COLUMBIA, S.C. — Russell Laffitte, the South Carolina banker whose ties to fraudster and killer Alex Murdaugh helped Murdaugh steal millions, has agreed to plead guilty to federal bank fraud charges.

In agreeing to plead guilty, Laffitte — former CEO of family-owned Palmetto State Bank in Hampton County — will avoid going to trial a second time. In 2022, a Charleston federal jury convicted Laffitte of six federal financial crimes including bank fraud, wire fraud and misapplication of bank funds. The crimes span from 2011 to 2021.

In 2023 Laffitte was sentenced to seven years in federal prison and ordered to pay $3.5 million in restitution and to forfeit $85,854 in illegal proceeds.

But he won a new trial last year after serving 13 months in a federal prison in Florida. Federal prosecutors promptly said they would put Laffitte on trial again. That trial was supposed to begin in May.

Under the plea deal made public Monday between Laffitte’s lawyers and federal prosecutors, Laffitte is slated to get five years, or 60 months, instead of the seven years that U.S. Judge Richard Gergel originally sentenced Laffitte to in August 2023.

Laffitte would get credit for the 13 months he has already served.

The deal assures that the names of Laffitte, a banker, and Murdaugh, a now-disbarred lawyer, will be forever linked as two of South Carolina’s most notorious white collar criminals — two men at the top of their professions who went on to betray their colleagues, their families, their careers and trust of all who believe that lawyers and bankers always adhere to high ethical standards.

Laffitte’s retrial was scheduled to start May 5 in federal court in Charleston. Now he is tentatively slated to enter a formal guilty plea in federal court in Charleston on Friday, April 18.

Gergel was scheduled to preside over the trial, which was expected to last two weeks.

In sentencing Laffitte in August 2023, Gergel emphasized how Laffitte had been a willing participant in “an elaborate criminal scheme in which there wasn’t just bad judgment, there was complicity, for which he was richly compensated.”

And the people Laffitte and Murdaugh stole from, Gergel noted, had been “extremely vulnerable people. Their family members were victims of horrible, tragic events in their lives; death, people widowed, lost their parents. It was horrible to vulnerable people. And he treated them like they were players on a chessboard, moving that money around. He was making money, Murdaugh was making money.”

Evidence in Laffitte’s first trial showed he and Murdaugh were responsible for stealing $3.7 million from former Murdaugh legal clients whose settlement money Murdaugh steered to Laffitte’s bank.

Murdaugh used Laffitte’s bank and Laffitte to set up bank accounts and to launder client settlement money at Murdaugh’s law firm over to the bank. The money largely came from settlements that were supposed to be paid out or held in trust for relatives and survivors in wrongful death or personal injury cases.

Once in the bank, the money was manipulated and plundered by Laffitte and Murdaugh, who used the funds for loans and their own personal enrichment, evidence showed. (In recent years, Murdaugh has pled guilty in state and federal court to stealing millions from clients and his former law firm. His guilty pleas include money he stole using Laffitte’s bank.)

Toward the end of the trial, Laffitte spent five hours on the witness stand, portraying himself as a simple country banker led astray by his misplaced trust in Murdaugh, a lifelong friend and a reliable bank customer who had the gift of gab and could get people to trust him.

Laffitte was “shocked” to learn about the extent of Murdaugh’s frauds and any actions the banker took that helped Murdaugh steal were done “unknowingly, unintentionally,” Laffitte attorney Micheal Parente told Gergel at Laffitte’s 2023 sentencing hearing.

Takeaways from Laffitte’s first trial included:

—Testimony revealing exactly how easy it was for Laffitte and Murdaugh to exploit weaknesses in the law firm’s and the bank’s internal financial security systems and steal money. Both the bank and law firm, now named The Parker Group, say they have upgraded internal systems.

—Dramatic testimony by two sisters, Alania Plyler Spohn and Hannah Plyler, about how Laffitte’s mismanagement of more than $1 million Murdaugh won for them in settlements had upset their lives. The two were 12 and 8 years old when their mother and older brother died when a faulty tire caused the car they were riding in to crash into a thicket of trees. One example of mismanagement: Laffitte used $20,000 of the money from Hannah’s account to build a swimming pool, an FBI accountant testified.

—Prosecutors focused on Laffitte as being an essential part of the scheme, although it was Murdaugh who did the initial embezzling. Laffitte “was the only person who saw both sides of the scheme. First, he saw the disbursement sheets and knew exactly where the settlement money was supposed to go. Second,he personally negotiated every single check of stolen funds that Murdaugh presented to him, so he saw where the money actually went,” prosecutors wrote in a sentencing memo for Laffitte’s first trial.

—Laffitte made more than $450,000 for in conservatorship and personal representative fees from managing the money Murdaugh brought him, did little work on the accounts and paid no taxes on the money. He also used the money in his custody to extend himself personal loans at low rates.

In sentencing Laffitte in 2023, Judge Gergel told the court, “The evidence is overwhelming that Mr. Laffitte was an integral part of this operation ... This is as sophisticated a crime as I have seen in my 13 years on the bench.”

Laffitte, like Murdaugh, was once an outstanding citizen in his community and in his chosen profession.

Laffitte had started at his family-owned bank in 1997 as a bank teller and worked his way up to CEO. In 2019, Laffitte was named Banker of the Year by the Independent Banks of South Carolina association.

According to court records, Laffitte was a well-to-do man when sentenced in 2023. He had $6 million recorded assets in Palmetto State Bank stock, another $100,000 in stock at Bank of America, and $1 million in his 401K, said federal prosecutor Limehouse at his sentencing hearing.

The overturning of Laffitte’s conviction last November by the U.S. Fourth Circuit Court of Appeals did not involve any issues with the prosecution’s case. Instead, the appeals court found problems with the way Gergel had replaced a juror during jury deliberations.

Murdaugh, now serving life sentences in state prison for the 2021 murders of his wife and son, was a fourth-generation lawyer who had been president of the S.C. Alliance for Justice, the state’s pre-eminent trial lawyers’ group. Murdaugh was disbarred in July 2022.

Laffitte also faces state fraud charges for approximately the same number and kinds of crimes he will plead guilty to in federal court later this week.

On Monday, State Attorney General Alan Wilson told The State newspaper there are “ongoing conversations” about state charges against Laffitte but no decisions are ready to be made public. State prosecutors have said they want to put Laffitte on trial this fall.

Besides Limehouse, federal prosecutors in this case are Winston Holliday, Kathleen Stoughton and Ben Garner.

Laffitte’s lawyers include Mark Moore, Shaun Kent, Michael Parente and Cheryl Shoun.

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