Friday, May 27, 2022

Power Of Attorney

The Wisconsin Supreme Court has accepted the license revocation by consent of an attorney who had taken advantage of friend's power of attorney

The six counts of misconduct set forth in the complaint all arise out of Attorney Schwefel's relationship with H.K., an elderly woman born in 1931. H.K.'s husband died in 2003. H.K. met Attorney Schwefel around 2007 while both were visiting Florida. After H.K. returned to Wisconsin, the two women formed a friendship and went on social outings and vacations together.

H.K. suffered a stroke in 2009

H.K. trusted Attorney Schwefel to assist her with her financial affairs because Attorney Schwefel had held herself out to H.K. as an attorney who had acted as an agent or fiduciary for other people in the past and because H.K. considered Attorney Schwefel to be a friend. H.K. believed that Attorney Schwefel would act in H.K.'s best interests as H.K.'s fiduciary with regard to H.K.'s assets and that Attorney Schwefel would keep records of her handling of H.K.'s assets and financial affairs.

After taking control of H.K.'s finances

On March 1, 2010, Attorney Schwefel used $72,600.51 of H.K.'s funds from the jointly titled bank account to fund the purchase of a condominium in Naples, Florida. Attorney Schwefel titled the unit in her own name as sole owner. H.K. did not authorize Attorney Schwefel to use her funds to purchase the condominium unit, and H.K. was unaware that her funds had been used to purchase the unit until she received materials from the OLR during its investigation.

After further defalcations

By 2012, H.K. had begun to be afraid of Attorney Schwefel and the control Attorney Schwefel exerted over H.K.'s life. Attorney Schwefel was sometimes verbally harsh with H.K. and was also sometimes rough in her physical treatment of H.K. H.K.'s fear of Attorney Schwefel and the control she had over H.K.'s life contributed to H.K. experiencing periods of worsening depression between 2012 and 2014.

Another friend was Attorney Ruffalo

In July 2012, Attorney Schwefel wired $100,000 of H.K.'s funds to Bay Breeze Title Services LLC. The transfer represented a loan to Attorney Ruffalo to fund a real estate transaction for Attorney Ruffalo's benefit, which Attorney Ruffalo was to repay within one year. H.K. did not know, understand, or consent to her funds being loaned to Attorney Ruffalo.

In or about March or April 2013, Attorney Ruffalo told Attorney Schwefel and H.K. about a condominium that was available in Naples, Florida. Attorney Ruffalo believed that H.K. wanted to purchase the unit and agreed to represent her in the purchase. At the time, H.K. did not have sufficient funds in the two bank accounts opened by Attorney Schwefel to purchase the unit. Attorney Ruffalo agreed to repay her July 2012 loan by providing the funds necessary to purchase the condominium unit on the day of closing. In or about April 2013, Attorney Schwefel entered into an offer to purchase the condominium unit in her own name, on terms negotiated with the sellers by Attorney Ruffalo, including the purchase price of $110,000. On May 3, 2013, Attorney Schwefel assigned the contract to purchase the unit to H.K. The assignment asserted that there was an agreement between H.K. and Attorney Schwefel that the condominium unit would be purchased with a transfer on death deed naming Attorney Schwefel as the beneficiary, or with a deed that titled the property in both H.K.'s and Attorney Schwefel's names as joint tenants with right of survivorship.

Eventually - and after further abuse - H. K. consulted another attorney and revoked the powers of attorney.

The damage done

Having reviewed Attorney Schwefel's petition for consensual revocation, the OLR's draft complaint, and the OLR's recommendation on Attorney Schwefel's petition, we accept Attorney Schwefel's petition for the revocation of her license to practice law in Wisconsin. Attorney Schwefel took advantage of her friendship with a vulnerable person and over an extended period of time she converted tens of thousands of dollars of H.K.'s funds to her own use and exerted control over all aspects of H.K.'s life. When confronted with evidence of her conversion, she lied to a circuit court and the OLR. The seriousness of Attorney Schwefel's misconduct demonstrates the need to revoke her law license in order to protect the public, the courts, and the legal system from repetition of her misconduct; to impress upon Attorney Schwefel the seriousness of her misconduct; and to deter other attorneys from engaging in similar misconduct. 

(Mike Frisch)

Bar Discipline & Process | Permalink


Post a comment