Lifeguard company in Myrtle Beach accused of being a front for greed in wake of drowning
The owner of a Myrtle Beach-based lifeguard provider, whose business was found liable in the 2018 drowning death of a Maryland vacationer, is now being accused in a lawsuit of siphoning funds for personal gain instead of using them to provide properly certified and trained rescuers.
In July, jurors ruled a “dual role” model used by Lack’s Beach Service allowing it to profit from beach chair and umbrellas rentals in exchange for lifeguards along sections of Myrtle Beach oceanfront was to blame for the death of 41-year-old Zerihun Wolde, awarding his estate nearly $21 million in damages.
The dual role practice, implemented exclusively in the city and — for now — on Horry County beaches, is widely discredited within the aquatic safety community.
The U.S. Lifesaving Association estimates a person swimming on a beach patrolled by organization-certified guards have a 1 in 18 million chance of drowning.
Lack’s Beach Service was found liable July 29 for the 2018 drowning death of Wolde, who was pulled under by a rip current on a stretch that was supposed to be monitored by a lifeguard.
A jury awarded his family $20.7 million in damage following a 2019 wrongful death suit brought by Wolde’s fiancee, Meswaet Abel — the fiffh highest civil penalty in state history.
Four months before his death, city officials extended their agreement with Lack’s but added several more safety precautions, including additional supervision requirements and more lifeguards.
In arguing for a more lenient payout after the verdict, Lack’s pointed to the $47,370 deficit it was running at the time of Wolde’s death.
Lack’s attorneys also said its contract with the city, which is valid through 2025, makes it an arm of local government that would cap its penalty at $300,000 under state law. That appeal is still pending.
But in newly filed motions, Mullins McLeod Jr., lead attorney for Wolde’s estate, said Lack’s owner George Lack has used revenues from his beach rental service to enrich himself by operating it as an extension of his outdoor furniture store and should be on the hook for the entire penalty.
“...the citizens of Myrtle Beach never intended and in fact did not give Defendant a cash cow for Defendant to siphon off funds for own personal financial gain at the expense of public safety and to evade accountability to judgment creditors,” McLeod wrote in a motion submitted to the 15th Judicial Circuit on Nov. 2.
McLeod said in filings funneling profits from Lack’s Beach Service meant the company was under-capitalized and in no position to offer the kind of training and equipment lifeguards would need for their jobs.
“Lack was willing to and in fact did violate the public’s trust by masquerading a furniture rental business as a public safety company in order to secure the exclusive right to rent furniture on the public’s beach,” McLeod wrote.
To further his case that Lack’s Beach Service and Lack’s Office Furniture are a single entity, McLeod offered several findings including:
- Use of a centralized accounting system and office space
- Commingling of corporate funds
- Extending loans between the companies
- Payment of worker’s wages from one corporation to the other
- Undocumented fund transfers between the two companies
Mayor Brenda Bethune and other officials have said they’re reviewing the city’s contract with Lack’s, while Horry County plans to abandon dual role life guarding when its current agreements with Lack’s and John’s Beach Service sunset in May.
“We need to separate how life guarding and umbrella rentals are done. Right now, it’s together and you’ve seen some things about that, but we all recognize now it’s not the same beach as it was seven years ago,” assistant county administrator Randall Webster said Sept. 18.
McLeod declined further comment to The Sun News Nov. 2, and neither Lack’s nor his attorney could immediately be reached for a response.