Jan Malinowski — Direct/Cross/Redirect/Recross (Recall)
774 linesMR. WATERS: Your Honor, the state calls Jan Malinowski.
The witness, JAN MALINOWSKI, was first duly sworn and testified as follows:
COURT CLERK: Take a seat in the witness stand, please. State your name again for the record. Spell your last name.
JAN MALINOWSKI: My name is Jan Malinowski, M-a-l-i-n-o-w-s-k-i.
DIRECT EXAMINATION
BY MR. WATERS:
MR. WATERS: Mr. Malinowski, how are you doing today?
JAN MALINOWSKI: Doing well, thank you.
MR. WATERS: Good. Introduce yourself to the jury a little bit. Just tell them a little bit about yourself, kind of a little bit about your background and your career, and ultimately where you are now.
JAN MALINOWSKI: I'm currently the CEO of Palmetto State Bank headquartered in Hampton; I work in the Beaufort office. I started banking career out of the Citadel in the late 70's. I went to graduate school at the University of South Carolina. Had a progression of jobs at larger banks: Wachovia Bank and Trust, Barnett Banks of Florida, First Union Bank, and then in February of 1991 I joined Palmetto State Bank.
MR. WATERS: And Palmettos State Bank, so you've been there since 1991?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: In what roles have you served at Palmetto State Bank over the years?
JAN MALINOWSKI: Principally in charge of both of our branches. We have two branches in the Beaufort area, one on Lady's Island and one in the Burton, which is west of Beaufort, and that's been primarily my focus on a day-to-day basis, but I do have other responsibility inside the company.
MR. WATERS: Okay, and your primary focus has been on Beaufort. Here recently, has your duties or your role expanded?
JAN MALINOWSKI: It has.
MR. WATERS: And what is your current duty right now, or your current --
JAN MALINOWSKI: I'm the Chief Executive Officer.
MR. WATERS: The CEO. Okay, and when did you become the CEO of Palmetto State Bank?
JAN MALINOWSKI: April of last year.
MR. WATERS: April of last year? That would be 2022?
JAN MALINOWSKI: Excuse me, August of last year, I'm sorry.
MR. WATERS: August of last year, of 2022?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: All right. Who was the CEO prior to that?
JAN MALINOWSKI: Russell Laffitte.
MR. WATERS: We'll talk more about that in a bit. Tell me a little bit more about the governance of the bank. Is there a board of directors?
JAN MALINOWSKI: There is.
MR. WATERS: And how many people were on the board of directors?
JAN MALINOWSKI: Currently eight.
MR. WATERS: And is there a executive committee of board of directors and other senior leadership at the bank?
JAN MALINOWSKI: There is.
MR. WATERS: And can you describe that for the jury, please?
JAN MALINOWSKI: Executive committee today consists of our chairman, Becky Laffitte, Norris Laffitte, Liz Malinowski, I'm on the executive committee, and Gray Henderson is on the executive committee.
MR. WATERS: All right, but describe to me how that works. What's the purpose of the executive committee?
JAN MALINOWSKI: The executive committee is charged with typically making the senior decisions, management, upper management decisions that affect the day-to-day operations of the bank.
MR. WATERS: And let me ask you this. As far as giving loans, are there levels of authority for different officials in the bank, and, and does that sort of graduate depending on the amount?
JAN MALINOWSKI: That's correct.
MR. WATERS: Can you explain that to the jury?
JAN MALINOWSKI: Throughout the bank we have a number of loan officers, each of whom is granted a certain level of lending authority which is approved annually by the board of directors. Any loans made -- single loans above their lending authority or above their limits would then go to two executive officers, either myself or Ms. Henderson, to be approved or denied within our level of authority, which is up to a million dollars. And then for any loan -- single loan or relationship from a million to a million and a half, both she and I would have the approval authority. And anything above a million and a half up to $8 million currently goes to the executive committee for approval.
MR. WATERS: With those levels of authority, still if you have large loans with a particular customer or just typical client, are those the kind of things that might be discussed and updated in board meetings and executive committee meetings?
JAN MALINOWSKI: Executive meetings first, and those would be minuted in the executive committee minutes and then elevated to the board, and periodically there would be board discussions, yes.
MR. WATERS: Let's talk a little bit and going back to September of 2021 and before, and I just want to talk a little bit about the bank then. Your primary focus in the bank was where at that point of time?
JAN MALINOWSKI: Beaufort.
MR. WATERS: All right, and was there another sort of hub of focus in the institution?
JAN MALINOWSKI: Well, Hampton is our main office. That's the largest branch among the seven branches.
MR. WATERS: Back in that period of time, September of 2021 and prior, explain to me how those two hubs work and just generally how the bank operated in practice in that regard.
JAN MALINOWSKI: Well, Hampton being the largest office had the most business. It was also the location where Russell Laffitte had his office; his Father, Charlie, had his office; and sister, Gray Henderson, had her office. Largely I was focused on the activities in Beaufort, as I said.
MR. WATERS: Did the bank have kind a decentralized functioning that Hampton kind of did its thing and Beaufort did its thing to some extent?
JAN MALINOWSKI: Yes, sir, to some extent.
MR. WATERS: And was the defendant a customer of the bank?
JAN MALINOWSKI: Yes, he was.
MR. WATERS: Was he more in the Hampton side of things or the Beaufort side of things?
JAN MALINOWSKI: Hampton.
MR. WATERS: Did the defendant have a particular banking relationship with one particular official at the bank or former official?
JAN MALINOWSKI: Yes, Russell Laffitte.
MR. WATERS: Russell Laffitte? Moving into 2021, spring of 2021 or just during 2021, did you as primarily the Beaufort side but also as board member, did you have any particular concern at that time about the defendant, Alex Murdaugh's, the nature of his relationship with the bank?
JAN MALINOWSKI: At that time, no.
MR. WATERS: Didn't have any concern at that time?
JAN MALINOWSKI: No, sir.
MR. WATERS: You were more focused on Beaufort. Is that right?
JAN MALINOWSKI: Correct.
MR. WATERS: And you had no reason at that time to think that anything was going on. Is that correct?
JAN MALINOWSKI: No, sir.
MR. WATERS: At some point in time, did you become aware, obviously, of the murders of Maggie and Paul Murdaugh?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: After that happened, did you personally -- did you have any particular concern about the defendant in any loans he owed to the bank or anything like that?
JAN MALINOWSKI: He had significant loans with the bank. The murders were obviously traumatic and tragic, and the board and executive committee did bring up Mr. Murdaugh's relationship with the bank.
MR. WATERS: I'll grab some exhibits real quick. I'm going to show you what has been marked as Exhibit 355 to your testimony.
MR. WATERS: Let me show it to defense counsel real quick.
(Break in proceedings.)
MR. WATERS: I'm going to see if you recognize this document.
JAN MALINOWSKI: It's the minutes of the board of directors meeting of Palmetto State Bank, Tuesday, July 20, 2021.
MR. WATERS: All right, and who is the secretary for those minutes?
JAN MALINOWSKI: Gray Henderson.
MR. WATERS: Just quickly tell the jury what the minutes of the board of directors minutes are.
JAN MALINOWSKI: The minutes should memorialize the discussions of the board members across any number of topics: loans, operations at the bank, any other topics of interest.
MR. WATERS: Okay, and just look at that real quick. That's on what date?
JAN MALINOWSKI: It's the meeting of July 20, 2021.
MR. WATERS: July 20, 2021. Look through there real quick. Was there any discussion or any mention of any discussion about any loans with the defendant, Alex Murdaugh?
JAN MALINOWSKI: No, sir, there are not.
MR. WATERS: Okay.
MR. WATERS: Your Honor, at this time I would move, I believe without any additional objection, State's 355 into evidence.
MR. GRIFFIN: No other objections.
JUDGE NEWMAN: Okay. It's admitted.
(PSB MINUTES MARKED AS STATE'S EXHIBIT NUMBER 355 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: Moving on from July -- and I just want to be clear. Were you aware in July of 2021 of any additional loan being made to Alex Murdaugh?
JAN MALINOWSKI: No, I was not.
MR. WATERS: Moving on into August of 2021, did you at some point become aware, or was there some event occurring at the bank where any loans to Alex Murdaugh came to the board of directors' attention?
JAN MALINOWSKI: Yes, on August 9th.
MR. WATERS: Go ahead and describe to the jury.
JAN MALINOWSKI: On August 9th a board member, Norris Laffitte, emailed the board and the executive committee asking for a complete accounting of Alex Murdaugh's relationship with Palmetto State Bank.
MR. WATERS: All right, and did any events start to happen as a result of that?
JAN MALINOWSKI: Yes, sir, there were.
MR. WATERS: All right. Let's take, take them in order and let's go nice and slow so I can follow them along. What was the first thing that happened?
JAN MALINOWSKI: A deposit of $400,000 was made to one of Mr. Murdaugh's accounts.
MR. WATERS: A deposit of 400,000. Who caused that deposit to be made?
JAN MALINOWSKI: Russell Laffitte.
MR. WATERS: At that time on August 9th, do you know what the balance was in that particular account that money was in?
JAN MALINOWSKI: It was overdrawn significantly, I believe above $367,000.
MR. WATERS: All right, and I'm going to -- hold on for me real quick.
(Break in proceedings.)
JUDGE NEWMAN: You may proceed.
MR. WATERS: All right. Thank you, Judge.
MR. WATERS: State's 356. I'm going to show this document and see if you recognize this.
JAN MALINOWSKI: This is a copy of the accounts statement, page two of the accounts statement, of account number ending in four digits, 6092, of Richard Alexander Murdaugh.
MR. WATERS: All right, and can you tell me on August 6, 2021, what the balance was in the defendant's account of Palmetto State Bank?
JAN MALINOWSKI: On August 6, 2021, the balance was a negative $347,784.67.
MR. WATERS: Had the bank continued paying expenses for Alex Murdaugh from June 7th to this date to the tune of $347,000 in money he did not have?
JAN MALINOWSKI: Correct.
MR. WATERS: Your Honor, at this time I would move State's Exhibit 356 into evidence.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: It's admitted.
(ACCOUNT STATEMENT MARKED AS STATE'S EXHIBIT NUMBER 356 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: So right here, what date is that?
JAN MALINOWSKI: August 6, 2021.
MR. WATERS: Go up to the top. What's the name on this account?
JAN MALINOWSKI: Richard Alexander Murdaugh.
MR. WATERS: And what's the balance on this account again, please?
JAN MALINOWSKI: A negative $347,784.67.
MR. WATERS: What is that right there?
JAN MALINOWSKI: Overdraft charge.
MR. WATERS: How much is the overdraft charge?
MR. WATERS: $5. Is that typical policy for a bank to pay overdrafts over the course of a month of $347,000?
JAN MALINOWSKI: No, sir.
MR. WATERS: And were you aware of that at the time?
JAN MALINOWSKI: I was not.
MR. WATERS: What's this right here, just this transaction? What's the date on it?
JAN MALINOWSKI: August 9, 2021.
MR. WATERS: And what is that right there?
JAN MALINOWSKI: That's a deposit of $400,000.
MR. WATERS: Is that what you were describing was the first action as a result of one of the board members inquiring about the status of Richard Alexander Murdaugh's account with the bank?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And who caused that deposit to be made?
JAN MALINOWSKI: Russell Laffitte.
MR. WATERS: And what was the source of those funds of $400,000?
JAN MALINOWSKI: It was a debit to our account, or a general ledger account called loans not on system.
MR. WATERS: Where does that mean? Where is that coming from? Did that belong to any entity? Where did it come from?
JAN MALINOWSKI: It came from the bank.
MR. WATERS: From the bank. In that period it time, was there any loan application in existence or any sort of paperwork to justify that $400,000?
MR. WATERS: And after that 400,000 went in, what was the balance of the account?
JAN MALINOWSKI: It had a positive balance of $52,215.32.
MR. WATERS: A little walking around money.
MR. GRIFFIN: Objection, Your Honor.
JUDGE NEWMAN: That's sustained.
MR. WATERS: When that deposit went in, were you aware of a deposit of $400,000 going in at that time?
JAN MALINOWSKI: At that time, no.
MR. WATERS: And you're a board member, correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: All right. That was the first action. What else occurred, if anything, as a result of an inquiry being made about the defendant's finances?
JAN MALINOWSKI: There was a flurry of activity inside the Hampton office to create loan documents.
MR. WATERS: To create loan documents?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: To create loan documents after the fact?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: What, if anything, else happened after that as a result of that inquiry?
JAN MALINOWSKI: As a result of that inquiry, a memo was drafted and submitted to the executive committee outlining the relationship with Alex Murdaugh at that time.
MR. WATERS: All right. Hold on for me one second. I'm going to try to knock out two at once.
(Break in proceedings.)
MR. WATERS: All right. So, these three actions take place. At some point, does this finally come to your attention and to the rest of the board's attention?
JAN MALINOWSKI: It does.
MR. WATERS: And do you recall about what date that was?
JAN MALINOWSKI: I believe it would have been the date of the executive committee on the 12th.
MR. WATERS: All right. I'm going to show you what's been marked as exhibit -- State's Exhibit 354 to your testimony and see if you recognize that.
JAN MALINOWSKI: These are minutes of the executive committee that took place August 12, 2021.
MR. WATERS: All right, and in reviewing those, do they generally accurately reflect what y'all talked about at that executive committee meeting?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And is there any reference or discussion of the defendant, Richard Alexander Murdaugh?
JAN MALINOWSKI: There is.
MR. WATERS: And again, was this the first time that you were aware of the true nature of his financial condition, and the fact of any monies being -- further monies being extended to him from the bank?
JAN MALINOWSKI: This was, again, the formal summary of his banking relationship at that time, yes.
MR. WATERS: Your Honor, at this time I would offer State's 356 into evidence -- 354, my apologies.
MR. GRIFFIN: It is 354, correct?
MR. WATERS: That's correct.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: It's admitted.
(PSB DOCUMENTS MARKED AS STATE'S EXHIBIT NUMBER 354 WERE RECEIVED INTO EVIDENCE.)
MR. WATERS: All right, and the first sentence, what does that say right there?
JAN MALINOWSKI: It says: Gray Henderson distributed a memo to the members outlining the bank's current relationship.
MR. WATERS: Okay, and what is the second sentence right there?
JAN MALINOWSKI: Indebtedness totals 4.2 million consisting of various unsecured and secured notes of co-borrowing and guaranteed loans.
MR. WATERS: So, he owes the bank how much at that point in time?
JAN MALINOWSKI: At that time $4.2 million.
MR. WATERS: And also got that, too, correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: I'm going to show you what's been marked as 365 to your testimony, or to this trial, and see if you recognize that.
JAN MALINOWSKI: This is a copy of the memo that was presented to the executive committee on the 12th of August.
MR. WATERS: All right.
MR. WATERS: And, Your Honor, at this time I would offer State's Exhibit 365 into evidence.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: Admitted.
(PBS MEMO MARKED AS STATE'S EXHIBIT NUMBER 365 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: And this is that memo that you were talking about that was prepared?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And does this kind of set forth some of the debts and obligations that were owed by the defendant at that point in time?
JAN MALINOWSKI: It does.
MR. WATERS: All right, and in that second sentence, what is that total amount?
JAN MALINOWSKI: He currently has total principle balance through family, et cetera, of $4,219,623.
MR. WATERS: All right, and this list right here, what does that reflect?
JAN MALINOWSKI: It lists all of the loan numbers, the principle balances, and the collateral if they were secured.
MR. WATERS: Now, you mentioned that -- we've talk about the memo, we've talked about transfer, and you mentioned that there was some application documentation that started to be created. Is that correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: All right, and you're the CEO now. Is that correct?
JAN MALINOWSKI: That's correct.
MR. WATERS: And you had a chance to go back and to look into what's happened and review these various records. Is that right?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: I'm going to show you what's been marked as Exhibit 362 to your testimony and see if you recognize this document.
JAN MALINOWSKI: This is a copy of a Palmetto State Bank promissory note commercial single advance, loan number 6996048, in the amount of $750,750.
MR. WATERS: And who is the borrower on that particular document?
JAN MALINOWSKI: Richard Alexander Murdaugh.
MR. WATERS: And I'm gong to show you what's been marked as 363 and see if you recognize that.
JAN MALINOWSKI: This is a document that accompanies the notes per the loan package. It's called a business purpose statement.
MR. WATERS: All right.
MR. WATERS: Your Honor, at this time I would move in State's 362 and 363.
MR. GRIFFIN: No additional objection, Your Honor.
JUDGE NEWMAN: Admitted.
(PROMISSORY NOTE MARKED AS STATE'S EXHIBIT NUMBER 362 WAS RECEIVED INTO EVIDENCE.)
(BUSINESS PURPOSE STATEMENT MARKED AS STATE'S EXHIBIT NUMBER 363 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: All right. Let's take a look at this document real quick. This is 362. Looking at the last page, what day is that document signed?
JAN MALINOWSKI: July 15, 2021.
MR. WATERS: All right. Going back and looking at the first page, could this document that was at least supposedly signed on July 15, 2021, could it have even existed on July 15th of 2021?
JAN MALINOWSKI: No, sir.
MR. WATERS: It could not have?
JAN MALINOWSKI: It could not have.
MR. WATERS: And tell the jury why you know that.
JAN MALINOWSKI: Because the loan numbers, the loan numbers generated by one of our software programs related to the loan transactions, the loan numbers are issued sequentially.
MR. WATERS: All right, and so this sequential number --
JAN MALINOWSKI: This was not a July sequence number.
MR. WATERS: All right, and so what month would it have been a --
JAN MALINOWSKI: August.
MR. WATERS: And is that how you know that this doesn't occur until August after that inquiry was made?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: Well, let's talk about July 15, 2021. As things have come to light and you look more into this, did it come to your attention as to why these documents would have been backdated to July of 2021?
JAN MALINOWSKI: Yes, sir, because there was another subsequent transaction.
MR. WATERS: Okay, and what transaction was that generally?
JAN MALINOWSKI: It was a wire transfer.
MR. WATERS: Okay. I'm going to show you what has been marked as State's 358 to your testimony and see if you recognize that.
JAN MALINOWSKI: This is our standard domestic wire request form dated July 15, 2021.
MR. WATERS: Okay.
MR. WATERS: And, Your Honor, at this time I would move to admit State's 358.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: Admitted.
(PSB WIRE REQUEST MARKED AS STATE'S EXHIBIT NUMBER 358 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: Did you know about this wire, when it was sent?
JAN MALINOWSKI: No, sir.
MR. WATERS: Did you know about this wire in August of 2021?
JAN MALINOWSKI: I did after, upon subsequent investigation, yes.
MR. WATERS: And when did you find out about that roughly?
JAN MALINOWSKI: It was in August of 2021.
MR. WATERS: I'll put this up on the screen. What's the date on this wire?
JAN MALINOWSKI: July 15, 2021.
MR. WATERS: And where does this wire go?
JAN MALINOWSKI: It goes to the Wilson Law Group, LLC, IOTA account.
MR. WATERS: IOTA account? Are you familiar if that's a lawyer's trust account?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And what's this page that's attached to it?
JAN MALINOWSKI: It appears to be the wiring instructions, the account name Wilson Law Group, LLC IOTA account. The bank is South State Bank in Bamberg, South Carolina, and South State's routing number. Contact information is Chris@Wilsonlawgroupsc.com, Gayle@Wilsonlawgroupsc.com.
MR. WATERS: And what is the source of funds for that $350,000?
JAN MALINOWSKI: Again, it's the bank internal account, general ledger account loan not on system.
MR. WATERS: Loan not on system. It's bank money?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And at this time, was there any documentation whatsoever justifying $350,000 of bank money being given to the defendant to send to Chris Wilson?
JAN MALINOWSKI: No, sir.
MR. WATERS: When you had a discussion at the board meeting in August of 2021, were there any representations made to you about the purposes for some new loan to Alex Murdaugh?
JAN MALINOWSKI: Yes, there were.
MR. WATERS: And what were you told the purposes were?
JAN MALINOWSKI: Repairs to beach house.
MR. WATERS: Repairs to the beach house?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And who told you that?
JAN MALINOWSKI: Russell Laffitte.
MR. WATERS: Okay, and did he tell you at any time that it was $350,000 to Chris Wilson to put some fees back?
JAN MALINOWSKI: No, sir.
MR. WATERS: Did he tell you that at any time it was $400,000 to cover a negative $347,000 overdraft that the bank had been paying for him since June of 2021?
JAN MALINOWSKI: No, sir.
MR. WATERS: I'm going to show you what has been marked as Exhibit 359 and see if you recognize this.
JAN MALINOWSKI: This is the customer copy of a cashier's check numbered 287933 in the amount of $400,000 dated 8/9/2021.
MR. WATERS: All right, and does it have what appears to be a copy of a sticky note on there?
JAN MALINOWSKI: It does.
MR. WATERS: And whose writing is that? Do you recognize it?
JAN MALINOWSKI: Russell Laffitte's.
MR. WATERS: And there's a reference to Green Swamp stock. Is that correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: Do you know what that is?
JAN MALINOWSKI: It's a hunt club. That's shares of a hunt club, a share of a hunt club.
MR. WATERS: I'm going to show you State's 363 up on the screen. And I showed you this previously, but what is this document?
JAN MALINOWSKI: That's the business purpose statement.
MR. WATERS: All right, and what does it say? Is this for that loan in which the application is being drafted after the fact?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And what does it say the purposes are?
JAN MALINOWSKI: The purpose is investment.
MR. WATERS: All right, and what, again, had you been told as a board member was the purpose of this supposed new loan?
JAN MALINOWSKI: Repairs to the beach house.
MR. WATERS: As you've come to review all of this information, was any of that $750,000 used for any repairs to the beach house?
JAN MALINOWSKI: To my knowledge, no.
MR. WATERS: And when it's $750,000, we're talking about the 350 of the wire to Chris Wilson, correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And then the $400,000 to cover the overdraft and then, then a little bit?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: At some point in time, was there any discussion about collateral for this particular loan?
JAN MALINOWSKI: Yes, there was.
MR. WATERS: All right, and tell me about those discussions. What was your understanding of collateral for these loans?
JAN MALINOWSKI: The collateral was to be a second mortgage on the beach house and the one share of Green Swamp stock.
MR. WATERS: And did -- as things progressed, did any of that change as far as collateral?
JAN MALINOWSKI: We did not put the mortgage on the beach house.
MR. WATERS: And why was that?
JAN MALINOWSKI: Ms. Murdaugh was deceased and she had an ownership interest in the beach house.
MR. WATERS: At some point in time -- we'll get to that. So, ultimately this particular loan, did it have any collateral at all?
JAN MALINOWSKI: Nominally the Green Swamp stock.
MR. WATERS: And why do you say nominally?
JAN MALINOWSKI: It had been cross collateralized to other loans.
MR. WATERS: In your experience as a banker, is it common or usual to provide a new loan to cover an overdraft like was done in this case?
JAN MALINOWSKI: Not to this magnitude, no, sir.
MR. WATERS: I'm going to show you what's been marked as State's 357 and see if you recognize this.
JAN MALINOWSKI: These are minutes of the directors of Palmetto State Bank Tuesday, August 17, 2021.
MR. WATERS: All right.
MR. WATERS: Your Honor, at this time I would offer State's 357 into evidence, I believe, without additional objection.
MR. GRIFFIN: That's correct, no additional objection.
JUDGE NEWMAN: It's admitted.
(PSB MINUTES MARKED AS STATE'S EXHIBIT NUMBER 357 WERE RECEIVED INTO EVIDENCE.)
MR. WATERS: All right. Is there a discussion of the defendant in this particular document?
JAN MALINOWSKI: There is.
MR. WATERS: We've seen one before, which was an executive committee meeting in August, and was this for a subsequent board meeting?
JAN MALINOWSKI: Yes, it was.
MR. WATERS: All right. Let me put that up on the screen. You have a screen right there if you can see that. If you have a problem seeing it, just let me and I'll bring it back to you, okay?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: All right, and this is the discussion as it relates to the defendant right there?
JAN MALINOWSKI: Yes, it does.
MR. WATERS: All right, and real quick, what's the second sentence right there in this particular discussion?
JAN MALINOWSKI: Russell L. Laffitte stated that his intention is to sell the farm.
MR. WATERS: All right, and down here at the bottom, what does that sentence right there say starting with Elizabeth?
JAN MALINOWSKI: Elizabeth Malinowski commented the $750,000 loan did not appear to have been approved by the executive committee.
MR. WATERS: All right, and what is the next sentence?
JAN MALINOWSKI: Russell Laffitte explained that three of the five members approved the loan.
MR. WATERS: All right, and so with three of the five members approving a loan -- were you on the executive committee at that time?
JAN MALINOWSKI: I am. I was, yes.
MR. WATERS: But you were not informed of any of these monies being expended or this after-the-fact documentation or any of it. Is that correct?
JAN MALINOWSKI: No, sir.
MR. WATERS: As some of these things ultimately came to light in the months following, what happened to Russell Laffitte?
JAN MALINOWSKI: He was terminated from the bank.
MR. WATERS: And is that what led to you ultimately becoming CEO?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: In the course of your review as CEO of what had been going on at your institution, did you become privy to information that Russell Laffitte had been converting trust account checks from PMPED made out to Palmetto State Bank?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And that those checks had been converted -- those were client money checks and had been converted for the benefit and for the personal use of the defendant?
JAN MALINOWSKI: Yes.
MR. WATERS: And is that practice improper?
JAN MALINOWSKI: It is.
MR. WATERS: I'm going to show you what has been marked as State's 366 to your testimony and see if you recognize this document.
JAN MALINOWSKI: This document is a printout from our loan accounting system which summarizes the loans outstanding to Mr. Richard Alexander Murdaugh.
MR. WATERS: As of a particular day?
JAN MALINOWSKI: As of June 7, 2021.
MR. WATERS: All right.
MR. WATERS: Your Honor, at this time I would move State's 366 into evidence.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: It's admitted.
(PSB NOTE MARKED AS STATE'S EXHIBIT NUMBER 366 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: All right. Let's take a look at it. Can you see that all right?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: All right. There's certain numbers that are highlighted here. Is that the balance as of that particular date?
JAN MALINOWSKI: It's the principle balance, yes, sir.
MR. WATERS: All right, and so that number right there is what?
JAN MALINOWSKI: $104,119.80.
MR. WATERS: And the balance right there is what?
JAN MALINOWSKI: $806,666.26.
MR. WATERS: And the balance right there is what?
JAN MALINOWSKI: $195,171.64.
MR. WATERS: And that balance right there, what is that?
JAN MALINOWSKI: $999,650.94.
MR. WATERS: And then finally this?
JAN MALINOWSKI: $91,368.90,
MR. WATERS: This particular one right there, is that a line of credit?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And how much -- what's the limit on the line of credit? A line of credit is kind of like a credit card. It's got a limit on it, right?
JAN MALINOWSKI: That's correct.
MR. WATERS: What's the line of credit? How much was it for?
JAN MALINOWSKI: $1 million.
MR. WATERS: And what was the balance on it?
JAN MALINOWSKI: $999,650.94.
MR. WATERS: Pretty much maxed out.
JAN MALINOWSKI: Yes, sir.
MR. WATERS: Going back to State's 365. We've got this one right here, and what was the balance on that one with this memo that was prepared around August of 2021?
JAN MALINOWSKI: That loan balance was $599,400.
MR. WATERS: And was that also a line of credit as well?
JAN MALINOWSKI: It was.
MR. WATERS: And what was the limit on that line of credit?
JAN MALINOWSKI: I believe $600,000.
MR. WATERS: So, that one was pretty much maxed out, too, correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: Not listed on State's 366 are two that are on this memo. One says Zero United and one said Red Beard. Are you familiar with what those are?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And are those business entities?
JAN MALINOWSKI: They are.
MR. WATERS: And do you know who those were associated with?
JAN MALINOWSKI: Mr. Murdaugh was a partner member of the LLC.
MR. WATERS: All right, and had those two loans been charged off?
JAN MALINOWSKI: They had been.
MR. WATERS: And to your understanding, those entities owned real property?
JAN MALINOWSKI: Yes, in Berkeley County.
MR. WATERS: All right. When you say charged off, what does that mean? Explain that very quickly to the jury.
JAN MALINOWSKI: In banking if a loan become uncollectible for whatever reason, the borrower suffers financial difficulties, other issues, the bank will at some point in time make a determination whether to take it off its books and subsequently charge it off.
MR. WATERS: Okay. Did the bank foreclose on the properties under those particular two entities?
JAN MALINOWSKI: We did not.
MR. WATERS: All right, and so it takes it off the books so it stops accruing interest and late charges and all that kind of stuff, right?
JAN MALINOWSKI: Actively, yes, sir.
MR. WATERS: Actively at least, correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And did the defendant, was he still, though, expected and required to keep paying on those particular loans?
JAN MALINOWSKI: It didn't absolve him of his obligation, but he did -- and he periodically made payments.
MR. WATERS: Periodically made payments on those loans?
JAN MALINOWSKI: Yes.
MR. WATERS: If the defendant had tried to sell those properties or something like that, what, if anything, would the bank have been entitled to in the event that was attempted?
JAN MALINOWSKI: We would have been entitled to the outstanding principle balance at the time, plus lost interest and any late fees and charges.
MR. WATERS: All right. So, that would have been applied against any sale price before those things could be -- that property could be sold, correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And it would be somewhat higher than the numbers on that -- on this memo. Is that right?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: One of things on here is this particular loan right here. What is that for?
JAN MALINOWSKI: A house in Edisto.
MR. WATERS: And in April of 2021, was there any sort of thing going on with that particular loan that needed to be addressed?
JAN MALINOWSKI: The loan had matured.
MR. WATERS: It had matured? Explain to the jury what that means.
JAN MALINOWSKI: At the time the balance of the loan, the note itself had reached its maturity date and the borrower would be required to -- the bank and the borrower would be required to come together and determine what they wanted to do, either renew it, extend it, whatever.
MR. WATERS: All right. It had not been paid off, correct?
JAN MALINOWSKI: It had not been paid off.
MR. WATERS: Since it matured, it either had to be renewed or paid off, correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: And because of that need for a renewal, had an appraisal been sought in April of 2021?
JAN MALINOWSKI: Yes, it's my understanding.
MR. WATERS: All right, and I need to show you an exhibit.
MR. WATERS: Let me show it to defense counsel real quick.
(Break in proceedings.)
MR. WATERS: Let me show you what's been marked as Exhibit 364 to this trial and see if you recognize this.
JAN MALINOWSKI: The top of the page is an email from Chastity Malphrus to Charles Laffitte, III, who is the bank's appraisal officer, regarding an appraisal request for 3606 Big Bay Drive, Edisto.
MR. WATERS: Is that the Edisto house we're talking about?
JAN MALINOWSKI: Yes, sir, it is.
MR. WATERS: All right, and is this the -- and that's the appraisal request form underneath it?
JAN MALINOWSKI: It is.
MR. WATERS: Okay. As that relates to the renewal of the existing loan on Edisto. Is that correct?
JAN MALINOWSKI: That is correct.
MR. WATERS: Did this appraisal have anything to do with this $750,000 that you've been telling the jury about?
JAN MALINOWSKI: No, sir.
MR. WATERS: This was already in existence because of an existing loan. Is that correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: All right.
MR. WATERS: Your Honor, at this time I would offer State's 364 into evidence.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: It's admitted.
(EMAIL MARKED AS STATE'S EXHIBIT NUMBER 364 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: Almost done. Real quick. One I forgot is State's 360. I'll show this to you real quick and then we'll get to the beginning of the end. Can you tell me what that is?
JAN MALINOWSKI: Yes, sir. I'm sorry. It's the checking deposit ticket for -- of a $400,000 deposit going into an account, last four digits 6092, in the name of Alex Murdaugh. Underneath that is the cashier's check itself which accompanied the deposit ticket, cashier's check number 287933 in the amount of $400,000 dated August 9, 2021.
MR. WATERS: Your Honor, at this time I would offer State's 360.
MR. GRIFFIN: No additional objection, Your Honor.
JUDGE NEWMAN: Admitted.
(COPY OF CHECK MARKED AS STATE'S EXHIBIT NUMBER 360 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: All right, and this is that $400,000 to cover the big overdraft. Is that right?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: All right. I'm going to show you one last series of documents here one at a time. I show you first what's been marked -- it has not been marked. I show you what's been marked as State's 367. And is that a statement balance for an account in the name of Alex Murdaugh?
JAN MALINOWSKI: It is. It's Alex Murdaugh farm account, account number 1646.
MR. WATERS: All right, and on June the 7th of 2021, can you tell me the balance in that account?
JAN MALINOWSKI: The balance in the account is a negative $2,458.23.
MR. WATERS: Okay.
MR. WATERS: Your Honor, at this time I would move to admits State's 367.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: Admitted.
(PSB STATEMENT MARKED AS STATE'S EXHIBIT NUMBER 367 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: I'm going to show you what's been marked as 368 and see if you recognize that document.
JAN MALINOWSKI: It's a copy of an account statement for account number 6092 in the name of Richard Alexander Murdaugh.
MR. WATERS: All right. Can you tell me what the account balance is on June 7th of 2021?
JAN MALINOWSKI: On June 7th the balance in the account is $2,185.23.
MR. WATERS: All right.
MR. WATERS: Your Honor, at this time I would move to admits State's 368.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: Admitted.
(PSB STATEMENT MARKED AS STATE'S EXHIBIT NUMBER 368 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: All right. I'm going to show you what's been marked as State's 269 -- 369, excuse me, and see if you recognize, or if you can tell me what the balance of that document is.
JAN MALINOWSKI: This is the account statement for a health savings account, last four digits 3094, also in the name of Richard Alexander Murdaugh.
MR. WATERS: All right, and could you tell me what the balance of that was on June 7th of 2021?
JAN MALINOWSKI: June 7th it would be $7,540.61.
MR. WATERS: And that's a health savings account?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: Can that be used for any expenditures or is that limited -- is that a special type of account that is limited to medical expenditures?
JAN MALINOWSKI: It's a special account generally limited to the medical expenditures.
MR. WATERS: Your Honor, at this time I would move State's 369 into evidence.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: It's admitted.
(PSB STATEMENT MARKED AS STATE'S EXHIBIT NUMBER 369 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: I'll show you what's been marked as State's 370 and see if you can tell me what that particular document is.
JAN MALINOWSKI: Another account -- copy of an account statement. This one is the last four digits 6649 in the name of Alex Murdaugh.
MR. WATERS: All right, and can you tell me what the balance is on June 7, 2021?
JAN MALINOWSKI: The balance on June 7, 2021, is $62,115.06.
MR. WATERS: And then finally I've got a set of documents.
MR. WATERS: And, Your Honor, real quick I would move State's 370 into evidence.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: Admitted.
(PSB STATEMENT MARKED AS STATE'S EXHIBIT NUMBER 370 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: All right, last one. Can you tell me what that particular document is?
JAN MALINOWSKI: It's a copy of an account statement number 5109 in the name of Margaret Maggie Murdaugh.
MR. WATERS: All right, and just real quick for the record I'm having you look at State's 371. All right. If you could take a look at it again.
JAN MALINOWSKI: Same account number, Margaret Maggie Murdaugh.
MR. WATERS: All right, and just go back. Can you tell me what the account balance is in that particular account at least as of -- go back to the first one, of June 24th of 2021?
JAN MALINOWSKI: June 24, 2021, the balance was $23.97.
MR. WATERS: Your Honor, at this time I would move State's 371 into evidence.
MR. GRIFFIN: No additional objection.
JUDGE NEWMAN: It's admitted.
(PSB STATEMENT MARKED AS STATE'S EXHIBIT NUMBER 371 WAS RECEIVED INTO EVIDENCE.)
MR. WATERS: All right. I'm almost done. Mr. Malinowski, if at any point in time, any point in time, if the bank over the years at any point in time had become aware that Alex Murdaugh was having a bank official take client trust money checks and convert them into cashier's checks and other transactions for his own personal use, what would have happened?
JAN MALINOWSKI: Certainly would have significant conversation in the bank, and we would have asked the bank official to stop doing that.
MR. WATERS: All right, and what would have happened if you uncovered that the defendant, Alex Murdaugh, was stealing client funds through that method?
JAN MALINOWSKI: That would have certainly affected his borrowing relationship with the bank and any other relationship he had with the bank.
MR. WATERS: If you found out the defendant was stealing, would you loan another dime to him?
JAN MALINOWSKI: No, sir.
MR. WATERS: If you found out that the defendant had created a fake business account in the name of a legitimate entity and was routing and stealing client money through that account and converting it to his own personal use at any point in time, what would have happened with his relationship at the bank?
JAN MALINOWSKI: It would have ceased.
MR. WATERS: Would the bank have loaned him anymore money?
JAN MALINOWSKI: No, sir.
MR. WATERS: If the bank found out that the defendant had been forced to resign or been fired from his job, what would have happened with his banking relationship? Would the bank have loaned him any more money after that?
JAN MALINOWSKI: No, sir.
MR. WATERS: If the bank had found out at any point in time that he had been disbarred, what would have happened to that banking relationship with that defendant?
JAN MALINOWSKI: It would have ceased.
MR. WATERS: Look at Exhibit 368. What account number is that? What's the last four digits of that account number?
JAN MALINOWSKI: 6092.
MR. WATERS: On June 7th, what is the balance?
JAN MALINOWSKI: $2,185.23.
MR. WATERS: Looking at Exhibit 356, what's the account number?
JAN MALINOWSKI: 6092.
MR. WATERS: And by the time that applied for deposit comes in, what's the balance on August 6, 2021?
JAN MALINOWSKI: On August 6, 2021, the balance is a negative $347,784.67.
MR. WATERS: Hold on for me one second.
(Break in proceedings.)
MR. WATERS: Thank you, Mr. Malinowski. Please answer any questions that the defense may have.
JUDGE NEWMAN: Ladies and gentlemen, I'll have you go to the jury room for a break. Please do not discuss the case.
(The jury left the courtroom.)
MR. BARBER: Your Honor, we have a matter -- Attorney Tinsley will be the next witness and we need to have a matter heard outside of the jury's presence.
JUDGE NEWMAN: All right. Yes, sir?
MR. BARBER: May it please the Court? This is something new that has come up, Your Honor. I'm sure Your Honor recalls the testimony of Shelley Smith this Monday. Her testimony was, let's say, somewhat valuable. We've discovered late last night that a GoFundMe page was set up for Ms. Smith soliciting donations. Until the wording was changed during the testimony of the last witness, it read that: My mother was a caretaker for Alex Murdaugh's mom; she recently had to testify against him. And it goes on to say: I want to reward her for her bravery and honesty. The very first donation made on this GoFundMe page, which was made shortly after it first went up last night, was made by Attorney Mark Tinsley who paid her $1,000, presumably following the description of this in consideration of her testimony. And, Your Honor, I have it if you want printouts of the screen shot showing that. Shortly after Mark Tinsley's name actually appeared as the donor for 1,000, he removed his name and it now appears as anonymous. But I am told the Attorney General has confirmed Mr. Tinsley, that he admits he did make this payment to the witness in the middle of the trial, who is still under subpoena.
JUDGE NEWMAN: And therefore?
MR. BARBER: Your Honor, and therefore the defense would move to exclude his testimony and --
JUDGE NEWMAN: On what basis?
MR. BARBER: Your Honor, the legal standard here is difficult to find. I cannot, searching WestLaw, find a single case in which a prosecutor has put -- tries to put to the jury a lawyer who has already testified he has a direct financial interest in the outcome of this case, who is also making monetary payments to prosecution witnesses during the trial. Your Honor, I believe that this is a question of first impression, and because it's a question of first -- I understand that the facts here in this case are disturbing, but because it's a question of first impression, I respectfully urge the Court to keep in mind the aphorism that bad facts make bad law. The prosecutor to my knowledge and to the Westlaw's knowledge has never before done this.
JUDGE NEWMAN: What's improper about what he did?
MR. BARBER: About what Mr. Tinsley did?
JUDGE NEWMAN: Yes.
MR. BARBER: He made a financial payment to a witness in the middle of a trial that he has a financial interest in the outcome of. He has testified. He was under subpoena, and he's still under subpoena. He made $1,000 payment as a reward for her honesty, testifying in a matter that he has testified that he has a direct financial interest in.
JUDGE NEWMAN: Well, that would be good fodder for cross-examination.
MR. BARBER: Your Honor, I respect the Court's ruling.
JUDGE NEWMAN: I'm not going to strike his testimony. It may be good fodder in cross-examination.
MR. BARBER: Yes, sir. Thank you, Your Honor. There is one other issue. Given the testimony in the in-camera proceedings, we would ask that he be precluded from offering testimony about focus groups and the verdict for the Beach matter and speculation about fixing a jury in Hampton County. This matter is going to go to motive. For the purpose that his testimony is being offered for, it would be prejudicial.
JUDGE NEWMAN: Well, I'm loath to attempt to screen testimony in advance. Lawyers ask questions, lawyers object, and judges rule. So, you've sounded a warning to the State that you'll object to that testimony, and if such a question is asked and an objection is made, then I'll rule on the objection.
MR. BARBER: Yes, sir.
JUDGE NEWMAN: Anything else?
MR. WATERS: Nothing from the State, Your Honor.
JUDGE NEWMAN: Bring the jury.
(The jury returned to the courtroom.)
COURT BAILIFF: The jury is present, sir.
JUDGE NEWMAN: You may cross-examine.
MR. GRIFFIN: Please the Court?
JUDGE NEWMAN: Yes, sir.
CROSS-EXAMINATION
BY MR. GRIFFIN:
MR. GRIFFIN: Good afternoon, Mr. Malinowski.
JAN MALINOWSKI: Mr. Griffin.
MR. GRIFFIN: The $750,000 loan that was made in July of 2021, that was approved by three members of the executive committee, was it not?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: And the three members that approved that loan were Mr. Charlie Laffitte, Mr. Russell Laffitte, and Ms. Gray Henderson. Is that correct?
JAN MALINOWSKI: That's correct.
MR. GRIFFIN: And Mr. Charlie Laffitte was the chairman of the board of the Palmetto State Bank at the time. Is that right?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: He's the largest shareholder of Palmetto State Bank?
JAN MALINOWSKI: Him individually? No.
MR. GRIFFIN: He wasn't the largest individual --
MR. GRIFFIN: Did he own 30 percent of the bank?
JAN MALINOWSKI: Not individually, no.
MR. GRIFFIN: Okay. The -- and then his son was Russell Laffitte?
JAN MALINOWSKI: That's correct.
MR. GRIFFIN: And his daughter was Gray Henderson?
JAN MALINOWSKI: Correct.
MR. GRIFFIN: And it was his position that if Alex Murdaugh wanted a loan from Palmetto State Bank, that the bank would loan him the money. Is that correct?
JAN MALINOWSKI: That was his opinion.
MR. GRIFFIN: And Alex Murdaugh was a member of PMPED Law Firm -- you're aware of that -- at the time?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: And PMPED Law Firm was one of the most -- I guess, largest customers of the bank.
JAN MALINOWSKI: It was a large customer of the bank.
MR. GRIFFIN: And the partners in the firm all had banking relationships with the bank, correct?
JAN MALINOWSKI: I'm aware that many did, yes.
MR. GRIFFIN: Okay, and often times when members of the law firm had clients who needed to borrow money before they got recoveries in their case, the partners from the firm would send them to the bank and the bank would loan money on future recovery. Are you aware of that?
JAN MALINOWSKI: Yes, I am.
MR. GRIFFIN: And so the firm was good business for the bank.
JAN MALINOWSKI: It was a good customer.
MR. GRIFFIN: And the bank, in turn, was providing good services to the members of the firm.
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: And if it meant, you know, getting a loan in a rush without having all of the I's dotted and the T's crossed, that would happen. Isn't that right?
JAN MALINOWSKI: Not to that magnitude, no.
MR. GRIFFIN: Well, it certainly happened with Mr. Alex Murdaugh in July of 2021, right?
JAN MALINOWSKI: I believe in August of 2021.
MR. GRIFFIN: Well, the loan was made and the money was provided to Mr. Alex Murdaugh in July of 2021, right?
JAN MALINOWSKI: 350,000 was provided with that wire transfer I subsequently have knowledge of.
MR. GRIFFIN: And the documentation was essentially loan not on the books or -- what's the acronym?
JAN MALINOWSKI: Loans Not On System, LNOS.
MR. GRIFFIN: Right. But it's a loan, it's just not on system.
JAN MALINOWSKI: It's an advance from a general ledger account.
MR. GRIFFIN: To be documented as a loan down the road.
JAN MALINOWSKI: One would hope, yes, sir.
MR. GRIFFIN: And that's what happened here.
JAN MALINOWSKI: Eventually.
MR. GRIFFIN: In August.
JAN MALINOWSKI: In August.
MR. GRIFFIN: Now, Alex didn't work for the bank, did he?
JAN MALINOWSKI: No, sir.
MR. GRIFFIN: He didn't represent the bank, did he?
JAN MALINOWSKI: To my knowledge, no.
MR. GRIFFIN: He was just a good customer of the bank. Is that right?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: And the bank treated him like a good customer because that was in the bank's interest.
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: Now, you said something on direct that I want to follow up on, and my notes say that after the tragic murder of Maggie and Paul, that the bank undertook a loan review of Alex's loans. Is that right?
JAN MALINOWSKI: In response to the August 9th email, yes, sir.
MR. GRIFFIN: Well, the -- and the August 9th email was triggered because of Maggie and Paul's murders?
JAN MALINOWSKI: That and other information, yes, sir.
MR. GRIFFIN: And what other information?
JAN MALINOWSKI: I think Mr. Norris Laffitte had asked some questions or had conversations with individuals and wanted to know the full accounting of the bank's relationship.
MR. GRIFFIN: Okay, and one of the factors that Mr. Norris Laffitte included was he had just lost his wife and son and let's take a look at it, at his standing with the bank, loans outstanding, et cetera.
JAN MALINOWSKI: I think that's a fair statement, yes, sir.
MR. GRIFFIN: Okay. Up until June 7, 2021, the bank was not examining Alex's loans, were they?
JAN MALINOWSKI: We were not scrutinizing them, no, sir.
MR. GRIFFIN: Yeah. He did have a -- he and Maggie had a loan review from the bank, whether they knew it or not, back in July 10th of 2020, correct?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: I'm going to show you Defendant's Exhibit 91 and ask if this is the loan review that was done documenting to the executive committee on July 10th, 2020.
JAN MALINOWSKI: Yes. This is a copy of a loan review prepared by Gray Henderson of the relationship summary of Alex Murdaugh and Maggie Murdaugh.
MR. GRIFFIN: Thank you, and what's the date?
JAN MALINOWSKI: 2020.
MR. GRIFFIN: July of 2020.
MR. GRIFFIN: Your Honor, I would move Exhibit -- Defendant's Exhibit 91 into evidence at this time.
MR. WATERS: No objection, Your Honor.
JUDGE NEWMAN: It's admitted.
(LOAN REVIEW DOCUMENT MARKED AS DEFENDANT'S EXHIBIT NUMBER 91 WAS RECEIVED INTO EVIDENCE.)
MR. GRIFFIN: Let's put the front page up there. So -- Doug, go down so we can see the -- there you go.
MR. GRIFFIN: So, to the executive committee on July 10th of 2020, who was on the executive committee with the bank?
JAN MALINOWSKI: At that time Charlie Laffitte, Russell Laffitte, Gray Henderson, myself. I believe Scott Swain was on it at that time.
MR. GRIFFIN: And it's a five member executive committee?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: And I think you mentioned earlier that the -- did it take the majority of the committee to approve loans over a certain amount?
JAN MALINOWSKI: Sitting in a meeting, yes, sir.
MR. GRIFFIN: Sir?
JAN MALINOWSKI: In a meeting, yes, sir.
MR. GRIFFIN: Okay. The -- and Gray Henderson is preparing this loan review for Alex Murdaugh, right?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: And it says: Richard Alexander Alex Murdaugh is a lifetime resident of Hampton County. He and his wife, Margaret B., Maggie, recently sold their home in Hampton and moved their permanent residence to their farm in Islandton. Alex is a respected partner with Peters, Murdaugh, Parker, Elzroth, and Detrick Law Firm. They are currently involved in a wrongful death suit involving their youngest son, Paul, in a boating accident. The civil case is still pending. And so that was the background on this?
JAN MALINOWSKI: That was a general summary of the current situation.
MR. GRIFFIN: And then they reviewed financials related to their tax returns and whatnot. Is that correct?
JAN MALINOWSKI: She's just stating in there that -- what financial information we have on file.
MR. GRIFFIN: Okay, and then you go through each outstanding loan. Is that right?
JAN MALINOWSKI: It's a summary of the loan, yes, sir.
MR. GRIFFIN: Okay, and the first loan is -- can you tell us what that is? Williams Island on St. Helena?
JAN MALINOWSKI: We had a loan. I believe that that loan was a joint loan with a gentleman by the name of Barrett Boulware secured by two or three little islands off of St. Helena.
MR. GRIFFIN: And that loan is in good standing. It says: All payments --
JAN MALINOWSKI: All payments made as agreed. Yes, sir.
MR. GRIFFIN: And now the next loan is a loan -- that's the Edisto beach house. Is that right?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: And here it says that the home appraised for 440 in February of 2016, and the current balance on the note was $206,000. That's in July of 2020. Is that right?
JAN MALINOWSKI: That's what it says, yes, sir.
MR. GRIFFIN: And it says they've been thirty days late three times. I think that's what it says.
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: I guess if you go over thirty days your loan payment, that's a strike against you, isn't it?
JAN MALINOWSKI: It gets noticed.
MR. GRIFFIN: It gets -- yeah, it gets noticed. But that house at Edisto, the bank had a mortgage on it dating back at least for some time, right?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: And you know it recently sold, that house?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: And do you know the sale price?
JAN MALINOWSKI: I think it was just below a million dollars.
MR. GRIFFIN: Okay. So, the bank is pretty good -- in a pretty good position here in July of 2020 with $200,000 on what sold a couple of years later for a million dollars, right?
JAN MALINOWSKI: Many years later, but yes.
MR. GRIFFIN: How many years later?
JAN MALINOWSKI: Well, I think it occurred in 2022, and this is in 2020.
MR. GRIFFIN: Okay. Two years then? Would you go with that?
JAN MALINOWSKI: Yeah, I'll go with that.
MR. GRIFFIN: Is two many?
JAN MALINOWSKI: In the real estate market, two years can be a long time.
MR. GRIFFIN: All right, and then the next loan is a first mortgage on --
MR. GRIFFIN: -- I don't know what you're doing there, Doug, but --
MR. GRIFFIN: -- on 856 acres, and a second mortgage on 914 acres. That's the Moselle property. Is that right?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: And what's the outstanding balance of that loan?
JAN MALINOWSKI: $719,769.16.
MR. GRIFFIN: And what kind of value do you have there?
JAN MALINOWSKI: Good value in it. The appraisal is $3.3 million.
MR. GRIFFIN: Now, you know there's a contract on that property today?
JAN MALINOWSKI: I understand there is, yes.
MR. GRIFFIN: Do you know what it is?
JAN MALINOWSKI: No, sir, I don't.
MR. GRIFFIN: Do you know it's more than 3.3?
JAN MALINOWSKI: I don't know that.
MR. GRIFFIN: Okay. The bank still has a mortgage on it?
JAN MALINOWSKI: We do.
MR. GRIFFIN: Okay.
MR. GRIFFIN: Can you turn the page, Doug? That is the last one on there?
MR. GRIFFIN: And here is another loan, and I guess that's part of the same -- it's another -- that's another tract, Moselle, with additional -- or is that the same loan? Are we talking about a new loan here?
JAN MALINOWSKI: I believe we are, yes.
MR. GRIFFIN: Okay, and what is this?
JAN MALINOWSKI: This balance is $888,527.08.
MR. GRIFFIN: Okay, and what's the value we have on this?
JAN MALINOWSKI: I assume it's the Moselle 3.3 million on the preceding loan.
MR. GRIFFIN: Okay.
JAN MALINOWSKI: Two mortgages on a single property, or the acreage.
MR. GRIFFIN: And then the conclusion here, the summary is: Alex and Maggie Murdaugh are longtime customers of Palmetto State Bank. They've had some late payments, but in my opinion those are mainly due to Alex being hard to reach and set appointments to sign the paperwork. The majority of his payments are set up on an annual basis because the law firm makes their distributions in December. Now, let me ask you about that. Were you aware that a lot of the partners at the law firm who owe money to Palmetto State Bank just pay once a year because that's really when the bulk of their income is generated, or received?
JAN MALINOWSKI: By my understanding that's correct.
MR. GRIFFIN: And so this was not special just to Alex, but it's not -- other partners at the firm had the same payment plan.
JAN MALINOWSKI: You're setting up the repayment to coincide with the receipt of their income, or the bulk of their income.
MR. GRIFFIN: Sure. And it says: The Murdaughs have always paid their loans to the bank, and I do not see that changing. And it says: Depending on the outcome of the pending lawsuit, they may have to liquidate some assets, but our loans are more than sufficiently collateralized. Meaning you've got plenty of security. Is that right?
JAN MALINOWSKI: In 2020, yes, sir.
MR. GRIFFIN: Alex and Maggie have, to your knowledge, never been turned down for a loan at Palmetto State Bank.
JAN MALINOWSKI: To my knowledge, they have not.
MR. GRIFFIN: Now, there were some loans that were, I guess, written off, as you said, or charged off, where Alex was a member of a partnership, LLC, some sort of structure where there were other partners involved, and that those loans weren't in default. Is that right?
JAN MALINOWSKI: Yes, sir.
MR. GRIFFIN: But Alex kept paying on those notes, did he not?
JAN MALINOWSKI: Periodically he would make payments.
MR. GRIFFIN: Did any of the other partners in Red Beard or United, were they making payments?
JAN MALINOWSKI: To my knowledge, no.
MR. GRIFFIN: To your knowledge, it was only Alex that was making the payments?
JAN MALINOWSKI: Yes.
MR. GRIFFIN: To your knowledge, was there any reason in the world for Alex to believe that in June of 2021, if he needed additional money from Palmetto State Bank, that he couldn't just go down there and talk to Russell Laffitte or Charlie Laffitte and ask for a loan?
JAN MALINOWSKI: In June of 2021?
MR. GRIFFIN: Yes, sir.
JAN MALINOWSKI: I don't see any reason why he couldn't have that conversation with Charlie and Russell.
MR. GRIFFIN: And he, to your knowledge, was never put on any notice that your business is not welcome here at Palmetto State Bank in June of 2021. Is that right?
JAN MALINOWSKI: In June of 2021, that is correct.
MR. GRIFFIN: In June of 2021, the bank is fully collateralized on the outstanding notes.
JAN MALINOWSKI: With the exception of the one where he was a co-borrower, I believe, with his father. I think that was an unsecured loan.
MR. GRIFFIN: And his father being Randolph Murdaugh?
JAN MALINOWSKI: The third, yes.
MR. GRIFFIN: The third, yes, sir.
MR. GRIFFIN: One second, Your Honor.
(Break in proceedings.)
MR. GRIFFIN: I have no further questions.
JUDGE NEWMAN: Redirect?
MR. WATERS: Very briefly, Your Honor.
REDIRECT EXAMINATION
BY MR. WATERS:
MR. WATERS: You were asked about whether Alex made some year-end payments on some of those charged-off loans, correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: In your review, was some of that money that was used to make those payments ultimately converted money from client funds?
JAN MALINOWSKI: I believe so, yes.
MR. WATERS: You were asked whether or not in June of 2021 whether Alex could have talked to Charlie Laffitte or Russell Laffitte about another loan. Is that right?
JAN MALINOWSKI: In June of 2021, yes.
MR. WATERS: In June of 2021. At that point in time, had it come out that he had been stealing client funds for years?
JAN MALINOWSKI: No, sir.
MR. WATERS: Had it come out that he had been disbarred?
JAN MALINOWSKI: No, sir.
MR. WATERS: Had it come out that he been diverting fees from his law firm?
JAN MALINOWSKI: No, sir.
MR. WATERS: Had it come out that he had been forced to resign from his law firm?
JAN MALINOWSKI: No, sir.
MR. WATERS: If any of those things had come out, would the bank continue to have loaned him money?
JAN MALINOWSKI: No, sir.
MR. WATERS: Mr. Griffin asked you if Alex had been a good customer, correct?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: When all of this crashed and burned, was the bank left holding the bag for all of these uncollected loans?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: Including the $750,000?
JAN MALINOWSKI: Yes, sir.
MR. WATERS: Nothing further. Thank you.
RECROSS-EXAMINATION
BY MR. GRIFFIN:
MR. GRIFFIN: Mr. Malinowski, the bank had mortgages on the properties that we just went over, did it not?
JAN MALINOWSKI: They did.
MR. GRIFFIN: And those mortgages didn't disappear when Alex Murdaugh -- when all of this came to light, did they?
JAN MALINOWSKI: No, sir.
MR. GRIFFIN: All right. Thank you.
JUDGE NEWMAN: You may step down.
(The witness exited the stand.)