A former New Berlin mayor and real estate developer who allegedly mishandled hundreds of thousands of dollars of client money is at risk of losing his law license.
James Gatzke, of Gatzke Law LLC, allegedly misappropriated and mishandled money he was paid as an attorney for Patricia Schaeffer in 2004, according to a 22-count, 36-page complaint filed Aug. 22 by the Office of Lawyer Regulation.
Schaeffer was married to Steven Wiederholt, a Brookfield investment advisor who killed himself in June 2005 amid a lawsuit alleging Wiederholt stole $3.5 million from a former business partner.
Schaeffer retained Gatzke to handle lingering criminal and civil matters after her husband’s death.
According to the complaint, Schaeffer also “asked Gatzke to handle her finances, including credit card debts, monthly bills and expenses” because she is “unsophisticated in business matters.”
Gatzke said in an interview Wednesday that Schaeffer was also his business partner for several real estate ventures. Several of the allegations involve Gatzke’s work on a New Berlin development called North Oak Estates and the purchase of three homes on Coffee Road for possible commercial development.
The complaint alleges Gatzke repeatedly misused money from Schaeffer’s trust account and put the money into other business accounts. He also failed to get permission from Schaeffer to invest her money on several occasions, the OLR alleges, and mishandled money from Wiederholt’s trust in cases involving Wiederholt’s daughter and Schaeffer.
The OLR is asking the state Supreme Court to revoke Gatzke’s law license and to order him to pay more than $300,000 in restitution to Wiederholt’s daughter and Schaeffer.
Gatzke said Wednesday that he had not received the OLR complaint, although he is familiar with the situation.
He said Schaeffer made the accusations because she “lost money” in business ventures with him after the real-estate market’s downturn in 2006 and 2007.
Schaeffer immediately could not be immediately reached for comment Wednesday afternoon.
“My partner is now claiming that something is improper was done,” Gatzke said, adding that he expects a “just resolution.”
Gatzke served as New Berlin’s mayor between 1997 and 2001.