Late attorney's family sued by his former clients over alleged Ponzi scheme

22 clients of late Florence attorney John Schurlknight have filed a class-action lawsuit against his estate saying he stole between $6 to $10 million from them.

Schurlknight died in November 2012. He was with Schurlknight and Rivers Law Firm in Florence for many years.

The firm is no longer in operation, and Schurlknight's partner is under suspension by the South Carolina Supreme Court.

The suit names Schurlknight's wife, two college-aged children, and the Citizens Bank of Florence.

Each family member received, directly or indirectly, huge sums of money that were flatly stolen from clients of the firm and used to purchase expensive cars, attend private schools, live in expensive homes and otherwise used to support a lifestyle the Schurlknight family could not afford, according to the lawsuit.

It says the Schurlknight family lived such a life and engaged in such a lifestyle while John Schurlknight's clients were dying, suffering from brain damage, healing from life changing injuries, dealing with unemployment, avoiding debt collectors from medical providers and suffering from the circumstances no one should be forced to endure.

The lawsuit says it's the next step in a continuing effort to recover money and property stolen as part of the massive Ponzi scheme perpetrated by Schurlknight from 2007 to 2012.

The scheme was similar to the one operated by Bernnie Madoff , the lawsuit says, with the exception that Madoff stole client investment money, while Schurlknight stole clients' personal injury recoveries or settlement money.

Schurlknight would settle or otherwise resolve clients' personal injury claims without a client's knowledge, forge the client's name to a settlement check and steal 100% of the proceeds, the suit says.

According to the lawsuit, he would then lie to the clients and tell them their cases were still ongoing.

Richard York of Hamlet, North Carolina says Schurlknight settled his personal injury case for $400,000 in 2010, and York had no knowledge of it. He says he never received one dime of the money.

"When I called him, he would always tell me he had to go to court. He was waiting on the insurance company to make a court date, but we never did get a court date," said York.

York is not part of the class-action suit, but his case is outlined in the suit.

York's hired an attorney to handle his case and says he's hoping something will happen and soon, so that he can collect his settlement money.

York added, "I can do a whole lot with it now. I can pay my house off, buy me a car, I can do a whole lot of things with it."

The suit adds that weeks prior to Schurlknight's death, he began to systematically change the owners and beneficiary designations on his life insurance policies.

It says less than a month before he took his own life, Schurlknight transferred ownership of one insurance policy from his law firm to himself individually.

The suit says he also changed the beneficiary of the policy from his wife to his son.

The plantiffs argue the Ponzi scheme massively enriched the Schurlknight family and will continue to enrich the family unless the court takes action.

They're requesting a jury trial.

The Schurlknight family released this statement to WPDE NewsChannel 15 by way of their attorney Art Justice with the Turner Padget Law Firm in Florence.

"No one is more shocked and disappointed than John Schurlknight's widow and college children over the allegations of his misconduct. They were not involved in the operation of his law practice and were unaware of his specific sources of income. They continue to grieve the loss of their husband and father. They have done nothing wrong and are simply trying to survive and cope with these series of tragedies and prefer to do so privately," said Art Justice.

Schurlknight's family has 30 days to respond to the lawsuit.