A Mequon solo-practitioner faces a 2-year license suspension over allegations that he broke 10 attorney ethics rules.
According to a complaint filed Dec. 27 by the Office of Lawyer Regulation, the majority of the violations occurred while Carl Scholz was representing a Madison woman in an Ozaukee County foreclosure case. She was initially represented by another Mequon solo-practitioner, Donald Fraker, a colleague of Scholz’s, according to the OLR. The two lawyers shared office space, according to the complaint.
The woman owned half of some land that was subject to the foreclosure action, and the other half belonged to her son’s ex-wife pursuant to divorce proceedings. The land was divided into two parcels. One was sold, and the money from that sale was used to pay the mortgage owed to the bank and other costs related to the closing, according to the complaint.
Later, the court approved a stipulation between the woman and the son’s ex-wife allowing the sale of the second parcel but requiring that half of the money from the sale, $94,545.64, be put into the trust accounts of each of their lawyers. It also required a court order for the money to be disbursed.
When Scholz took over representing the woman in 2013, Fraker cut a $60,975.94 check to Scholz and retained $29,069.70, hoping it would be used to pay Fraker’s legal fees, according to the complaint.
The OLR alleges Scholz deposited the money from Fraker into his business account and about a month later had spent most of that money without a court order. The OLR alleges that Scholz used $60,343.40 to pay for expenses that were either for his own benefit or to benefit clients and third parties.
Although the money was gone, Scholz continued as if the money had not been spent, including participating in mediation, lying to the court and the special master assigned to the case and fabricating documents he submitted to the court, including a receipt with his client’s forged signature.
The OLR also alleges that Scholz lied to Fraker that the court had approved an agreement that had been reached in mediation, and, as a result, Fraker paid himself with the money he had been holding in trust. Fraker could not immediately be reached for comment.
Also, according to the complaint, Scholz lied to the OLR while it was investigating his conduct.
The OLR is asking not only that the Wisconsin Supreme Court suspend Scholz’s license for two years but also that the justices order him to return more than $60,000 and pay it to either the Ozaukee County circuit court or deposit it into his opposing counsel’s trust account.
Scholz could not immediately be reached Thursday at the phone number and email address listed on the Wisconsin State Bar website.
Scholz has 20 days to respond to the complaint from the time it is served on him. Typically, the Wisconsin Supreme Court will appoint a referee to preside over a case, make findings of fact, conclusions of law and recommend any discipline. Scholz may appeal the referee’s recommendations. The high court will then review those findings and conclusions and issue a final decision in the matter.
This is not Scholz’s first run-in with the OLR. Scholz, who graduated from Marquette University Law School in 1994, was privately reprimanded in 2011 for failing to hold client money in trust and transferring client money from his trust account to his business account without the client’s permission.Follow @erikastrebel