Office of Lawyer Regulation v. Matthew S. MacLean

2016 WI 45
SUPREME COURT OF WISCONSIN
CASE NO.: 2015AP1433-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Matthew S. MacLean, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Matthew S. MacLean,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST MACLEAN
OPINION FILED: June 3, 2016
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
2016 WI 45
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2015AP1433-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Matthew S. MacLean, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant,
JUN 3, 2016
v.
Diane M. Fremgen
Clerk of Supreme Court
Matthew S. MacLean,
Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. We review the report and recommendation
of Referee Richard C. Ninneman that the license of Attorney
Matthew S. MacLean be suspended for two years for professional
misconduct and that Attorney MacLean pay the full costs of this
proceeding, which are $3,573.11 as of January 28, 2016. The
referee also recommends that, during the period of his
suspension, Attorney MacLean continue participation in the
No. 2015AP1433-D
Wisconsin Lawyers Assistance Program (WisLAP) monitoring
program.
¶2 After careful review of this matter, we adopt the
referee's findings of fact and conclusions of law. We agree
with the referee that a two-year suspension of Attorney
MacLean's license is an appropriate sanction for his misconduct.
We further agree that the full costs of the proceeding should be
assessed against the attorney, and we also agree that Attorney
MacLean should be required to continue participation in the
WisLAP monitoring program during the term of his suspension.
¶3 Attorney MacLean was admitted to practice law in
Wisconsin in 1998. He has no prior disciplinary history. He is
not currently practicing law and the State Bar of Wisconsin
lists his license status as "inactive."
¶4 On July 17, 2015, the Office of Lawyer Regulation
(OLR) filed a complaint alleging that Attorney MacLean committed
four counts of misconduct. The complaint alleged that between
June 1999 and March 2006, Attorney MacLean was employed by the
law firm of Michael, Best & Friedrich, LLP, first as an
associate and later as a contract partner. In 2006, Attorney
MacLean became the general counsel and chief compliance officer
for the investment firm Red Granite Advisors, LLC (Red Granite).
In late 2011, Red Granite was acquired by Ziegler Lotsoff
Capital Management, LLC (Ziegler). Red Granite continued as the
wholly owned subsidiary of Ziegler. During Attorney MacLean's
employment with Red Granite, he had access to and maintained the
accounts payable records for the company.
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No. 2015AP1433-D
¶5 The complaint alleged that between March 2006 and
December 2014, Michael, Best & Friedrich sublet office space and
several parking spaces at its Milwaukee location to Red Granite
pursuant to a written sublease agreement. The complaint further
alleged that in 2010, BrickStix LLC (BrickStix) was formed to
commercialize a product designed by Attorney MacLean's minor
son. The complaint further alleged that Attorney MacLean
drafted the Articles of Organization for BrickStix, which listed
Attorney MacLean, his wife, and another man as the organizing
members.
¶6 In January 2011, Attorney MacLean and his wife opened
a checking account at Park Bank, titled in the name of
BrickStix. Attorney MacLean wrote out substantially all of the
deposits to and checks from the BrickStix account. The
complaint alleged that Attorney MacLean failed to clearly and
consistently keep the finances and credit card accounts
associated with businesses in which he was involved separate and
distinct from other businesses and from his and his family's
personal finances.
¶7 The OLR's complaint further alleged that between March
2006 and September 2013, Attorney MacLean misappropriated more
than $450,000 belonging to Red Granite and/or Ziegler. The
complaint alleged that to facilitate and/or hide his
misappropriation of funds from Red Granite and/or Ziegler,
Attorney MacLean obtained a lock box and caused payments due
from Red Granite and/or Ziegler to Michael, Best & Friedrich to
be directed to the lock box, and he created and caused
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No. 2015AP1433-D
fraudulent invoices purporting to be from Michael, Best &
Friedrich to be presented to Red Granite and Ziegler. The
complaint alleged that Attorney MacLean caused checks to be
issued by Red Granite or Ziegler payable to Attorney MacLean,
BrickStix, or third parties, but falsely identified the checks
in Red Granite's and Ziegler's accounts payable records as being
payable to a legitimate vendor, including Michael, Best &
Friedrich.
¶8 The complaint alleged that Attorney MacLean caused
BrickStix to use more than $5,000 of misappropriated funds to
pay BrickStix's expenses. In the summer of 2012, Attorney
MacLean approached Ziegler's chief operating officer, S.R.,
about S.R. purchasing a membership interest in BrickStix,
because BrickStix required additional capital, including funds
for production and patent expenses. Between July 2012 and March
2013, in furtherance of inducing S.R. to purchase a membership
interest in BrickStix, Attorney MacLean provided S.R. with
inaccurate and misleading information about BrickStix's
financial condition. Relying on the misleading and inaccurate
information, in March 2013 S.R. wired $50,000 into the BrickStix
account. The money was intended as the purchase price for an
LLC of which S.R. was president, to purchase a membership
interest in BrickStix. The OLR's complaint alleged that if
Attorney MacLean had provided accurate information regarding the
financial condition of BrickStix and Attorney MacLean's actions
related to the BrickStix account, S.R. would not have pursued
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No. 2015AP1433-D
purchasing an interest in BrickStix and would not have caused
the LLC to do so.
¶9 The complaint alleged that Attorney MacLean, without
authorization from the appropriate persons associated with Red
Granite, opened a bank account at Guaranty Bank in the name of
Red Granite to help facilitate or hide his misappropriation of
funds. Between July 2013 and September 2013, Attorney MacLean
caused several checks to be issued from the BrickStix account
payable to Red Granite and then caused the checks to be
deposited in the dummy account at Guaranty Bank. Attorney
MacLean, as the general counsel of BrickStix, did not inform the
managing member, the board of directors, or any other members
that he deposited funds he misappropriated from Red Granite
and/or Ziegler into the BrickStix account. He also did not
inform the managing member, board of directors, or any other
members of BrickStix that he had used the BrickStix account in
furtherance of his course of conduct to misappropriate funds
from Red Granite and/or Ziegler, nor did he inform the managing
member, board of directors, or any other members of BrickStix
that he used funds he misappropriated from Red Granite for the
benefit of BrickStix.
¶10 The OLR's complaint alleged that a company called
Stifel acquired Ziegler and demanded $458,000 restitution from
Attorney MacLean. On or about February 2015, Attorney MacLean
and others paid Stifel cash and assigned common stock back to
Stifel in the total amount of $404,750.04. Attorney MacLean
withheld over $52,000, claiming entitlement under an April 2014
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No. 2015AP1433-D
severance agreement. Neither Stifel nor Ziegler was aware of
Attorney MacLean's misappropriations at the time the severance
agreement was signed.
¶11 The OLR's complaint alleged the following counts of
misconduct:
COUNT ONE: By (i) engaging in a course of conduct that
included misappropriating funds belonging to Red
Granite and/or Ziegler; and (ii) engaging in a course
of conduct to hide his misappropriations and related
wrongful conduct, [Attorney] MacLean violated SCR
20:8.4(c).1
COUNT TWO: By engaging in a course of conduct that
included using funds misappropriated from Red Granite
for the benefit of BrickStix, [Attorney] MacLean
violated SCR 20:8.4(c).
COUNT THREE: By engaging in a course of conduct
intended to induce a third party to purchase an
interest in BrickStix through the use of misleading
and inaccurate information regarding BrickStix's
financial condition, and/or the omission of
information related to [Attorney] MacLean's deposit of
funds misappropriated from Red Granite and/or Ziegler
in the BrickStix Account, [Attorney] MacLean violated
SCR 20:8.4(c).
COUNT FOUR: [Attorney] MacLean acted under a
concurrent conflict of interest by representing
BrickStix as its General Counsel while at the same
time engaging in a course of conduct that included:
(i) failing to keep BrickStix's finances separate from
his personal finances and the finances of Red Granite,
thereby causing confusion in the handling of credit
card accounts and payments from the BrickStix Account;
(ii) causing funds [Attorney] MacLean misappropriated
from Red Granite and/or Ziegler to be deposited in the
1
SCR 20:8.4(c) provides: "It is professional misconduct
for a lawyer to . . . . engage in conduct involving dishonesty,
fraud, deceit or misrepresentation."
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No. 2015AP1433-D
BrickStix Account; (iii) using the BrickStix Account
as part of his course of conduct intended to
misappropriate funds from Red Granite and/or Ziegler;
and/or (iv) using funds misappropriated from Red
Granite for the benefit of BrickStix, and all without
notifying the Managing Member, the Board of Directors,
or the other Members of BrickStix, thereby violating
SCR 20:1.7(a)(2).2
¶12 On October 1, 2015, the parties signed a stipulation
whereby Attorney MacLean entered a plea of no contest to the
misconduct counts alleged in the complaint. The parties agreed
that the facts stated in the complaint could be used as a
2
SCR 20:1.7(a)(2) provides:
(a) Except as provided in par. (b), a lawyer
shall not represent a client if the representation
involves a concurrent conflict of interest. A
concurrent conflict of interest exists if . . . .
(2) there is a significant risk that the
representation of one or more clients will be
materially limited by . . . a personal interest of the
lawyer.
(b) Notwithstanding the existence of a concurrent
conflict of interest under par. (a), a lawyer may
represent a client if:
(1) the lawyer reasonably believes that the
lawyer will be able to provide competent and diligent
representation to each affected client;
(2) the representation is not prohibited by law;
(3) the representation does not involve the
assertion of a claim by one client against another
client represented by the lawyer in the same
litigation or other proceeding before a tribunal; and
(4) each affected client gives informed consent,
confirmed in a writing signed by the client.
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No. 2015AP1433-D
factual basis by the referee to make a determination of
misconduct. The parties agreed that Attorney MacLean could make
arguments and produce mitigating factors and other evidence
regarding sanctions.
¶13 As part of the stipulation, Attorney MacLean asserted
a number of mitigating factors, including that he voluntarily
withdrew from the practice of law in May 2014, upon reporting
his conduct to the OLR, and he declined an employment
opportunity at a law firm to address his situation and to
prevent the law firm from being associated with his conduct.
Attorney MacLean averred that he sought assistance from WisLAP,
which led to his being diagnosed with bipolar disorder.
According to his treating psychiatrist and treating therapist,
Attorney MacLean's conduct at issue in this matter is the result
of his bipolar disorder. Attorney MacLean says he changed his
State Bar of Wisconsin membership to inactive status effective
October 31, 2014. He says he has cooperated with the
investigations of his conduct by the OLR and others; he has
expressed remorse, regret, and concern for the victims of his
conduct; and he has used family resources to make full
restitution and also used family funds to repay the aborted
investment in his company.
¶14 The hearing before the referee was held on December
10, 2015. Attorney MacLean was the only witness to testify. At
the hearing, the OLR reduced the requested sanction from
revocation to a three-year suspension. Attorney MacLean sought
a shorter suspension or asked that the suspension commence at
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No. 2015AP1433-D
the time he self-reported his conduct to the OLR and ceased
practicing law in May 2014. Based on the parties' stipulation,
the referee found that the OLR had met its burden of proving by
clear, satisfactory, and convincing evidence that Attorney
MacLean committed the four counts of misconduct set forth in the
OLR's complaint. The referee recommended that Attorney
MacLean's license to practice law in Wisconsin be suspended for
two years, commencing with the date of this court's order.
¶15 The referee pointed out that Attorney MacLean has not
practiced law since he self-reported his misconduct in May of
2014. The referee noted that following a two-year suspension,
there will be an additional passage of time during which
Attorney MacLean will have to petition for reinstatement, have a
hearing before a referee, and ultimately have this court act on
the petition. The referee said when all is said and done,
Attorney MacLean will probably have been out of the practice of
law for nearly five years. The referee said that period of time
will satisfy the OLR's concerns of impressing Attorney MacLean
with the seriousness of his misconduct and ensuring that he
continues to cooperate with WisLAP in the treatment of his
bipolar disorder. The referee also recommends that, during the
period of Attorney MacLean's suspension, he be required to
continue participation in the WisLAP monitoring program and
submit periodic reports to the OLR as to his continued
cooperation with his treatment recommendations.
¶16 A referee's findings of fact are affirmed unless
clearly erroneous. Conclusions of law are reviewed de novo.
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No. 2015AP1433-D
See In re Disciplinary Proceedings Against Eisenberg, 2004 WI
14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747. The court may impose
whatever sanction it sees fit, regardless of the referee's
recommendation. See In re Disciplinary Proceedings Against
Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686.
¶17 There is no showing that any of the referee's findings
of fact are clearly erroneous. Accordingly, we adopt them. We
also agree with the referee's conclusions of law that Attorney
MacLean violated the supreme court rules enumerated above.
¶18 Upon careful review of the matter, we agree with the
referee's recommendation for a two-year suspension of Attorney
MacLean's license to practice law in Wisconsin. Attorney
MacLean's misconduct was serious and warrants a significant
penalty. However, Attorney MacLean did present a number of
mitigating factors, including the fact that he self-reported his
conduct to the OLR, he sought assistance from WisLAP and
voluntarily submitted to WisLAP for monitoring of his treatment
for bipolar disorder, he made full restitution, and he
cooperated with the investigation into his conduct. The referee
commented that from the referee's observation at the hearing,
Attorney MacLean "clearly appeared to be remorseful, regretful
and concerned for the victims of his misconduct." In addition,
Attorney MacLean's lack of previous disciplinary history also
warrants some consideration.
¶19 We agree with the referee that a two-year suspension
is an appropriate sanction and is generally consistent with
prior disciplinary decisions. For example, in In re
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No. 2015AP1433-D
Disciplinary Proceedings Against Dahle, 2015 WI 29, 361
Wis. 2d 430, 862 N.W.2d 582, an attorney with no previous
disciplinary history was suspended for two years and six months
for multiple counts of misconduct, including violations of SCR
20:8.4(c). Attorney Dahle was found to have misappropriated
over $400,000 in client funds. In addition, in In re
Disciplinary Proceedings Against Ramthun, 2015 WI 94, 365
Wis. 2d 7, 869 N.W.2d 775, an attorney was suspended for two
years and six months for multiple counts of misconduct,
including four counts of violating SCR 20:8.4(c). Attorney
Ramthun had no prior disciplinary history other than a brief
temporary suspension for failure to cooperate with the OLR's
investigation into two of the matters giving rise to the
proceeding that resulted in the two-and-a-half-year suspension.
¶20 Finally, we agree with the referee that, during the
term of his suspension, Attorney MacLean should be required to
continue monitoring with WisLAP and should be required to submit
periodic reports to the OLR showing his continued cooperation
with his monitoring and treatment recommendations. We also
agree that Attorney MacLean should be required to pay the full
costs of this proceeding.
¶21 IT IS ORDERED that the license of Matthew S. MacLean
to practice law in Wisconsin is suspended for a period of two
years, effective the date of this order.
¶22 IT IS FURTHER ORDERED that during the period of his
suspension, Matthew S. MacLean shall continue participation in
the Wisconsin Lawyers Assistance Program and shall submit
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No. 2015AP1433-D
quarterly reports to the Office of Lawyer Regulation showing his
continued cooperation with monitoring and treatment
recommendations of WisLAP.
¶23 IT IS FURTHER ORDERED that within 60 days of the date
of this order, Matthew S. MacLean shall pay to the Office of
Lawyer Regulation the costs of this proceeding, which are
$3,573.11. If the costs are not paid within the time specified,
and absent a showing to this court of his inability to pay the
costs within that time, the license of Matthew S. MacLean to
practice law in Wisconsin shall remain suspended until further
order of the court.
¶24 IT IS FURTHER ORDERED that, to the extent he has not
already done so, Matthew S. MacLean shall comply with the
provisions of SCR 22.26 concerning the duties of a person whose
license to practice law in Wisconsin has been suspended.
¶25 IT IS FURTHER ORDERED that compliance with all
conditions of this order is required for reinstatement. See SCR
22.28(3).
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No. 2015AP1433-D
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