bank.

At one point, Laffitte said he was dependent on Murdaugh’s direction “as their advocate” when making money transfers from the account, but Limehouse hit back.

“You can’t rely on him as a custodian unless you know those funds belonged to Natasha Thomas and Hakeem Pinckney,” Limehouse said, to which Laffitte said he misspoke.

Limehouse pressed Laffitte on the reason given for a $750,000 loan that Laffitte made to Murdaugh apparently to cover the cost of renovations to an Edisto Beach house that was worth less than the cost of the loan. Laffitte said the loan was also intended to cover other expenses. But Limehouse said Laffitte represented the loan to the bank’s board as only covering beach house renovations. Laffitte said this was not intended to hide the purpose of the loan, but rather normal operating procedure with the council.

“We don’t talk about how the funds are spent with the board,” Laffitte said.

Other expenses weren’t mentioned in the emails at the time because “our lawyers asked us to keep our emails short,” he said.

Limehouse pointed out that Laffitte took out loans on Plyler’s account to pay off loans he received from another bank, credit card bills and other personal expenses, as well as giving Murdaugh a million dollars. dollars to repay his loans. Laffitte does $450,000 in fees for monitoring Murdaugh’s client accounts, and “in exchange, you let Alex Murdaugh use that money however he wanted,” Limehouse said.

“It wasn’t a trade, it was a business decision,” Laffitte said. “If he needed the money, I made the decision whether to pay it or not.”

Limehouse also pointed out that Laffitte did not pay taxes on the fees he received from the accounts, but Laffitte testified that this was not because he was helping Murdaugh steal money, but because “I just didn’t want to pay taxes on it.”

“It was stupid,” Laffitte testified.

On Friday, Laffitte testified for more than three hours, answering questions from his own attorneys.

Laffitte told jurors he followed Murdaugh’s instructions in withdrawing money from clients of Murdaugh’s law firm, based on the good intentions of the prominent Hampton County attorney whom he referred to as a client. longtime and personal friend.

Laffitte said on the stand Friday that he never intentionally stole money from anyone, but said “I did it absolutely unintentionally.”

The former CEO of State Bank of Palmetto also testified that as a bank executive and as a custodian empowered to oversee numerous accounts that Murdaugh’s law firm set up for minors injured in car crashes, Laffitte could legally move money for investment purposes.

Two others State Bank of Palmetto leaders, who happened to be Laffitte’s father and sister, had approved a particularly controversial payment of $680,000 to cover funds that Murdaugh had instructed Laffitte to withdraw from the client’s account Arthur Badger.

Questions about the decision raised by Palmetto State Bank board members ultimately led to Laffitte’s dismissal by the board. On Friday, lawyers for Laffitte released a recording of a closed-door board meeting in which the bank’s lawyer discussed the payment with the board, hoping to show that bank officials were aware of his actions at the time.

Laffitte was due to be cross-examined for a few hours on Monday, with closing arguments expected after.

This is a developing story. It will be updated.

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