Florence bank now named in lawsuit involving alleged Ponzi scheme

First Reliance Bank is now named in a class-action lawsuit against late Florence attorney John Schurlknight.

Last month, 22 of Schurlnight's former clients sued 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.

According to the lawsuit, First Reliance Bank had actual knowledge that Shurlknight and Rivers, P.A. was defrauding its clients out of millions of dollars.

The suit says the bank did nothing to stop the firm and acted in bad faith, assisted, aided and abetted the firm's theft, breaches of fiduciary duty, and fraud.

First Reliance Bank's CEO Rick Saunders says they have yet to be served with a copy of the lawsuit.

He says based on what he read in the Morning News concerning the lawsuit, the allegations levied against his bank are not true, and they will certainly defend themselves against the allegations.

The lawsuit says adding the bank to the lawsuit is 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 Bernie 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.

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.

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