Former Lexington County lawyer Richard Breibart stole millions from his clients before going to prison.
The late John Schurlknight, a Florence attorney, stole millions from his clients, then avoided prison by committing suicide. His partner, ex-lawyer William Rivers III, did a stint in prison for defrauding clients by, among other things, failing to tell clients when their lawsuits were settled and money came in.
Breibart, Schurlknight, Rivers and more than 130 other lawyers and ex-lawyers are named in a report, by the S.C. Bar Association’s Lawyers Fund for Client Protection, sent out this week to the state’s 10,642 active lawyers. The report covers a seven-year span of legal wrong-doing — from 2011 to mid-last year — in South Carolina.
Since 2011, that fund — created to compensate the victims of crooked S.C. lawyers — has paid out more than $2.9 million, the report says.
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The report does not say how much, in total, clients claimed was stolen by the crooked lawyers.
In some cases, however, the reimbursements did not come close to repaying the money lost. Under its rules, the fund pays out a maximum of $200,000 per crooked lawyer, regardless of how much a lawyer has stolen.
For instance, Breibart, who pleaded guilty in 2014 to federal mail fraud, admitted to U.S. District Court Judge Margaret Seymour that he stole $2.5 million from clients who gave him savings meant for retirement, money to hold for safekeeping or paid him for legal work that wasn’t done.
In one case, Breibart lied to a client, telling her that her husband was involved in a tax scheme and he needed $130,000 to set up a trust account for their children. Breibart got the $130,000; the woman lost her money.
The Bar’s Fund for Client Protection repaid less than 10 percent of the claims against the Lexington lawyer, dividing up $200,000 – the maximum per wayward lawyer – among 90 different claims, according to the list.
That’s wrong, says Greg Adams, a University of South Carolina School of Law associate professor and lawyers’ ethics expert.
Adams says the client protection fund — funded by a $30-a-year fee levied against Bar members — is “drastically underfunded” and its $200,000 cap on payouts unrealistic.
“If the Bar is going to be the protective device for clients, then it should do that properly,” Adams said. “There should be enough money available to make clients whole – let them get all of their money that was stolen back, not just some of it.”
‘Handful that don’t follow the rules’
Edward Pritchard, a former chair of the Fund for Client Protection, said lawyers on the list represent only a very small percentage of the state’s 10,000-plus lawyers.
“Like any other profession, there are always going to be a handful that don’t follow the rules,” Pritchard said.
Also, some payouts do not involve crimes.
Sometimes, lawyers die and money is found missing “and nobody can figure out why,” he said.
Besides Breibart, other lawyers on the client protection fund’s payout list include:
▪ Horace Anderson Jones. A York County lawyer, Jones committed suicide in 2015 after criminal charges were filed, alleging he stole $600,000 from clients. The fund paid out $167,132 to his clients.
▪ J. Todd Kincannon of Lexington County. A former executive director of the S.C. Republican Party known for provocative statements, Kincannon had his law license suspended in 2015. On the legal rolls, he now is listed as “incapacity inactive.” The Client Protection Fund paid three of his former clients $102,364 in compensation for claims.
▪ William Warren III. A Greenville attorney, Warren was disbarred by the S.C. Supreme Court in 2016 after admitting that he misappropriated $171,392 in clients’ money. The fund paid out $153,639 to various victims.
‘A matter of grace’
Lawyers often receive large amounts of money, either in fees, in settlements or other payments in lawsuits.
Normally, the lawyers keep the money in segregated trust accounts and pass it on to their clients, or use it for expenses in their clients’ cases.
They are not supposed to convert the money to their personal use.
The Client Protection Fund was created “to compensate clients who suffered losses due to the dishonest conduct of members of the S.C. Bar who had been suspended, disbarred or died,” according to the report to S.C. Bar members.
Under the Bar Association rules that established it, all of the reimbursements that the fund makes for losses are made as “a matter of grace ... and not of right.” A committee makes the decision on who gets how much money.