Hampton Bank CEO Laffitte lent the 2011 settlement to Murdaugh

A now fired Hampton Bank CEO, as a financial representative for a teenager injured in an accident, inexplicably loaned Alex Murdaugh $40,000 from the teenager’s settlement funds in 2011, court documents show.

Russell Laffitte, who was fired as CEO of Palmetto State Bank on Jan. 7, signed a $40,000 loan from an Estill teenager for about $58,000 in settlement proceeds. Murdaugh applied for the loan and had to pay it back in six weeks with interest, documents show.

“I find this very unusual,” said Margaret Day, a Bluffton-based estates attorney for the law firm of Margaret S. Day LLC.

The personal loan was unsecured, meaning there was no collateral to secure it if Murdaugh never paid, and it did not contain any description of how Murdaugh would use the money, according to the post at order.

The money, with interest, was returned to the account a month and three days later in the form of a money order from Laffitte, but it is unclear whether Murdaugh himself repaid it.

The suspicious transaction uncovered by The Island Packet and Beaufort Gazette is among the documents requested by the SC Supreme Court’s Office of Disciplinary Counsel as part of its investigation into Murdaugh and its investigation into Laffitte’s involvement. Already, Murdaugh faces dozens of charges of financial misconduct.

Newspapers learned of Laffitte’s dismissal last week after reporters questioned Palmetto State Bank officials about a subpoena showing the SC Supreme Court’s disciplinary arm in November had requested case files which Laffitte and Murdaugh were working on. The agency, which is investigating Murdaugh’s conduct as an attorney, sent its subpoena to Hampton County Probate Court.

Laffitte served as curator and personal representative for members of a family involved in a 2009 car crash that left a man with a quadriplegia. Murdaugh was their attorney, and hundreds of thousands of dollars in settlement money went missing, attorney Justin Bamberg said last week.

Asked on Friday whether the bank was reviewing cases in which Laffitte was a conservative, Palmetto State Bank released the following statement:

“Palmetto State Bank has taken immediate action to obtain all facts regarding the allegations that have been made, including those involving former executives. It remains committed to taking any appropriate action that may be warranted after conducting a review thorough review of all relevant information.The statement has been attributed to G. Trenholm Walker and Thomas P. Gressette Jr., counsel to Palmetto State Bank, of Walker Gressette Freeman & Linton LLC.

A message for Laffitte left Friday afternoon was not returned.

“Never know” transaction

One of the cases sent to the Supreme Court following his subpoena was that of Malik Williams.

When he was 6 years old, Williams was hit by a car in Estill and seriously injured. His father died a week later in an unrelated incident. Paul Detrick, an attorney at Murdaugh’s former law firm PMPED, helped secure a settlement for the boy to pay medical bills for his injuries.

Williams said they were told by PMPED that they needed a curator, and Laffitte was appointed.

Now 27 with his own landscaping business, Williams said he was unaware Laffitte lent his money.

“I’ve never heard of it,” Williams said. “It makes me want to go find him, so I guess that’s what I’ll do.”

The names of Laffitte and Murdaugh, from powerful decades-old family dynasties in Hampton County, are sprinkled in Hampton County probate court records.

The Probate Court houses records relating to the estates of the deceased. It is also where legal representatives, known as ‘curators’, file documents and monitor the finances of those who are unable to monitor them themselves.

Several probate cases involving Laffitte, reviewed by The Island Packet, show a system in which PMPED attorneys represented injured individuals or families reeling from death, secured a settlement, and referred them to Laffitte to serve. custodian or personal representative.

Having a conservator is not uncommon in Williams’ case, as SC law requires probate courts to appoint a conservator when minors enter settlements over $25,000. Williams was 16 when Laffitte was appointed her curator.

Williams’ account contained approximately $60,000 when it was created, and the custodian’s primary job, as described to Williams and his family, was to hold the money for him until he turned 18.

Was the loan a wise investment?

According to SC law, a conservator “has a duty to the beneficiaries of the trust…. [to] invest and manage the assets of the trust as a prudent investor would.

This could be why the $40,000 loan from William’s settlement funds went to Alex Murdaugh. The account accrued $167.69 in interest in the month it existed.

Day, the attorney for Bluffton’s estate, said it’s debatable whether it was a “prudent” investment.

As a curator, Day said, “I wouldn’t feel comfortable lending to an individual without any collateral for the bulk of my miner’s funds.”

She also said there was the issue of PMPED’s involvement in the case and ties to Laffitte.

“In lending to an associate of the lawyer who represents Mr. Williams, is there a conflict of interest?” she said. “That would be a question I would ask.”

The probate court is required to regulate custodians and review their annual reports.

On December 21, 2011, Laffitte repaid the loan with interest into Williams’ account in a money order in Laffitte’s name, documents show. It is unclear if Murdaugh repaid him or if Laffitte paid the money himself.

Once he turned 18, Williams received the full amount left in his account: $58,107.35.

Families of influence

Prosecutors allege Alex Murdaugh used his prestige and influence as a lawyer to siphon off clients’ money for years. More than a dozen victims have been included in indictments alleging the suspended attorney robbed them.

“When we look at who he allegedly attacked, they were either people with long-standing family or personal contact with him, or people who were particularly confident and vulnerable due to their lack of knowledge of the system, or both,” said Creighton Waters with the SC Attorney General’s Office at a recent bail hearing for Murdaugh.

In total, he is accused of taking more than $6 million. The allegations came to light following widespread attention since the still unsolved murders of Murdaugh’s wife and youngest son on June 7, 2021.

The Murdaugh family is known locally for running the five county attorney’s office for more than 80 years. The Hampton-based Laffitte family grew alongside them, buying the Palmetto State Bank in 1955 and helping it expand into several branches across the Lowcountry.

Russell Laffitte had worked at the bank since 1997, according to his Linkedin page last week, which has since been taken down. Laid off last week, he was also fired from his position as vice president of Independent Community Bankers of America, a national advocacy organization.

Laffitte has not been charged with a crime.