Professional Discipline

Disciplinary proceeding against John W. Strasburg

The Wisconsin Supreme Court revoked the law license of John W. Strasburg, 51, Milwaukee, commencing April 21, 1998, and ordered him to pay $2,500 in restitution to a client, and the full costs of the disciplinary proceeding. The court also found Strasburg in contempt of its 1990 suspension order and imposed a remedial contempt sanction, prospectively. The contempt sanction will require Strasburg to pay a forfeiture of $500 per day and will be applicable if he continues to practice law.

In March 1990 the court suspended Strasburg's license for two years, based upon conflicts of interest and excessive fees relating to his representation of clients regarding Title 19 divestitures and probate. Strasburg's practice was incorporated as ElderCare Asset Protection Plans Inc. (See, 64 Wis. Law. 48-50 (May 1990).) Following the suspension, Strasburg continued to operate ElderCare and provided advice and service to clients regarding financial planning and Title 19 qualification.

While suspended, Strasburg prepared trusts, powers of attorney, living wills, declarations to physicians, health-care powers of attorney and deeds, and advised clients regarding those documents, all in contempt of the court's suspension order. (SCR 22.26(2) and SCR 20:5.5(a).) Strasburg denies that ElderCare is a law firm; however, his marketing material stated that Eldercare "provides a completely legal family financial and estate plan" and that it also guides its clients "through the proper, legal steps" to protect parents' assets. Strasburg also failed to advise potential clients, who asked if he was an attorney, that his license was suspended (SCR 20:8.4(c) and SCR 20:7.1(a)), and charged unreasonable "legal fees" (SCR 20:1.5(a)).

In one matter, Strasburg met with two women regarding the preservation of their father's assets. He provided them with a written outline of services, indicating that he would prepare a trust, a physician's declaration, and if necessary, a durable POA and health-care POA. They paid him $2,500. The women subsequently contacted several attorneys to compare fees, and discovered that the same services could be performed for less than half the $5,000 fee Strasburg was charging. The women terminated Strasburg's services and asked for a refund of the unused retainer. Strasburg refused, despite having done no work for the clients.

In another matter, Strasburg was retained by a woman who wanted to preserve her father's assets. All of the woman's contacts with him were via telephone or mail. Strasburg sent her a packet of documents, including a POA, and a trust. The POA was signed by the woman and her father and returned to Strasburg. However, the father had been declared incompetent approximately six weeks earlier. Despite the fact that Strasburg had not witnessed the execution of the POA, he signed the document as a witness, and had his assistant improperly notarize the father's signature. (SCR 20:8.4(c).)

In a final matter, Strasburg was consulted by an elderly man with no close relatives concerning a $215,000 annuity that was due to be renewed. Strasburg drafted a custodial trust for the benefit of eight charities, funded by the proceeds of the man's annuity; a declaration of trust; and a transfer under the Wisconsin Uniform Custodial Trust Act. (SCR 22.26(2) and SCR 20:5.5(a).) Each of those documents designated Strasburg as the custodial trustee. Strasburg also prepared a POA, appointing himself as the man's agent to handle his property, and a health-care POA and declaration to physicians, designating himself as the man's health-care agent. Strasburg transferred the trust's assets from one to another of several accounts, including his business and personal accounts, which were not designated as trust accounts. He misrepresented to the man that an account containing some of the trust's assets had a $49,650 balance, when the account's actual balance was $350. In addition, and contrary to law, he failed to notify seven of the eight charities that they were beneficiaries of the trust and failed to provide them with annual statements regarding the trust's administration. In addition, he used assets from the trust for personal purposes, including nearly $14,000 for newspaper advertising for his business. (SCR 20:8.4(c).) The funds subsequently were replaced.

Strasburg also failed to respond to Board of Attorneys Professional Responsibility (BAPR) inquiries regarding the trust, refused to produce his records regarding it, and failed to cooperate with any of BAPR's other investigations. While the investigations were pending, Strasburg petitioned to resign from the State Bar. However, the court held his petition in abeyance, pending the disposition of the investigation and any consequent disciplinary proceeding. (SCR 22.07(2) and (3) and SCR 21.03(4).)

Disciplinary proceeding against Leslie J. Webster

On April 29, 1998, the Wisconsin Supreme Court suspended the law license of Leslie J. Webster, 44, Ellsworth, for two years, retroactive to Jan. 21, 1998, the date on which the court ordered a summary suspension of Webster's license. Webster was convicted in federal court on one count of aiding and abetting the fraudulent concealment of a debtor's property from a bankruptcy court. He was sentenced to 15 months' imprisonment.

Using his professional position, Webster counseled his client to make a fraudulent representation in the bankruptcy regarding the status of a tavern that the client was purchasing on a land contract. The bankruptcy papers recited that the tavern recently had been surrendered to the vendor of the land contract in exchange for a release of the unpaid balance on the contract. The papers did not disclose that the tavern had been incorporated and that the client's interest in it had been conveyed to the corporation. Nor did the papers disclose any ownership of stock in the business.

The court accepted the stipulation of Webster and BAPR that the conduct for which Webster was convicted constituted the commission of a criminal act that reflects adversely on his honesty, trustworthiness, and fitness as a lawyer, contrary to SCR 20:8.4(b). The court accepted the parties' stipulation that Webster's conduct was aggravated by his active participation in the fraud; his advice and counsel to the client that contributed significantly to the client's participation in the fraud and his conviction and incarceration for it; Webster's false testimony during the trial; and Webster's prior discipline, a public reprimand in 1990.

The court also accepted the parties' stipulation regarding mitigating factors. First, the client's creditors were not deprived of assets because the client had had no equity in the tavern. Second, Webster did not benefit personally from his fraudulent conduct. Third, Webster has assisted charities and civil groups in his community. Finally, Webster fully cooperated during BAPR's investigation of this matter.

Disciplinary proceeding against David J. Winkel

On April 21, 1998, the Wisconsin Supreme Court publicly reprimanded David J. Winkel, 38, Neenah, based on his failure to do necessary legal work in two client matters, which caused serious repercussions to the clients. Winkel also failed to cooperate in the BAPR investigation in one of the matters.

In the first matter, Winkel represented a couple who wanted to close down their remodeling business. Winkel failed to determine how much the clients had received for three remodeling projects still in progress, the disbursements that had been made to subcontractors in those projects, and the claims of subcontractors that remained to be paid out of the funds that had been received. If Winkel had obtained that information, he would have learned that there were approximately $33,000 in subcontractor bills that should have been paid out of those deposits, but were not. As a consequence, he did not tell the clients that if they used the monies in their company accounts for something other than the payment of the subcontractor bills, they would risk being charged with felony theft by contractor.

The clients used the remaining funds for purposes other than the payment of subcontractors: They gave $5,000 to Winkel's firm, and paid the rest to their bank in exchange for release of their personal guarantees on a loan they had received from the bank to purchase the business.

The clients subsequently were prosecuted for contractor theft. One client pleaded guilty to three misdemeanor counts of contractor theft, and the case against the other was dismissed. The clients made full restitution of all trust monies they had received.

The supreme court adopted the referee's conclusion that Winkel's failure to obtain information about the trust funds held by the business before the clients surrendered the funds to the bank constituted a failure to do adequate preparation with respect to his representation of the clients, in violation of SCR 20:1.1. The court further adopted the conclusion that Winkel's failure to inform the clients about the risks of criminal prosecution constituted a failure to explain the matter to the clients to the extent reasonably necessary to permit them to make an informed decision about the best use of the remaining business assets, contrary to SCR 20:1.4(b).

In a second matter, Winkel represented a couple and their son in estate planning. Winkel reviewed the trust agreement executed by the husband that provided that upon his death, all of his assets would be allocated to his wife's marital share unless she disclaimed all or part of them. If no disclaimer were made, all of the assets would pass directly to the wife and be included in her estate at her death.

When the husband died in February 1992, Winkel failed to recognize the significance of the trust's disclaimer requirements and did not perform the necessary analysis to advise the wife of the need for a written disclaimer of her husband's assets. As a result, the estate of the wife, who died in May 1993, had a potentially greater tax liability.

Winkel subsequently claimed that he had prepared the necessary disclaimer, but his files did not substantiate that he had done so. The son found no indication in his records that his mother had executed a disclaimer.

The son retained another attorney to represent him in estate matters. Winkel did not respond to the attorney's request for the clients' estate file, nor did Winkel respond to the initial letter from BAPR requesting information. Winkel did not respond timely to a second letter from BAPR, and did not respond to a telephone call from the district professional responsibility committee investigator assigned to the matter. In explaining his failure to respond to BAPR's inquiry, Winkel asserted that he had undergone surgery and was taking pain medication. In fact, Winkel had had two surgeries more than a year before receiving BAPR's inquiry and had a third surgery not long after receiving it.

The supreme court adopted the referee's conclusion that Winkel's failure to have the wife execute the necessary disclaimer under her husband's trust constituted failure to provide the legal knowledge, skill, thoroughness, and preparation reasonably necessary for competent representation of the clients, contrary to SCR 20:1.1. The court further adopted the conclusion that by misrepresenting that he had prepared the disclaimer and misrepresenting the reason for his failure to respond to BAPR's inquiries, Winkel engaged in conduct involving misrepresentation, contrary to SCR 20:8.4(c).

In addition, the court adopted the conclusion that by failing to respond to successor counsel's request for necessary estate information, Winkel failed to keep a client reasonably informed of the status of a matter and promptly comply with reasonable requests for information, contrary to SCR 20:1.4(a). Finally, the court adopted the conclusion that by failing to respond to BAPR's initial request for information and subsequent contacts from BAPR and the district committee investigator, Winkel failed to cooperate in the investigation of this matter, contrary to SCR 21.03(4) and 22.07(2).

Winkel has received no prior discipline.

Wisconsin Lawyer