COLUMBIA, S.C. — The federal conviction and sentence of Alex Murdaugh’s alleged fraud accomplice and banker Russell Laffitte have been reversed by the U.S. 4th Circuit Court of Appeals.

The 37-page unanimous ruling overturning the verdict in Laffitte’s three-week trial in Charleston in November 2022 was handed down by a three-judge panel on Thursday morning.

The panel said that trial Judge Richard Gergel’s removal of a juror, and replacement by an alternate, during jury deliberations violated Laffitte’s Sixth Amendment right to an impartial jury.

The record shows there was a “reasonable and substantial possibility” the juror’s removal was related to her views of the case, the judges said. After the juror indicated she disagreed with other jurors and was replaced, “the reconstituted jury returned a guilty verdict in less than an hour,” the ruling said.

Gergel also violated Laffitte’s Fifth Amendment right to be present at a critical stage of the trial when Gergel questioned the juror he excused in a closed proceeding away from Laffitte and his lawyers, the ruling said.

The ruling cited no missteps by prosecutors.

The reversal was the first setback for state or federal prosecutors in the sprawling five-year legal and crime saga involving convicted killer and disbarred lawyer Murdaugh, 56, who is currently serving life sentences in state prison for killing his wife and son.

Murdaugh also has lengthy prison sentences for fraud after pleading guilty in both state and federal courts to thefts involving some $10 million or more from his law firm and former clients. One Murdaugh accomplice, disbarred lawyer Corey Fleming, remains in federal prison in Jesup, Ga., until 2026 after pleading guilty to fraud.

Thursday’s reversal of Laffitte’s conviction apparently has no impact on any other Murdaugh-related case.

“In accordance with the decision of this court, the defendant’s convictions and sentence are vacated. These cases are remanded to the district court for further proceedings consistent with the court’s decision,” the appeals court said.

Laffitte, 53, will be tried again on the same charges, said U.S. Attorney Adair Ford Boroughs late Thursday morning.

“The Fourth Circuit ordered a retrial based only on the district court’s replacement of a deliberating juror. Its ruling has no impact on the charges against Laffitte going forward. We respect the court’s decision and stand ready to prove Laffitte’s guilt beyond a reasonable doubt a second time,” Boroughs said.

Laffitte and Murdaugh had known each other since childhood, and each ascended to key positions in two of Hampton County’s most prominent institutions: Murdaugh’s law firm and Laffitte’s Palmetto State Bank.

Laffitte is currently an inmate at a federal prison in central Florida near Orlando. He had been scheduled to be released in March 2029, but the overturning of his sentence and conviction will likely lead to his release from prison as soon as practicable, possibly getting him home by Thanksgiving or certainly Christmas.

Laffitte was found guilty by a Charleston federal jury in November 2022 on six counts of conspiracy, bank and wire fraud and misapplication of bank funds. The verdict ended a lengthy trial that also put disgraced ex-attorney and accused murderer Murdaugh in the spotlight.

After the trial, Gergel sentenced Laffitte to seven years in prison.

Murdaugh had used Laffitte’s bank for years to hide and manipulate money he was stealing from clients, according to evidence at the trial. Laffitte had helped him, according to the government’s case.

Between 2006 and 2021, Laffitte used his position as chief executive officer at Palmetto State Bank in Hampton to help Murdaugh defraud Murdaugh’s personal injury clients, according to the government’s case.

To further the conspiracy, Murdaugh had Laffitte serve as the conservator or personal representative for the settlement accounts of multiple clients from Murdaugh’s firm.

“As a result, Laffitte could access the settlement accounts and used those accounts to collect over $450,000 in fees and to extend sixteen unsecured loans worth approximately $960,000 to Murdaugh. In total, Laffitte and Murdaugh were alleged to have stolen nearly two million dollars from the settlement accounts,” the 4th Circuit panel wrote Thursday summing up the government’s case.

The trial also exposed the cozy inner workings of both Palmetto State Bank and Murdaugh’s former law firm, which was known as Peters, Murdaugh, Parker, Eltzroth & Detrick.

Testimony by 15 government witnesses was aimed at showing how self-dealing, moneymaking behavior by Murdaugh and Laffitte was covered up or not explored by the bank and the law firm.

Laffitte, who testified for five hours, and eight other witnesses were put up by the defense.

Laffitte and his lawyers portrayed him as a person who had been manipulated by Murdaugh, a master con man, according to testimony at the trial.

But federal prosecutors refuted that, saying that Murdaugh would bring Laffitte checks from the law firm that were to go to specific clients, and Laffitte would distribute the money in various bank accounts in ways that both he and Murdaugh profited.

“None of this would have happened without Alex Murdaugh, but none of it could have happened without the defendant (Laffitte),” lead federal prosecutor Emily Limehouse told the jury in her 70-minute closing argument.

In sentencing Laffitte, Gergel said “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.”

On replacing the juror, Gergel announced to the courtroom, “We’re in virgin territory... I’ve tried 100 cases myself and I’ve been on the bench for 13 years. And I’ve never seen anything like this.”

After the 2022 trial, Laffitte hired a new team of lawyers for the appeal. Arguing Laffitte’s case before the 4th Circuit were Billy Wilkins, a former judge on the 4th Circuit Court of Appeals now in private practice, and John Nieman Jr. They were assisted by attorneys Mark Moore and Michael Parente.

Arguing the government’s case in the appeals court were assistant U.S. Attorneys Emily Limehouse and Kathleen Stoughton, who were assisted by assistant U.S. Attorney Winston Holliday.

The three appeals court judges who made the ruling were Steven Agee, Stephanie Thacker and Toby Heytens.

It took the judges only seven weeks after oral arguments on Sept. 25 in Richmond, Va., to issue a ruling — an extraordinarily fast time in a court where rulings can take many months.

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