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Justices revoke license of attorney who lent money to clients

A New London attorney who represented clients in financial trouble exploited those clients’ weaknesses for his own benefit and is no longer allowed to practice law, the Wisconsin Supreme Court ruled Tuesday.

Three “financially unsophisticated” couples hired Michael Trewin to handle legal issues surrounding either their foreclosures or possible bankruptcy, according to the court’s per curiam decision. The clients relied on Trewin’s advice, but ended up being financially hurt when he loaned them money and took their property when they couldn’t pay him back.

“Those transactions ultimately resulted in Attorney Trewin acquiring the clients’ property and enriching himself at their expense,” according to the decision. “It is clear that the public needs to be protected from this type of conduct and that, as the referee commented, Attorney Trewin is unfit to engage in the practice of law in this state.”

Trewin’s revocation will begin Nov. 7. According to the bar’s website, his membership is still active and he is in good standing.

He did not immediately return messages seeking comment.

According to the decision, the couples had trouble obtaining loans from banks and credit unions. Trewin would then lend them money, often with a 12- to 14-percent interest rate, according to the decision. The loans started with “fairly small amounts” and he would continue “increasing the amount of the loans over time as the couples needed additional funds.” Often, Trewin would not have the couples sign promissory notes or conflict of interest waivers.

“The referee further found that because Attorney Trewin was not constrained by standard banking regulations, the clients did not receive many of the pieces of information and the warnings that they would have received when borrowing from traditional lenders,” according to the decision. “Moreover, there were many errors in the documentation of the loans and the tracking of payments.”

Trewin was disorganized, according to court documents, which caused confusion on exactly how much a couple owed him. And the documents that did exist often had errors and omitted information, according to the decision. The information that investigators later requested was often incomplete or could not be found.

When clients fell behind on their payments, Trewin would not call, file a notice of delinquency or a lawsuit. Instead, he would create another loan for the client, with a mixture of the money owed and new money. If the couples could still not pay, he convinced them to sign over property, with the promise that he would lease them the property and have them slowly buy it back.

“The referee found that Attorney Trewin operated in this manner because he intentionally and consistently wanted to avoid judicial scrutiny of his conduct,” according to the decision.

The court’s decision talks about Trewin’s misconduct in a general manner, but does go into specifics for one case involving Francis and Karen Groshek, where he drafted a document saying the couple would sell him their 40 acres of land well below its appraised value. He told them in letters that he had arranged to sell the land for twice the appraised value and to sell it off to the couple’s neighbors.

In a letter three days later, though, “he stated that he would be willing to buy their land for enough money to pay off their existing bank loans, sell approximately 40 acres to the neighbors, and then give them a lease on all the rest of the land with an option to repurchase it.” He also told the couple’s current lender that he intended to sell the land back to the couple all along.

Once the two other couples filed a grievance with the Office of Lawyer Regulation, he had one of the couples sign a waiver saying they would not pursue the grievance, according to the decision.

Trewin was suspended for five months in 2004 for similar handling of client matters. In that case, the court noted that Trewin looks “as though he was more of a banker than a lawyer.”

He also was suspended in 2006 for similar instances, but also for not notifying opposing counsel and courts of his 2004 suspension and for not listing all his pending disciplinary matters in an affidavit he filed with the OLR.

In the latest case, the court ordered Trewin to pay $33,145.83 for the cost of the proceeding, noting that “he clearly has litigated this matter aggressively.”

It stated it was unable to impose restitution in the case, “given the disarray in Attorney Trewin’s records,” but noted that two sets of clients have brought suits against Trewin. One of those cases made it to the state Supreme Court in 2010.

Trewin graduated from the University of Wisconsin Law School in 1985.

If Trewin wants to practice law again in Wisconsin, he can petition the court for reinstatement after five years.

About Eric Heisig

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