Murdaugh accomplice Laffitte struggles to sell bank stock to pay $3.5 million

Former South Carolina banker and convicted fraudster Russell Laffitte was supposed to come up with $3.5 million in restitution funds before being formally sentenced and reporting to federal prison this summer.

But Laffitte, who in April pled guilty to bank fraud that involved scheming with convicted white collar criminal Alex Murdaugh to launder millions at Laffitte’s former bank, is having trouble coming up with the money, according to federal court records.

Laffitte’s formal original sentencing date has been delayed. It is now set for Sept. 29 in U.S. District Court in Charleston before Judge Richard Mark Gergel. Sentencing was originally set for July 24.

To come up with the $3.5 million in restitution funds, Laffitte was supposed to sell his shares in his former bank, Palmetto State Bank, and possibly liquidate other assets.

Laffitte was the Palmetto State Bank’s CEO before he was fired in January 2022 as Murdaugh’s years of money laundering at Laffitte’s bank were beginning to come to light.

“Undersigned counsel has worked diligently to assist Mr. Laffitte in the liquidation of his assets to pay restitution — and that effort is ongoing but is not complete,” wrote Laffitte lead attorney Mark Moore in a July 10 motion to Gergel requesting additional time for Laffitte to sell his shares.

As recently as 2023, Laffitte had more than $10 million in assets, including $6 million in Palmetto State Bank stock, another $100,000 in stock at Bank of America, and $1 million in his 401K, according to court records. He also had about $5 million in liabilities.

Unlike Bank of America’s stock, which is traded daily on the New York Stock Exchange, Palmetto State Bank stock is not listed on a major exchange and has no ready market where its shares can easily be bought and sold.

Many shares are held by Laffitte family members. The bank’s headquarters are in Hampton in Hampton County in the southeast corner of the state.

In their July 10 motion to delay Laffitte’s sentencing hearing, Laffitte’s lawyers indicated that one reason Laffitte has been unable to sell his shares to the bank is because of a disagreement on price.

“At this time, however, Mr. Laffitte and PSB have not reached an agreement regarding the valuation of Mr. Laffitte’s stock,” the motion said.

Laffitte is also trying to sell some of his bank stock to potential buyers not affiliated with Palmetto State Bank.

“However, the sale of his stock is a complex process that involves the assistance of counsel with experience in securities laws and regulations,” Moore wrote.

Moore declined comment to a State newspaper reporter.

Besides Moore, Laffitte’s lawyers include Michael Parente, Shaun Kent, Cheryl Shoun and Jada Wilson.

Federal prosecutors on the case are Emily Limehouse, Katie Stoughton and Winston Holliday.

Laffitte was tried and found guilty in a November 2022 trial in federal court in Charleston. Gergel sentenced him to seven years in prison for bank and wire fraud.

However, Laffitte appealed his sentence and conviction, alleging that Gergel had mishandled issues involving substitution of original jurors by alternate jurors. A three-judge panel with the 4th Circuit Court of Appeals agreed.

Laffitte, who contended he was innocent and had been manipulated by a smooth-talking Murdaugh, at first wanted a retrial. But he finally agreed to plead guilty to six counts of bank and wire fraud.

Under a plea agreement with the government, Laffitte will be given a five-year prison sentence — two years less than his previous sentence for the same offenses. He has already served about year in federal prison, and he will be given credit for that under the plea deal.

Murdaugh is currently serving two consecutive lie sentences in state court for murder in the killings of his wife, Maggie, and son Paul. He has also been sentenced to 40 years in federal prison for his role in the federal crimes that Laffitte was convicted of.

Laffitte and Murdaugh, both men in their 50s, were childhood friends growing up in Hampton in privileged circumstances.

Murdaugh came from a multi-generational legal family whose powerhouse law firm was headquartered in Hampton. Laffitte came from a multi-generational banking family that founded what became Palmetto State Bank, headquartered in Hampton and a major financial player in the southeastern Low Country.

This story was originally published July 21, 2025 at 5:30 AM with the headline "Murdaugh accomplice Laffitte struggles to sell bank stock to pay $3.5 million."