Loan Shark Lawyer Gets License Revoked

An attorney who engaged in business transactions with three financially-unsophisticated client couples has had his license revoked by the Wisconsin Supreme Court.

Attorney Trewin usually loaned the couples money, often at relatively high interest rates (12-14%), starting with fairly small amounts and increasing the amount of the loans over time as the couples needed additional funds.  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.  Moreover, there were many errors in the documentation of the loans and the tracking of payments. 

In some instances, either there were no signed promissory notes and conflict waivers, or Attorney Trewin lost those documents since he was unable to produce them during this disciplinary proceeding.  In at least one other instance, the date on the conflict waiver was months apart from the date of the purportedly corresponding promissory note.  Also, when Attorney Trewin was able to produce a signed document purporting to be a conflict waiver, the description of the transaction in the conflict waiver was, at times, not even consistent with the loan terms set forth in the promissory note.  Further, the referee specifically found that the conflict waivers did not disclose all of the true facts regarding the transactions, did not provide any meaningful explanation of the disadvantages of entering into these transactions with the clients’ lawyer, and did not include a discussion of the alternatives available to the clients. 

Attorney Trewin’s haphazard manner of handling these transactions left the clients confused about which loans were outstanding, what payments they had made toward which loans, and the balances of their loans…

Ultimately, when the couples had difficulties making their payments to Attorney Trewin or to another creditor, he would persuade the couple to transfer their property over to him, with the promise that he would lease the property back to them and they could reacquire the property if they were current on their payments to him and could also pay a specified amount to him for their property.  The couples, however, were not in a financial condition where they could ever regain ownership of their property.  Nonetheless, because of Attorney Trewin’s actions, some couples continued to hold the mistaken belief that they really did retain ownership or control of the property even after they had transferred ownership of it to Attorney Trewin.  In the end, Attorney Trewin ended up with the title to the clients’ real property.

The court on sanction

We conclude that the revocation of Attorney Trewin’s license to practice law in this state is appropriate and required.  Attorney Trewin was already put on notice of the perils of engaging in transactions with clients in the Trewin I disciplinary proceeding.  He nonetheless continued to engage in such transactions without meeting the very strict requirements that protect clients from overreaching by more sophisticated attorneys.  Moreover, he used the knowledge he had gained from handling the clients’ legal matters to structure those transactions in a manner that ensured he would benefit and the clients would not.  Those transactions ultimately resulted in Attorney Trewin acquiring the clients’ property and enriching himself at their expense.  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.

(Mike Frisch)