Tuesday, October 16, 2018

Former Foley & Lardner Partner Suspended

A two-year suspension from the Wisconsin Supreme Court

Attorney Wiensch was admitted to practice law in Wisconsin in 1991. He has no prior disciplinary history. He was formerly a partner of Foley & Lardner, LLP, (Foley firm) working out of the firm's Milwaukee, Wisconsin office. At all times material to this matter, Attorney Wiensch worked in the firm's trust and estates practice group.

The representation at issue

While working at the Foley firm, Attorney Wiensch provided estate planning services to a husband and wife who were owners of a privately owned business corporation. Attorney Wiensch prepared a trust under the terms of which the husband and wife were the trust donors and their children were the trustees and beneficiaries. Attorney Wiensch drafted an Installment Sale Agreement, pursuant to which the husband sold most of his stock in the company to the trust in exchange for a promissory note in an amount in excess of $50 million based on the appraised value of the stock sold. The purpose of the stock sale was to transfer wealth to the clients' children, via the trust, free of gift and estate taxes and to ensure that any future appreciation of the stock held by the trust would not become part of the husband's estate.

After the husband died

An IRS estate tax attorney served as the examiner for the IRS in conducting the audit. The IRS attorney corresponded with Attorney Wiensch in an effort to obtain information material to the audit. In September 2012, in response to requests from the IRS attorney, Attorney Wiensch sent the IRS copies of an Installment Sale Agreement, a Collateral Pledge Agreement, and a Guaranty of Specific Transaction. Attorney Wiensch represented to the IRS that the Installment Sale Agreement memorialized the terms of the stock sale and that the Collateral Pledge and Guaranty related to the stock sale. The copy of the Installment Sale Agreement Attorney Wiensch sent to the IRS in September 2012 contained a defined value formula clause. Attorney Wiensch altered and misdated the Installment Sale Agreement he sent to the IRS in September 2012. He did not prepare this document contemporaneously with the stock sale. The Installment Sale Agreement the husband actually executed on an earlier date did not contain the defined value formula clause.

 Attorney Wiensch also altered and misdated the Guaranty he sent to the IRS in September of 2012. He did not prepare this document contemporaneously with the stock sale. He copied the signatures of the clients' children from a different document bearing a different date and pasted the signatures on the copy of the Guaranty he sent to the IRS attorney.

The wife died after the IRS had issued a notice of deficiency

 In a December 23, 2016, letter from his counsel to the OLR, Attorney Wiensch admitted that he had created the August 1999 Durable Power of Attorney to Make Gifts and the February 2011 Durable Power of Attorney for Financial Matters in late 2015 or early 2016. By email transmitted to the OLR on March 31, 2017, counsel for Attorney Wiensch informed the OLR that Attorney Wiensch conceded that he had altered and misdated the Installment Sale Agreement and Guaranty of Specific Transaction he provided to the IRS in September 2012 in connection with the audit of the husband's estate.

When the IRS pursued the web of deals

Attorney Wiensch created an altered Durable Power of Attorney to Make Gifts dated August 1999 by copying the wife's signature from another document. Attorney Wiensch never informed the IRS attorney or the Foley attorneys that he had altered and misdated the Durable Power of Attorney to Make Gifts that he sent to the IRS attorney in October 2015.

The IRS went to the children and the forgeries came to light

By letter dated August 22, 2016, the Foley firm informed the IRS that Attorney Wiensch was no longer with the firm and that they believed the August 1999 Durable Power of
Attorney to Make Gifts and the February 2011 Durable Power of Attorney for Financial Matters that Attorney Wiensch had provided to the IRS were not authentic and were being withdrawn. The Foley firm subsequently alerted the IRS to the irregularities later discovered with regard to the Guaranty and the defined value formula clause in the Installment Sale Agreement and the firm reported Attorney Wiensch's conduct to the OLR.

 The court approved the stipulated sanction

After closely reviewing the matter, we accept the stipulation and determine that Attorney Wiensch engaged in the 13 counts of misconduct alleged in the OLR's complaint. We further conclude that a two-year suspension of Attorney Wiensch's license to practice law is an appropriate level of discipline to impose in view of the serious nature of the misconduct and the various aggravating and mitigating factors present in this case.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2018/10/a-two-year-suspension-from-the-wisconsin-supreme-court-attorney-wiensch-was-admitted-to-practice-law-in-wisconsin-in-1991-h.html

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