Friday, July 15, 2011

Bad Fiance

The Wisconsin Supreme Court has imposed a three-year suspension of an attorney for (among other things) the following conduct:

Much of Attorney Schoenecker's misconduct relates to his relationship (both personal and professional) with M.F.  In 2007 Attorney Schoenecker and M.F. were engaged to be married.  In December of that year they opened a joint checking account.  M.F. also obtained a $100,000 home equity line of credit and then made a loan of $48,500 to Attorney Schoenecker.  In exchange for the loan, Attorney Schoenecker executed a promissory note, in which he promised to repay the loan with interest.  

Two days after making the loan to Attorney Schoenecker, M.F. learned that Attorney Schoenecker had made cash withdrawals from her checking account at a casino.  Those withdrawals had resulted in a $1,500 negative balance in the account.  This discovery apparently caused M.F. to close the joint checking account and to end her engagement to Attorney Schoenecker.

Attorney Schoenecker repaid only $26,500 of the loan balance.  With interest, he still owed M.F. approximately $23,000.  At some point in 2009 M.F. filed a collection action against Attorney Schoenecker.  The parties ultimately reached a settlement, pursuant to which Attorney Schoenecker paid the total sum of $32,106.36 to M.F. as part of a full resolution of the financial issues between the individuals.

In March 2008, between the end of the parties' engagement and M.F.'s filing of the collection lawsuit, Attorney Schoenecker became an associate at the Clair Law Offices (Clair law firm) in Lake Geneva.  It appears from the stipulation that prior to this time Attorney Schoenecker had been representing M.F. in a dispute with a contractor who had performed some work on a property owned by M.F.  Attorney Schoenecker informed the law firm that he was representing M.F. and sent her a Legal Representation and Fee Agreement letter on behalf of the Clair law firm.  M.F. was then considered a client of the firm.  Ultimately, after the contractor filed a lawsuit against M.F. in small claims court, Attorney Schoenecker withdrew as M.F.'s attorney.

Attorney Schoenecker provided legal representation to M.F. at the same time as he was a debtor to her pursuant to the December 2007 loan and promissory note.  Attorney Schoenecker did not obtain M.F.'s written consent to waive any actual or potential conflict of interest in the legal representation caused by the creditor/debtor relationship.

The policy of the Clair law firm was that senior attorneys of the firm had to approve bills before they were sent to clients.  Attorney Schoenecker, however, sent out two invoices to M.F. in September and October 2008 without obtaining the necessary approval.  The total amount shown on the bills was $13,523, but a substantial number of the entries on those invoices were fraudulent.  The OLR's memorandum in support of the stipulation alleges that Attorney Schoenecker's submission of these inflated invoices to M.F. was an attempt to offset the remaining amount that he owed M.F. from the December 2007 loan.

In addition to attempting to defraud M.F. through the invoices, Attorney Schoenecker also engaged in a pattern of attempted and completed thefts from her bank accounts.  In December 2008 he obtained some of M.F.'s personal information without her consent and began attempting to withdraw money from a business account that she maintained.

Attorney Schoenecker used M.F.'s personal information to enter her business account without her permission and set up an online bill paying account.  He changed the e-mail address on the account so that M.F. would not receive notice of any checks he intended to draw on her account.

  Attorney Schoenecker first generated two checks in December 2008 that he made payable to himself in the amounts of $950 and $450.  He was able to cash the $950 check, but his attempt to cash the $450 check was apparently unsuccessful.  Attorney Schoenecker tried to cash a third check in the amount of $1,750 in January 2009, but the check did not clear due to insufficient funds in the account.  Attorney Schoenecker did not have M.F.'s consent to generate or cash any of these checks.

Attorney Schoenecker was charged in two separate criminal proceedings arising out his actions concerning M.F.  In a Walworth County proceeding, State v. Schoenecker, Case No. 2009CF250, the state charged Attorney Schoenecker with two counts of felony identity theft for the purpose of obtaining money for his attempts to withdraw money from M.F.'s business account.  On January 27, 2010, pursuant to a plea agreement, Attorney Schoenecker pled guilty to one felony count of identity theft.  See Wis. Stat. ยง 943.201(2)(a).  The second count of identity theft was dismissed and read in for sentencing purposes.  The Walworth County circuit court imposed two years of probation and ordered Attorney Schoenecker to pay restitution and court costs.

There also were stipulations of misconduct in his dealings with his law firm and in his personal bankruptcy.

The court majority called the conduct "quite disturbing..."

Justice Bradley, joined by Chief Justice Abrahamson, would reject the stipulation in favor of greater discipline. (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2011/07/the-wisconsin-supreme-court-has-imposed-a-three-year-suspension-of-an-attorney-for-the-following-conduct.html

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