A federal magistrate judge in Charleston Wednesday delayed her decision on whether to lower bond for former bank executive Russell Laffitte in a case that alleges he committed fraud in the mishandling of some $3 million under his and the bank’s stewardship.
Magistrate Judge Mary Gordon Baker gave federal prosecutors until Monday to respond to a motion from Laffitte’s attorneys that his bond conditions, which confine him to his home and require him to wear two ankle monitors, are “excessive.”
Laffitte’s motion to relax his bond conditions was not filed until late Tuesday, and prosecutors did not have time to prepare a reply.
A hearing could be scheduled for a later date, Baker said. Laffitte has pleaded not guilty to all fraud charges.
Laffitte, 51, faces multiple federal counts of fraud in alleged schemes involving fraud concerning the misuse of some $3 million in funds from Palmetto State Bank, where he was CEO until being fired in early January. The schemes at the Hampton bank involved money in various conservatorships from legal settlements and a $500,000 line of credit.
In July, a federal grand jury indicted Laffitte on five counts of fraud, alleging he and an unidentified bank customer used the bank as a tool to steal and launder money. Although the “bank customer” was not identified in the indictment, Laffitte’s lawyers — Bart Daniel and Matt Austin — acknowledged in their Tuesday court filing that that customer was in fact Alex Murdaugh.
The federal grand jury last week charged Laffitte with an additional crime, alleging that in 2015 he approved a $500,000 line of credit that was supposed to go for farming purposes. But a $284,787 cashier’s check written on that line of credit went instead to Murdaugh, who used the money for personal expenses, the indictment said.
Since July, a federal magistrate judge has allowed Laffitte to go free on $500,000 bond but required him to wear an ankle monitor and stay confined to his home, except for certain limited circumstances. Laffitte was required to post $25,000 to remain out of jail pending a trial at an unscheduled date.
Laffitte also wears an ankle monitor on his other leg as a condition set by his indictment in May on state fraud charges similar to the ones he was indicted on by federal authorities.
A state grand jury has accused Laffitte of working with Murdaugh to steal money in conservatorships under the stewardship of Palmetto State Bank.
Laffitte is “a presumptively innocent defendant charged with non-violent crimes, no criminal history, and who has voluntarily appeared numerous times” and he should not be confined to his house and forced to wear two ankle monitors, his lawyers wrote in their motion seeking relaxed bond conditions.
Because of his association with Murdaugh, Laffitte has found himself at the “center of an unprecedented media firestorm” that has caused his bond conditions to be unduly high, Laffitte’s attorneys said.
“Amidst the explosion of coverage, several individuals have found themselves the subject of intense scrutiny for no other reason than their connection with one man — Alex Murdaugh. The same can be said for Mr. Laffitte,” the motion added.
The motion also argued that the controversies affecting their client include recent “credible allegations by counsel for Alex Murdaugh that (state) grand jury information has been leaked to media outlets by members of the State prosecution team.”
Dick Harpootlian and Jim Griffin, Murdaugh’s two criminal defense lawyers, alleged in a court filing Monday that state Attorney General Alan Wilson’s office has deliberately leaked confidential derogatory information about Murdaugh to reporters.
Wilson’s office has denied the allegations.
“The unprecedented media focus on this case is impairing Mr. Laffitte’s ability to receive a fair trial and have resulted in the excessive conditions of bail imposed upon him,” Laffitte’s lawyers wrote.
Federal lawyers Emily Limehouse and Winston Holliday are prosecuting the case for the government.
Murdaugh, 54, has been charged with more than $8 million in various financial thefts from his former law firm, former clients, friends, associates and from his own brother, Randy Murdaugh, since last November. He was also charged with the June 2021 killings of his wife Maggie and son Paul at the family 1,700-acre estate.
He has asserted his innocence in that case.
Murdaugh, a member of a four-generation high-profile and well-to-do Lowcountry legal familywas fired from his law firm for stealing money last September.
He has since been disbarred.