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In re Disciplinary Proceedings Against Bauer

Supreme Court of Wisconsin

May 16, 2018

In the Matter of Disciplinary Proceedings Against Michael R. Bauer, Attorney at Law:
Michael R. Bauer, Respondent-Appellant. Office of Lawyer Regulation, Complainant-Respondent,


         ATTORNEY disciplinary proceeding. Attorney's license suspended.

          For the respondent-appellant, there was a brief filed by Michael J. Short and Short Law Office, Madison.

          For the complainant-respondent, there was a brief filed by Paul W. Schwarzenbart and Office of Lawyer Regulation, Madison.

          PER CURIAM.

         ¶1 We review the report and recommendation of Referee John B. Murphy that Attorney Michael R. Bauer's license to practice law in Wisconsin be suspended for a period of one year for professional misconduct and that he pay the full costs of this proceeding, which are $15, 727.40 as of April 25, 2018.

         ¶2 Upon careful review of the matter, we adopt the referee's findings of fact and conclusions of law. We agree that a one-year suspension of Attorney Bauer's license is an appropriate sanction for his misconduct. We also agree that the full costs of this proceeding should be assessed against him.

         ¶3 Attorney Bauer was admitted to practice law in Wisconsin in 1988. He has not previously been disciplined. At the time pertinent to this case he was a member of Bauer & Bach, LLC in Madison. He now practices as Bauer Law Office in Madison.

         ¶4 Bauer & Bach maintained both a trust account and a business account at Capitol Bank. Attorney Bauer was the attorney primarily responsible for the record keeping for both the trust and business accounts. T.P., a paralegal assistant at the firm, assisted the attorneys by preparing business and trust account checks and by making entries in the QuickBooks bookkeeping program used by the firm for the purpose of, among other things, serving as the transaction register for the accounts. At no time during the pertinent time frame at issue here did the trust account ever have a negative balance. Attorney Bauer also maintained accounts for Sports Advisors, Inc., a business he owned, at Capitol Bank and at U.S. Bank.

         ¶5 On June 24, 2016, the Office of Lawyer Regulation (OLR) filed a complaint against Attorney Bauer alleging 28 counts of misconduct. The complaint alleged that between December 2013 and October 2014, Attorney Bauer misused seven clients' trust funds and mismanaged his trust account. On numerous occasions he transferred client funds from one account to another without permission of the clients, failed to make notations of the transfers, transferred trust account funds to fill gaps created in other client accounts to avoid detection, transferred trust funds to his office account and to the account of his subsidiary business, Sports Advisors, Inc., and borrowed money to reestablish correct account balances. It is undisputed that all of the clients received all monies due them. It is also undisputed that none of the clients consented to the use of their money to fund disbursements that benefitted others.

         ¶6 Attorney Bauer filed an answer on August 16, 2016, admitting some allegations in the complaint and denying others. The referee was appointed on October 8, 2016. On May 15, 2017, the parties entered into a stipulation whereby Attorney Bauer did not contest 13 of the counts; the OLR agreed to dismiss four counts; the parties agreed that four other counts could be amended to conform to the evidence; and Attorney Bauer contested seven counts that alleged he had converted client funds.

         ¶7 A brief evidentiary hearing was held on May 22, 2017. At the hearing, Attorney Bauer admitted mishandling the trust account but described what happened as being sloppy and the result of neglect. He blamed some of the problems on the fact that "starting probably late 2014 up through mid-2015"[1] he spent a lot of time in Washington, D.C. He said:

I neglected it. I mean, in the end, I mean, I thought that -- it was one of those deals that I thought it was all going to be over the next day. So I thought, well, I'm going to get this over and get back and get things straight. The next day went into the next day, and I was still not around.
So all of a sudden the focus came on making sure that -- I guess more making sure -- I didn't have access to QuickBooks when I was out there, but I did have access on-line to the bank account. So then I was suddenly more focused on just making sure that there was always money in the appropriate accounts to cover any checks that were being cut.

         ¶8 Attorney Bauer said that things came to a head when the firm's paralegal looked at the bank statements and saw the problems with the trust account. She then notified Attorney Bach, who confronted Attorney Bauer. Attorney Bauer said he apologized to Attorney Bach and admitted, "I should have asked for some help whether from him or the accountant when I knew I wasn't taking care of it properly."

         ¶9 The parties subsequently filed briefs discussing the seven contested counts. On August 8, 2017, the referee issued a report accepting the stipulation and finding that the OLR had met its burden of proof with respect to five of the seven contested counts. The referee found that Attorney Bauer had converted $376, 818.63. The referee found ...

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