FLORENCE, SC — Florence attorney William J. Rivers III pleaded not guilty to fraud charges at a federal arraignment Tuesday morning. Rivers was indicted on three charges of mail fraud and violating federals laws on swindling last month.
Court documents allege that between October 2006 and November 2012, Rivers and his partner, the late John L. Schurlknight, had a scheme in which they would agree to represent individuals with personal injury claims, agree to a percentage fee for services and then say they would pay off medical expenses before giving the clients the remainder of the money they were awarded.
However, the indictment alleges that Rivers and Schurlknight failed to tell clients when their cases were settled, failed to pay the clients’ medical providers and then forged their names to release the money intended for the clients and kept it for themselves.
Despite the partnership, Rivers is the only one named in the lawsuit as Schurlknight committed suicide in mid-November 2012. Shortly after that local and federal investigators closed down the Florence law offices of Schurlknight & Rivers. Pending the investigation Rivers was suspended from practicing law by the South Carolina Supreme Court. Federal Bureau of Investigation agents handled the investigation, which was then handed over to the U.S. Attorney’s office for prosecution.
At the hearing Magistrate Judge Kaymani D. West accepted River’s financial affidavit confirming that he is claiming he cannot afford an attorney, and assistant federal defender Michael Meetze was assigned to him.
An unsecured bond of $25,000 was also set for Rivers at the hearing and will allow him to remain free if he follows parole officer instructions and remains in South Carolina. Prosecutors said they were not concerned with a flight risk as Rivers had been cooperating in the investigation and likely knew the indictment was coming.
The three charges list incidents of alleged mail fraud that took place on Oct. 6, 2006; April 14, 2011; and Sept. 1, 2011.
Assistant United States Attorney William E. Day II in the District of South Carolina’s Florence office is prosecuting the case on behalf of United States Attorney Bill Nettles.
Neither Meetze nor Rivers commented on the plea after the hearing.
Rivers, formerly of Schurlknight & Rivers, P.A., in Florence is charged with three violations of Title 18, United States Code, Section 1341, which deals with fraud and swindles in which someone devises a scheme “for obtaining money or property by means of false or fraudulent pretenses” and uses the postal service to do so.
If convicted of the felonies, Rivers could face fines, up to 20 years in prison or both.
The indictment also stipulates that if convicted of one or more violation of Title 18, Rivers would have to forfeit any money or property obtained through the fraud, which is estimated in the court papers to be $3,329,500.
Rivers is a Chesterfield County native who now lives in Darlington. He served in the Fourth Judicial Circuit as an assistant solicitor for Darlington, Chesterfield, Marlboro and Dillon counties. He is a founding partner of Schurlknight & Rivers.
The scheme has also spawned civil action from more than 30 alleged victims of the fraud.
Two lawsuits were filed this summer on behalf of groups of victims: one against Schurlknight’s wife, Malinda Schurlknight, and his college-aged son and daughter, Lee and Laura Schurlknight, alleging they purposefully hid a sizable life insurance claim from the courts to prevent creditors for seeking the money; and another against First Reliance Bank, alleging that the institution allowed the misuse of client trust accounts, helping the firm to hide and launder money.
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