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A company that duped thousands of Ohio senior citizens into purchasing overpriced and unneeded legal plans and annuities should be crushed under the weight of millions of dollars in fines and restrictions on its practices, the Columbus Bar Association told the Ohio Supreme Court today.

About 8,000 Ohio seniors have been swindled by American Family Prepaid Legal Corp. and an affiliate, Heritage Marketing & Insurance Services Inc., the attorney for the Columbus Bar said to the state's top court.

Sales representatives for the company pressured gullible seniors into paying $2,000 for living trusts and other prepaid legal services, and followed up by selling them annuities, the association's attorney said.

"This is the worst (scam) we've ever seen in the state of Ohio in terms of the number of victims," attorney Joyce D. Edelman said outside court. "It's staggering."

Edelman asked the court to slap the company, its owners and agents with at least $6.4 million in fines and to limit their practices so severely as to drive the company out of business.

Just one hitch: American Family Prepaid Legal Corp. already is out of business, its attorneys told the Supreme Court.

The California-based company declared bankruptcy in 2007, and its assets were sold to Puritan Financial Services Inc. in 2008, according to the lawyers and documents filed in the bankruptcy case.

American Family does no business in Ohio, said Andrew R. Bucher, an attorney for the company.

While Puritan Financial Services inherited the company's assets, Quest Financial & Insurance Services acquired its customer list and has continued many of its practices, Edelman said.

Any penalties assessed by the Ohio Supreme Court would apply to Quest Financial, she said.

James L. Reinheimer, another attorney for American Family Prepaid Legal Corp., said any fines against the company would hurt its former customers.

"These people want affordable legal services," Reinheimer said. "To penalize American Family and to penalize these Ohioans who want a product, and who bought a product, is unconscionable."

The bar association's case against American Family rests on the premise that the company's marketers did the work of lawyers. In trying to entice seniors to purchase living wills and other legal services, the marketing agents -- who are not attorneys -- performed work that nonlawyers can't do, the bar association said.

The case goes back to 2002, when the Columbus Bar Association first alleged that American Family marketers had engaged in the unauthorized practice of law. The next year, the two sides entered into a consent agreement that allowed the company to continue operating but amended some of its practices.

The company had lawyers reviewing its clients' assets, determining estate-planning measures and drafting trust documents, Bucher said. If the lawyers determined that the company's services didn't meet a customer's financial needs, they canceled the plan and issued full refunds, Bucher said.

That claim drew a sharp challenge from Supreme Court Justice Terrence O'Donnell. He pointed to cases in which a Parma couple purchased a trust despite having just $40,000 in combined assets, and where a Shaker Heights Alzheimer's patient in her 80s signed legal documents issued by the company.

Bucher replied that the company's attorneys spoke with every client who purchased a trust.

Edelman responded: "(American Family representatives) are fooling no one here. They operate a multistate illegal-trust mill."

Two of the company's former marketers, Stephen E. Grote of Cincinnati and Alexander Scholp of Spring Valley, told the court that they never offered anyone legal advice.

"I was merely an agent of American Family selling products and services, just as I did when I was an insurance agent," Scholp said.