Laffitte court enter.jpg — Former Palmetto State Bank CEO Russell Laffitte arrives at Charleston's federal court Monday, Nov. 7, 2022. He faces six federal charges related to allegedly helping disgraced attorney Alex Murdaugh steal from clients. Grace Beahm Alford/Staff

Grace Beahm Alford gbeahm@postandcourier.com

Two family members of former Hampton County banker Russell Laffitte testified Nov. 9 they never suspected their relative could have played a role in Alex Murdaugh’s efforts to steal from clients — until a cascade of investigations revealed how the now-disbarred attorney did it.

Though Murdaugh is not on trial, Laffitte’s federal case has unpacked in fine detail how the former lawyer allegedly took the money owed to his personal-injury clients and used it for himself. Jurors have seen reams of checks and money orders that sent clients’ settlement funds to Murdaugh, his family members and those he had debts with.

Laffitte’s name appears on many of those documents. He was the chief executive of Hampton-based Palmetto State Bank, which his family owns. There, he effectively worked as Murdaugh’s personal banker. Laffitte also served as a court-appointed custodian for several of his client’s funds. Prosecutors say he was charged with protecting clients’ money but ultimately signed the checks diverting it away from them.

Laffitte’s sister-in-law, Jeanne Seckinger, played a key role in unearthing the alleged scheme.

Seckinger was the chief financial officer at Murdaugh’s former law firm, Peters, Murdaugh, Parker, Eltzroth, Detrick in Hampton. Over the course of 2021, Seckinger testified she began to discover what Murdaugh had done — first finding he hid money he owed to the firm, and later discovering that he’d taken client money, too. Investigators would later accuse him of plundering nearly $9 million in all.

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Her suspicions that something was amiss began in April 2021, when the law firm received an incomplete payment from another firm Murdaugh had collaborated with on a case. The check had money for the firm’s expenses, but not for Murdaugh’s cut of the legal fees.

Seckinger said law firm employees worried Murdaugh was trying to hide his income from legal fees. Murdaugh was being sued at the time because, years earlier, his son Paul Murdaugh had wrecked the family’s boat after a night of drinking with his friends. One of the teenagers on board, Mallory Beach, died in the crash.

The firm became concerned that Murdaugh might try to hide his income from the family suing him to avoid financial liability, Seckinger said. She testified the firm wanted to figure out what was happening because “we wanted no part.”

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For weeks, Seckinger said, she struggled to get a satisfactory answer about the money Murdaugh owed the firm. Then, on June 7, 2021, she confronted him in his office, asking for proof the other law firm still had the money. As they talked, she said, Murdaugh got a phone call informing him that his father had entered hospice. The meeting was cut short.

That night, Murdaugh’s wife, Maggie, and son Paul were found shot to death at the family’s remote Colleton County hunting lodge. Murdaugh is charged with murder in connection with the killings, which set off an international media firestorm; he denies the allegations.

A few days later, his father died.

Seckinger didn’t conclude that Murdaugh was stealing money from the firm until months later, on Sept. 2, 2021, when a member of her staff found a check on Murdaugh’s desk. It showed the lawyer had received fees from the case she’d asked about in April and sent part of the money to his father.

Murdaugh was fired from the firm the next day. Two days later, Murdaugh allegedly hired a man to shoot him as part of a botched suicide plot he concocted so his remaining son could collect on his life insurance policy.

As the firm investigated, Seckinger said she didn’t believe Laffitte played a role. He was her brother-in-law and she “trusted him implicitly." But as the firm revisited Murdaugh’s old case files, she found checks intended for clients that were written to “Palmetto State Bank.” Seckinger asked Laffitte for records showing where the money went. They reflected payments that went to Murdaugh’s benefit, she testified.

Assistant U.S. Attorney Emily Limehouse asked Seckinger about several of them. Each time, Seckinger testified the law firm couldn’t see where the money went after the bank received the checks.

“Who saw that?” Limehouse asked repeatedly.

“Russell,” Seckinger responded each time.

Limehouse asked her who was "on the back end" of Murdaugh's fraud — a question Seckinger said was difficult for her to answer.

“I love him very much,” Seckinger said of Laffitte. “I don’t know what he knew.”

But she testified she was certain her brother-in-law had endorsed the checks at issue. And she said he was in a position to put an end to Murdaugh’s scheme.

“He could’ve with a phone call. I’m not saying he’s the only one,” Seckinger said. “There were a lot of missed opportunities."

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Defense attorney Bart Daniel sought to draw attention to that point as he questioned Seckinger, focusing on how Murdaugh used his charming personality to gain others’ trust and became hard to pin down when concerns were raised. Seckinger testified that, in hindsight, he seemed to use a photographic memory to keep his stories straight.

But Daniel was unable to question Seckinger about why the law firm didn’t detect Murdaugh’s scheme earlier — a core point in his earlier argument that Murdaugh was a manipulator who fooled many people, including Laffitte. U.S. District Judge Richard Gergel narrowed his questioning to Laffitte’s case, not the broader Murdaugh saga.

“The firm is not on trial. The defendant is on trial,” Gergel said.

In testimony ahead of the trial, Laffitte acknowledged his role in the handling of Murdaugh’s checks, but said he was simply following the instructions he received from a man he trusted and didn’t know what the lawyer was doing.

Jurors will have to be convinced that he was a willing participant in the scheme in order to return a guilty verdict.

Laffitte faces six federal charges related to his dealings with Murdaugh: one count each of bank fraud, wire fraud and conspiracy, and three counts of misappropriation of bank funds. He separately faces 21 counts in state court.

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Earlier in the day, jurors heard testimony from Norris Laffitte, a board member at Palmetto State Bank who testified he voted to fire Laffitte, his first cousin once removed, in January.

Asked why, he got choked up and said, “This is hard.”

But he said Russell Laffitte couldn’t keep the job in the face of evidence he’d converted client checks to Murdaugh’s benefit. And he said he felt Russell Laffitte’s fiduciary responsibility to the bank “has not been served at all by these dealings.”

“I’m just baffled by all of it,” Norris Laffitte said. “We had to get rid of him. He lied to the board.”

The trial is scheduled to resume Nov. 10, but Gergel said he was monitoring whether conditions from Hurricane Nicole would require a delay.

Reach Thad Moore at 843-937-5703. Follow him on Twitter @thadmoore.

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Russell Laffitte's sister-in-law testifies Alex Murdaugh investigation revealed bank's role