No Retroactive Suspension For Cheating Business Partners

The Wisconsin Supreme Court has accepted a referee’s finding of misconduct by a previously-disciplined attorney but declined to grant retroactive credit.

The court imposed a prospective one-year suspension.

We conclude that the referee’s findings of fact are supported by satisfactory and convincing evidence. We also agree with the referee’s conclusions of law that Attorney Schoenecker engaged in professional misconduct, and that the seriousness of this misconduct warrants a one-year suspension of Attorney Schoenecker’s law license. We part ways with the referee in holding that, given the timing and seriousness of Attorney Schoenecker’s misconduct, the suspension of his law license should not be retroactive, but rather should be made effective as of the date of this order.

The attorney was suspended in 2011 and has not been reinstated.

The OLR’s amended complaint alleged, and the parties ultimately stipulated, that the misconduct in this case concerns Attorney Schoenecker’s involvement in a business partnership that he entered into in 2012 with two other individuals, M.M. and T.H. Attorney Schoenecker, on behalf of himself and his partners, established a limited liability company named GameMaster, LLC. Attorney Schoenecker drafted and filed the organizing documents, including the Articles of Organization and the Limited Liability Company Operating Agreement.

He admitted the violation

 In so doing, Attorney Schoenecker agreed not to dispute the OLR’s charge that, as Chief Executive Manager of GameMaster, LLC, he failed to account clearly or timely for capital contributions made by other members, withdrew excessive funds from GameMaster, LLC, and charged personal expenses to GameMaster, LLC, all without preapproval from his business partners, in violation of SCR 20:8.4(c). Attorney Schoenecker and the OLR jointly recommended that the court order a one-year license suspension imposed retroactively to the date he became eligible for reinstatement from his earlier disciplinary suspension, August 15, 2014, so that his earliest reinstatement date would be in August 2015. The stipulation did not explain the basis for the retroactive nature of the suspension.

No retroactive suspension

we have previously held that a retroactive suspension is generally not favored in the absence of some “compelling circumstance,” and we find no such compelling circumstance here…

Attorney Schoenecker dishonestly handled business funds well after his 2011 suspension for what we described as “a disturbing series of illegal and dishonest actions, which were designed to benefit him financially to the injury of his client, his law firm employer, and his creditors.”

The court split costs between the parties. (Mike Frisch)