CHARLESTON, S.C. (WCBD) – Ex-Palmetto State Bank CEO and accused accomplice of Alex Murdaugh Russell Laffitte took the stand for nearly five hours on Friday for direct examination by his defense attorneys. Laffitte adamantly denied stealing any money from bank accounts, saying he never intentionally helped Murdaugh divert money from his law clients at Palmetto State Bank. Federal Prosecutors expect to question Laffitte on Monday during cross-examination when the trial resumes.

Laffitte began working at Palmetto State Bank in 1997 after graduating from Newberry College when his father, Charlie Laffite Jr., asked him to work at the Hampton Branch. Laffitte began as a teller, working his way up to a loan officer before entering leadership at the bank. Laffitte testified commercial lending became a sweet spot for him.

Growing up, the Laffitte’s lived across the street from Randolph and Elizabeth Murdaugh, and the children often spent time together. Laffitte shed some light on the two families’ familiarity with each other. He is the godson of Murdaugh’s father, Randolph Murdaugh III, and Murdaugh is the godson of Laffitte’s father.

Laffitte described his adult relationship with Murdaugh as mainly professional through Palmetto State Bank, saying the two occasionally ran into each other at social events around the Hampton Community. He testified he never saw the “red flags” of Alex Murdaugh, saying nobody did. Laffitte says he wished he had, and claimed he would’ve flagged Murdaugh’s financial activity at the bank.

Through testimony in the defense’s case, Laffitte and other witnesses have said Murdaugh often made more than a million dollars at his family law firm, PMPED, each year. The witnesses said there were also years when Murdaugh made “only a couple hundred thousand dollars.” Laffitte’s sister, Gray Henderson, testified Murdaugh averaged about $1.5 million a year. Laffitte says Murdaugh’s yearly earnings made bank officials comfortable extending him sizable loans while he appeared to be wracking up debt, thinking he’d eventually be able to pay it off. Laffitte says part of being a community bank is “knowing its customers.” Laffitte says the FDIC looked into Murdaugh several times but never raised any concerns regarding his standing.

Laffitte says state and federal prosecutors began looking into Murdaugh’s cases at the law firm and his financials at Palmetto State Bank in September and October of 2021. At the same time, law partners at Murdaugh’s firm began doing their own internal investigation. Laffitte says PMPED partners Ronnie Crosby and Mark Ball approached him, asking Laffitte to review all of Murdaugh’s financials. Crosby and Ball asked Laffitte to hand-deliver or call them with any findings rather than emailing them because it would be harder to find later on.

Laffitte says the idea to extend loans from the conservatorship account of Hannah Plyler was originally Alex Murdaugh’s. He said Murdaugh came to the Hampton branch in 2009 and asked if it was possible. Laffitte says he received permission from Hampton County Probate Judge Shelia Odom to make the loans. Laffitte testified he extended himself the first loan from Plyler’s account. Murdaugh would ask Laffitte to extend him a loan from the account soon after.

In testimony, Laffitte said he believed extending loans from Plyler’s account was a smart way to make money for the account by securing the loans at a higher interest rate than they were accruing in the bank’s accounts. He also says he made sure checks were filed with the Probate Court because he wasn’t “trying to hide anything.” Laffitte says while Murdaugh’s loans were unsecured, he extended them at higher rates for protection.

Laffitte says Murdaugh asked him to serve as a conservator on several cases, including the Plyler sisters, Hakeem Pinckney, Arthur Badger, and others. Laffitte says it was common for Murdaugh to bring Laffitte a stack of papers to be signed for the conservatorship, which he says he would do without thoroughly reading because he trusted Murdaugh. Laffitte says he later learned Murdaugh used documents to divert money and control funds, something Laffitte claimed he was unaware of at the time.

As Laffitte began investigating the conservator cases he handled for Murdaugh, he uncovered a $1.325 million settlement that was meant for Arthur Badger but instead, was diverted and paid out to several other people. During his testimony, Laffitte says once he uncovered the email trail, he turned it over to the South Carolina Law Enforcement Division. Laffitte says he knew the optics were “bad” and believed Murdaugh had “set him up.”

Laffitte says in his dealings with Murdaugh, Murdaugh would often come into Laffitte’s office in the lobby of the Hampton Bank being loud, chaotic, charismatic, full of life, and in control of the room. He says he knew the second Murdaugh hit the door and knew he’d be making his way to Laffitte’s office. Laffitte testified he would direct money to where Murdaugh said it needed to go because he trusted him, and had worked with him as a bank client for nearly thirty years. Murdaugh began banking with Palmetto State Bank in the 1980s.

Laffitte says the Board of Directors and the older generation of the bank’s leadership often held very “informal” meetings, talking and catching up while conducting the bank’s business until something changed in 2021. In August, the Executive Committee and board began discussing bank loans extended to Murdaugh, including a $750,000 loan Murdaugh received a month earlier in July. Laffitte says three of the five voting members on the Bank’s Executive Committee approved the loan and extended it to Murdaugh before the full board was notified.

Laffitte says even though Murdaugh was more than $350,000 in debt and had millions in outstanding loans, he and his father believed extending the loan to Murdaugh was safe given Murdaugh’s income. Laffitte says he was aware Murdaugh wasn’t working in the wake of his wife and son’s brutal murders but said Murdaugh was still receiving a paycheck. Laffitte says he never questioned Murdaugh’s need for the money, knowing Murdaugh had a “number of irons in the fire” at the time.

In October, Laffitte said the scope of the amount of money missing became more clear. He negotiated a $680,000 settlement check with Crosby and PMPED to cover half of the missing $1.325M owed to Arthur Badger. Laffitte negotiated the check unilaterally and delivered it to Crosby before informing the board. Laffitte says he always cut a $17,000 check to cover half of his conservator and personal representative fees he got from the Badger cases.

On November 3rd, Palmetto State Bank held a board meeting to discuss the settlement check that PMPED had already deposited in its account at the bank. Board members raised extensive concerns about the need to get a release from PMPED to limit legal responsibility. Laffitte says board members never asked for a written dissent of the check.

Shortly after, Laffitte says he received an email from a board member asking for his resignation. At that point, he believed he had made mistakes, but never did anything illegal. Laffitte emphasized he had no intention to ever steal from anyone and says he wouldn’t have been involved with Murdaugh had he known the full extent of Murdaugh’s intentions, claiming to be a victim.

Two other witnesses, Nancy Mae Drawdy and Tiffany Provence, testified before Laffitte. Drawdy works in the loan department at Palmetto State Bank, and Provence offered expert testimony on probate, conservator, and personal representative work.

US District Judge Richard Gergel ended Friday’s hearing after Laffitte’s defense finished its direct examination. Federal prosecutors will have a chance to cross-examine Laffitte first thing Monday morning when court resumes at 9:00 a.m. Judge Gergel is hopeful to begin closing arguments and jury deliberation on Monday.