Laffitte defends loans he approved to Murdaugh as prosecutor grills him in bank fraud lawsuit – InsuranceNewsNet

Laffitte was the ninth and final defense witness. He spent three hours in the witness box on Friday, undergoing friendly questioning from one of his lawyers, Matt Austinon the dozens of financial transactions he has made over the years.

The defense is trying to show that Laffitte was an unwitting dupe of Murdaugh, whom he trusted because of his long relationship with the bank and his former law firm.

The prosecution is trying to convince the jury that Laffitte was Murdaugh’s willing and knowing accomplice in a conspiracy that lasted 11 years until the bank fired Laffitte in January. The charges are outlined in a six-count indictment against Laffitte, alleging bank and electronic fraud and embezzlement of bank funds.

Asked about loans

Laffitte told Limehouse on Monday he was aware that a large loan he gave to Murdaugh for “agricultural” purposes would in fact be used to repay the loans Murdaugh had taken out on behalf of Hannah Plylerthen minor.

Plyler was injured in a car accident and received a settlement by the Hampton County law firm of Murdaugh.

“I assumed so,” Laffitte said of the loan.

“You knew, because you did it,” Limehouse said.

Laffitte said he unknowingly created a curator account for the client Natasha Thomas under Murdaugh even though Thomas had already turned 18 and was no longer required by law to have a custodian oversee his account. The document signed by Laffitte misstated Thomas’ age, saying she was only 15.

Laffitte said the document was completed by Murdaugh and that Laffitte was dependent on Murdaugh’s advice to open the account.

“I hadn’t checked his driver’s license or ID card,” he said.

In another instance, Laffitte was acting as custodian for an account for another settlement beneficiary, Hakeem Pinckneyafter Pinckney’s death.

Laffitte repeatedly said on Monday that he relied on Murdaugh’s directions on how to disburse money, including when Murdaugh wrote checks to State Bank of Palmetto instead of individual custodian accounts. But Limehouse pointed out that it was Laffitte who moved all the checks Murdaugh had asked of him as banker to State Bank of Palmetto.

Laffitte acknowledged that the loans to Murdaugh were unsecured, as Murdaugh was more than $100,000 discovered at the bank at the time. Laffitte testified that unsecured loans were not uncommon for the bank.

At one point, Laffitte said he was dependent on Murdaugh’s management “as their advocate” when making money transfers from the account.

“You can’t rely on him as a custodian unless you know those funds belonged to Natasha Thomas and Hakeem Pinckney,” Limehouse said, to which Laffitte said he misspoke.

Limehouse pressed Laffitte on the reason given for a $750,000 loan that Laffitte made to Murdaugh apparently to cover the cost of renovations to an Edisto Beach house that was worth less than the cost of the loan.

Laffitte said the loan was also intended to cover other expenses. But Limehouse said Laffitte represented the loan to the bank’s board as only covering beach house renovations. Laffitte said this was not intended to hide the purpose of the loan, but rather normal operating procedure with the council.

“We don’t talk about how the funds are spent with the board,” Laffitte said.

Other expenses weren’t mentioned in the emails at the time because “our lawyers asked us to keep our emails short,” he said.

Limehouse pointed out that Laffitte took out loans on Plyler’s account to pay off loans he had received from another bank, credit card bills and other personal expenses, as well as to give Murdaugh $1 million to repay its loans. Laffitte does $450,000 in fees for monitoring Murdaugh’s client accounts, and “in exchange, you let Alex Murdaugh use that money however he wanted,” Limehouse said.

“It wasn’t a trade, it was a business decision,” Laffitte said. “If he needed the money, I made the decision whether to pay it or not.”

“I just didn’t want to pay taxes on it”

Interviewed by Limehouse, Laffitte also admitted that he hadn’t paid federal income tax for years on hundreds of thousands of dollars in fees he earned overseeing guardianship money for alumni. Murdaugh’s clients, who had received large sums of money in legal settlements.

Not only did Laffitte earn fees from the guardianships, but he repeatedly allowed Murdaugh to borrow money from the guardianships, he testified.

Limehouse also pointed out that Laffitte only paid tax on the fee in 2021, after the FBIthe State Law Enforcement Division and his bank started asking about the fees.

Laffitte told the jury that he paid his bank taxes after speaking with his unidentified accountant, and not because of questions from law enforcement, who urged him to do so.

“I just didn’t want to pay taxes on it,” he said, acknowledging it was “stupid.”

Limehouse repeatedly asked Laffitte if he knew that some of the money Murduagh asked him to transfer to his own account and to Murdaugh’s relatives and associates was stolen money.

“I did not recognize that these were stolen funds,” Laffitte replied several times.

Laffitte also said that when asked to sign forms for disbursement of money to various parties by Murdaugh, he did not always look for specific lines on the forms indicating where the money was going.

And when Murdaugh gave him paychecks bearing the name of an individual guardianship, Laffitte said he didn’t put the money in the guardianship, but he split the money and wrote checks or mandates to other parties.

Asked by Limehouse why he (Laffitte) didn’t ask about why Murdaugh was ordering him to split the checks and send the money to other parties instead of the person listed on the memo line check, Laffitte said he didn’t pay attention to checking the memo lines. He said these were only for the writer of the check – not the recipient of the check.

“If I started questioning every check you get in the bank, you’d be doing it all day,” Laffitte said.

Laffitte testified that he considered Murdaugh a good client and said: “I did what my client asked” – a phrase he repeated earlier on Friday.

When it became known that Murdaugh had spent millions over the years and was deeply in debt despite earning a substantial income, Laffitte said he believed the attorney had a gambling problem.

“It was the only thing I could figure out how he could spend the amount of money he stole,” he said.

When Limehouse questioned Laffitte about hundreds of thousands of dollars in checks that Murdaugh had written to CE Smith in the summer of 2021, Laffitte said he believed Smith was doing construction work at Murdaugh’s beach house and was being paid for it.

Smith was charged with Murdaugh’s complicity in money laundering and drug trafficking.

After Laffitte’s testimony, the judge Richard Gergel denied a request by Laffitte’s attorneys to dismiss the case, saying there was ample evidence for the case to go to the jury on all six counts.

Laffitte was the last witness to testify in the two-week trial.

In the prosecution’s closing argument on Monday, Limehouse said, “Absolute power corrupts absolutely. … It is this absolute power that gave (Laffitte and Murdaugh) the opportunity to exploit the most vulnerable.

Despite the defense’s argument that Murdaugh was the one who devised a scheme to steal his own clients’ money and that Laffitte was misled into helping him, Limehouse argued that a “chaotic” Murdaugh needed someone as “meticulous” as Laffitte to carry out the plan.

“Maybe it wouldn’t have happened without Alex Murdaughbut none of this could have happened without the defendant,” Limehouse said.

The defense was due to give its closing argument later Monday.

“I did it unintentionally”

Laffitte told jurors Friday, when speaking in his own defense, that he followed Murdaugh’s instructions in withdrawing money from clients of Murdaugh’s law firm.

Laffitte said he never intentionally stole money from anyone, but said on Friday that “I did it unintentionally.”

He also testified that as a bank executive and as a custodian empowered to oversee numerous accounts created by Murdaugh’s law firm, Laffitte could legally move money for investment purposes.

Two others State Bank of Palmetto executives, Laffitte’s father and sister, had approved a particularly controversial payment of $680,000 to cover funds that Murdaugh had instructed Laffitte to withdraw from the client’s account Arthur Badger.

Questions about the decision raised by Palmetto State Bank board members ultimately led to Laffitte’s dismissal by the board. On Friday, lawyers for Laffitte released a recording of a closed-door board meeting in which the bank’s lawyer discussed the payment with the board, hoping to show that bank officials were aware of his actions at the time.

This is a developing story. It will be updated.

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