Docs: Murdaugh extended major lines of credit despite being in debt

HAMPTON, SC (WCBD) – Court documents filed in Hampton County provide insight into suspended attorney Alex Murdaugh’s financial situation since 2015.

Court-appointed co-receivers of Murdaugh’s financial assets, attorneys John Lay and Peter McCoy Jr., are seeking a court-ordered response from Palmetto State Bank regarding the numerous lines of credit extended to Murdaugh as he was in debt.

Murdaugh worked with Palmetto State Bank on a regular basis both personally and professionally through former executives Chad Westendorf and Russell Laffitte. The de Laffitte family founded the bank and had been its CEO during some of the alleged financial crimes against Murdaugh.

While reviewing Murdaugh’s banking records, the receivers discovered what they call “suspicious banking activity” related to Murdaugh’s “checking accounts and the timing of certain of his loans,” according to the filing.

The first example from February 2015 shows Murdaugh applying for a line of credit secured by a property he owned for $500,000. The filing indicates that by May, Murdaugh had exhausted the entire amount and had a negative checking account balance of $51,937. The credit amount has been increased to $1,000,000.

Two years later, in November 2017, Murdaugh had a negative checking account balance for all but seven days of the month, reaching $34,060.30 in debt at the lowest point. Murdaugh’s debt was covered by receiving two separate payments of $60,000 from two members of his family. Murdaugh would receive a line of credit advance a month later in December.

In February and March 2018, the documents indicate that Murdaugh was again in debt, weeks at a time with a negative balance of up to $33,841.17.

The file shows that Murdaugh wrote a number of checks over three months during the summer of 2020 to Curtis Edward Smith, an alleged accomplice and client of Murdaugh who is criminally charged for his role in the botched suicide effort of Murdaugh on Labor Day weekend 2021. The checks came from Murdaugh’s Palmetto State Bank accounts for a total of $152,155.87. Murdaugh would reach a negative balance of $53,302.22 despite depositing “significant” sums on his million dollar line of credit.

The discovery shows that Murdaugh paid Smith more than two and a half million dollars between 2019 and 2021, which does not include payments and amounts from previous years. Last summer, Murdaugh paid Smith $305,465.31 in multiple payments despite having a negative balance.

In July 2021, Palmetto State Bank extended Murdaugh a $750,000 line of credit, when he had a negative balance of $162,014.03.

Records show Murdaugh’s loans were regularly overdue with late fees. In testimony, Laffitte said overdue payments were discussed weekly. Loans over $25,000 were entered on a list submitted monthly to the bank’s board of directors.

In the same testimony, Laffitte says Murdaugh’s accounts and finances were discussed “periodically”, including whether or not Murdaugh intended to pay off his balance.

In response to the discovery, the receivership sent a subpoena to Palmetto State Bank requesting copies of board meeting minutes and information related to the ongoing loan payment request process.

The bank opposed the request by letter and the receivership is asking the court to order Palmetto State Bank to provide the information.