Case Title: Office of Lawyer Regulation v. Michael A. Gral

Citation: 2010 WI 14

Docket Number: 

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2010-03-09T00:00:00Z

Document:
2010 WI 14 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2006AP1021-D 
COMPLETE TITLE: 
 
 
In the Matter of Disciplinary Proceedings 
Against Michael A. Gral, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant, 
     v. 
Michael A. Gral, 
          Respondent. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST GRAL 
 
 
OPINION FILED: 
March 9, 2010   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
        
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
        
 
COUNTY: 
        
 
JUDGE: 
        
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
      
 
 
 
 
2010 WI 14
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2006AP1021-D  
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Michael A. Gral, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant, 
 
     v. 
 
Michael A. Gral, 
 
          Respondent. 
 
FILED 
 
MAR 9, 2010 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
 
 
ATTORNEY reinstatement proceeding.   Reinstatement granted 
upon conditions.  
 
¶1 
PER 
CURIAM.   We 
review 
a 
referee's 
report 
recommending that Michael A. Gral's license to practice law in 
Wisconsin be reinstated.  No party has appealed from the report 
and recommendation.  Consequently, the court's review proceeds 
under SCR 22.33(3).1   
                                                 
1 SCR 22.33(3) provides, "If no appeal is timely filed, the 
supreme 
court 
shall 
review 
the 
referee's 
report, 
order 
reinstatement, with or without conditions, deny reinstatement, 
or order the parties to file briefs in the matter." 
No. 
2006AP1021-D   
 
2 
 
¶2 
We 
adopt 
the 
referee's 
findings 
of 
fact 
and 
conclusions of law and conclude that Attorney Gral's license to 
practice law should be reinstated upon conditions to be 
discussed later.  We further direct Attorney Gral to pay the 
costs of the reinstatement proceeding, which total $4,179.83 as 
of September 29, 2009. 
¶3 
Attorney 
Gral 
was 
admitted 
to 
practice 
law 
in 
Wisconsin in 1985.  From August 1994 through July 2004 he 
practiced law at Michael Best & Friedrich LLP ("MBF").  In 
October 2005 he voluntarily advised the State Bar of Wisconsin 
that he was changing his membership status from active to 
inactive. 
¶4 
This reinstatement proceeding stems from a three-year 
suspension of Attorney Gral's license to practice law arising 
out of his federal court conviction for one count of mail fraud, 
in violation of 18 U.S.C. § 1341 (2005).  The United States 
Attorney for the Eastern District of Wisconsin issued a one-
count information against Attorney Gral on December 14, 2005.  
On that same date, Attorney Gral and the government filed a plea 
agreement in which Attorney Gral agreed to plead guilty to the 
one-count information.  Attorney Gral entered a plea the same 
day.  On June 15, 2006, the federal court sentenced Attorney 
Gral to two years imprisonment, to be followed by three years of 
supervised release.  Attorney Gral was released from Oxford 
Correctional Institution in the spring of 2008.  He was 
discharged from supervision and the proceedings in the federal 
court case were terminated on February 1, 2010.   
No. 
2006AP1021-D   
 
3 
 
¶5 
In January 2006 Attorney Gral advised the Office of 
Lawyer Regulation (OLR) that he agreed to a summary suspension 
of his law license pending the conclusion of disciplinary 
proceedings arising out of the federal mail fraud conviction.  
On February 27, 2006, this court summarily suspended Attorney 
Gral's license.  In April 2006 the OLR issued a complaint 
against Attorney Gral charging a violation of SCR 20:8.4(b), 
which provides that it is professional misconduct for a lawyer 
to "commit a criminal act that reflects adversely on the 
lawyer's honesty, trustworthiness or fitness as a lawyer in 
other respects."   
¶6 
In July of 2006 the OLR and Attorney Gral entered into 
a stipulation whereby Attorney Gral amended his previously filed 
answer to the OLR's complaint and entered a plea of "no contest" 
to the allegations in the complaint.  The stipulation set forth 
the background of the transactions that led to the federal mail 
fraud 
conviction. 
 
The 
stipulation 
noted 
that 
when 
the 
transactions occurred, Attorney Gral was an attorney at MBF and 
one of MBF's clients was Bielinski Bros. Builders, Inc., and 
related entities, which was owned by Frank and Harry Bielinski.  
Attorney Gral's principal contact at Bielinski Bros. was Robert 
Brownell, who served in various executive positions including 
serving as Bielinski's chief executive officer for more than 
three years.   
¶7 
Attorney Gral stipulated that he entered into real 
estate transactions with Brownell.  In the course of the 
transactions, Brownell improperly took funds from the Bielinskis 
No. 
2006AP1021-D   
 
4 
 
without their knowledge.  Brownell led Attorney Gral to believe 
that the Bielinskis were aware of the transactions and that the 
Bielinski entities had been repaid.  Attorney Gral did not 
contact the Bielinskis to confirm that they were aware their 
funds had been used nor did he inquire whether the funds had 
been repaid.  In fact, the Bielinskis were not aware of and had 
not approved the use of their funds, nor had they been repaid by 
Brownell.  In the stipulation, Attorney Gral admitted that his 
acts were inappropriate since he did not contact the Bielinskis.  
Attorney Gral admitted that when he became aware of certain 
facts in the transactions relating to the Bielinskis, he failed 
to confirm the information with them, and he also admitted that 
his actions had the effect of placing his own financial 
interests ahead of his clients' interests. 
¶8 
In a sentencing memorandum filed by the government in 
the federal court action, the government said that, "Gral's 
wrongdoing 
generally 
involves 
'sins 
of 
omission.'" 
 
The 
government also noted that Attorney Gral did not directly obtain 
any money from the Bielinskis, that Brownell was the instigator 
of the overall fraud against the Bielinskis, and that many 
aspects of Brownell's fraud did not involve Attorney Gral.   
¶9 
Prior to the federal court's imposition of sentence in 
the criminal matter, Attorney Gral entered into a resolution 
with the Bielinskis and MBF.  As part of that resolution, 
Attorney Gral agreed to pay $4,489,533.  Attorney Gral paid 
$1,200,000 to the Bielinskis in June of 2006.  In order to make 
No. 
2006AP1021-D   
 
5 
 
this payment Attorney Gral liquidated a large portion of his 
retirement account and received a loan from his father.   
¶10 On February 16, 2007, this court suspended Attorney 
Gral's license to practice law for three years, retroactive to 
February 27, 2006, the date on which the court summarily 
suspended Attorney Gral's license.  See In re Disciplinary 
Proceedings Against Gral, 2007 WI 22, 299 Wis. 2d 160, 727 
N.W.2d 495.   
¶11 Attorney Gral filed a petition for reinstatement of 
his law license in March 2009.  The petition indicated that if 
his license is reinstated, Attorney Gral intends to engage in 
the private practice of law.  The OLR filed a response to the 
petition for reinstatement in July 2009.  James Winiarski was 
appointed referee in the matter.  A hearing was held on Attorney 
Gral's reinstatement petition on August 18, 2009.   
¶12 Attorney Gral and a number of character witnesses 
testified in support of his reinstatement petition.  Attorney 
Gral testified that as of the date of the hearing he had paid 
the Bielinskis approximately $2.7 million.  He explained that he 
had been unable to make a $600,000 payment to the Bielinskis 
that was due on July 1, 2009, because he did not have sufficient 
liquid assets.  He said he had advised the OLR prior to July 1, 
2009, that he would be unable to make the payment.  He also said 
that his next payment to the Bielinskis, also in the amount in 
the $600,000, was due July 1, 2010, and that scheduled interest 
on that payment would be in the approximate amount of $500,000.  
Attorney Gral said he was very disappointed he had been unable 
No. 
2006AP1021-D   
 
6 
 
to make the July 2009 payment, but that the obligation with the 
Bielinskis had been entered into in 2006 and was based on assets 
he owned at that time.  He said the 2009 real estate market was 
very different than it had been in 2006.   
¶13 Attorney Gral explained that he earns money by 
investing in real estate, adding value to it, and ultimately 
selling or refinancing it to generate proceeds.  He said he had 
expected to make payments to the Bielinskis through the 
liquidation of assets and refinancing those assets, but current 
real estate markets were not conducive to trying to raise the 
funds that would be needed to make the payments.  When asked how 
he intended to ensure that restitution would be paid to the 
Bielinskis by July of 2010, Attorney Gral said he intended to 
continue to liquidate real estate assets and other assets to use 
as a source of funds.  He said he was working every day on 
making the payment and that he would honor the payment just as 
he had done with his past obligations. 
¶14 The referee questioned Attorney Gral about how he 
intended to avoid the potential for conflict in the future if he 
was going to be a real estate investor and was going to be 
representing clients in real estate transactions.  Attorney 
Gral's response was, "Not invest with clients."   
¶15 Attorney Jonathan Margolies, general counsel of MBF, 
made a statement authorized by MBF saying that the entire firm 
opposed Attorney Gral's reinstatement.  Attorney Margolies 
testified that upon discovering Attorney Gral's activities, MBF 
returned over one million dollars in fees to the Bielinskis and 
No. 
2006AP1021-D   
 
7 
 
spent years and additional hundreds of thousands of dollars 
investigating 
the 
matter 
and 
cooperating 
with 
the 
U.S. 
Attorney's office.  MBF also entered into a confidential 
settlement with the Bielinskis.  Attorney Margolies said in 
addition to harming the reputation of the law firm, Attorney 
Gral also harmed the reputation of all lawyers in the state.   
¶16 On 
cross-examination 
by 
Attorney 
Gral's 
counsel, 
Attorney Margolies admitted that he had not had any contact with 
Attorney Gral since the sentencing occurred in June of 2006.  He 
also admitted that nothing new had occurred since that time, he 
was not offering any new facts, and the information he mentioned 
at the reinstatement hearing had previously been given to the 
government prior to Attorney Gral's sentencing.  The Bielinskis 
also oppose Attorney Gral's reinstatement. 
¶17 Another MBF attorney, Stephen Means, submitted a 
letter as part of the reinstatement proceeding saying that 
Attorney Gral's crimes "were the result of conscious, deliberate 
acts over a period of time that were motivated by personal 
greed.  This man should never practice law again."  
¶18 The Board of Bar Examiners filed a memorandum stating 
that on the basis of the materials Attorney Gral had submitted, 
it recommended his reinstatement.   
¶19 The referee issued his report and recommendation on 
September 14, 2009.  The referee noted that the standards that 
apply 
to 
all 
petitions 
seeking 
reinstatement 
after 
a 
disciplinary suspension or revocation are set forth in SCR 
No. 
2006AP1021-D   
 
8 
 
22.31(1).2  The referee also noted that SCR 22.31(1)(c) 
incorporates the statements that a petition for reinstatement 
must contain pursuant to SCR 22.29(4).3   
                                                 
2 SCR 22.31(1) provides:  Reinstatement hearing. 
The petitioner has the burden of demonstrating, 
by clear, satisfactory, and convincing evidence, all 
of the following: 
(a) That he or she has the moral character to 
practice law in Wisconsin. 
(b) That his or her resumption of the practice of 
law will not be detrimental to the administration of 
justice or subversive of the public interest. 
(c) That 
his or her representations in the 
petition, including the representations required by 
SCR 
22.29(4)(a) 
to 
[(4m)] 
and 
22.29(5), 
are 
substantiated. 
(d) That he or she has complied fully with the 
terms of the order of suspension or revocation and 
with the requirements of SCR 22.26. 
3 SCR 22.29(4) states the petition for reinstatement shall 
show all of the following: 
(a) The 
petitioner 
desires 
to 
have 
the 
petitioner's license reinstated. 
(b) The petitioner has not practiced law during 
the period of suspension or revocation. 
(c) The petitioner has complied fully with the 
terms of the order of suspension or revocation and 
will 
continue 
to 
comply 
with 
them 
until 
the 
petitioner's license is reinstated. 
(d) The petitioner has maintained competence and 
learning in the law by attendance at identified 
educational activities. 
(e) The petitioner's conduct since the suspension 
or revocation has been exemplary and above reproach. 
No. 
2006AP1021-D   
 
9 
 
¶20 The referee concluded that Attorney Gral met his 
burden of proof in all respects and that his license should be 
reinstated "with the condition that he be prohibited from 
representing any clients with whom he, or any member of his 
immediate family, has in the past or is currently involved with 
by way of personal real estate investments, of any kind or 
nature, whether directly or through any business entity."  The 
referee also recommended that Attorney Gral be responsible for 
the full costs of the reinstatement proceeding.   
                                                                                                                                                             
(f) The petitioner has a proper understanding of 
and attitude toward the standards that are imposed 
upon members of the bar and will act in conformity 
with the standards. 
(g) The petitioner can safely be recommended to 
the legal profession, the courts and the public as a 
person fit to be consulted by others and to represent 
them and otherwise act in matters of trust and 
confidence and in general to aid in the administration 
of justice as a member of the bar and as an officer of 
the courts. 
(h) The petitioner has fully complied with the 
requirements set forth in SCR 22.26. 
(j) The petitioner's proposed use of the license 
if reinstated. 
(k) A full description of all of the petitioner's 
business activities during the period of suspension or 
revocation. 
(4m) The petitioner has made restitution to or 
settled all claims of persons injured or harmed by 
petitioner's misconduct, including reimbursement to 
the Wisconsin lawyers' fund for client protection for 
all payments made from that fund, or, if not, the 
petitioner's explanation of the failure or inability 
to do so. 
No. 
2006AP1021-D   
 
10 
 
¶21 Attorney Gral filed a response to the referee's report 
and recommendation with respect to the referee's proposed 
condition of reinstatement.  Attorney Gral expressed concern 
that 
as 
proposed, 
the 
condition 
would 
pose 
problems 
in 
monitoring, both for him and for the OLR.  He also asserted that 
the condition proposed by the referee was vague and overbroad.  
Attorney Gral offered the following condition of reinstatement 
in place of the one proposed by the referee: 
 
In order to better monitor compliance with the 
requirements of SCR 20:1.8(a), for a period of three 
years after the date of his reinstatement, the 
Petitioner shall do the following: 
 
(1) File with the Office of Lawyer Regulation 
("OLR") a written notice within 30 days of entering 
into any agreement with a client under SCR 20:1.8(a); 
this notice shall contain a general description of the 
transaction.  The Petitioner shall provide copies of 
any disclosures and consent documents upon request of 
OLR, who shall keep the identity of the client 
confidential; and 
 
(2) File an annual report with OLR during the 
term of this condition on or before July 1 of each 
year summarizing his compliance with any waivers 
obtained under SCR 20:1.8(a). 
¶22 Having 
independently 
considered 
the 
matter, 
we 
determine that the referee's findings of fact are not clearly 
erroneous.  See In re Disciplinary Proceedings Against Carroll, 
2004 WI 19, ¶9, 269 Wis. 2d 172, 675 N.W.2d 792 (referee's 
factual findings affirmed unless clearly erroneous).  We also 
agree with the referee that based upon those factual findings, 
Attorney 
Gral 
has 
satisfied 
the 
requirements 
for 
the 
No. 
2006AP1021-D   
 
11 
 
reinstatement of his license to practice law in Wisconsin.  Id. 
(referee's conclusions of law reviewed on a de novo basis). 
¶23 Although the referee recommended that Attorney Gral's 
license be reinstated, the referee identified several areas of 
concern.  First, the referee noted that Attorney Gral's former 
law firm strongly opposes reinstatement.  Second, the referee 
commented that since Attorney Gral entered a guilty plea in the 
criminal case and he entered into a stipulation, resulting in 
the suspension of his law license in the attorney disciplinary 
case, there was never a trial or a hearing which examined his 
criminal conduct.  The referee said when he questioned Attorney 
Gral during the reinstatement hearing as to how he could claim 
he simply made errors in judgment and omission, as compared to 
undertaking deliberate actions for his own selfish financial 
purposes, his answers were ambiguous.   
¶24 The referee said while it was not his job to second-
guess the resolution of the criminal case or the facts to which 
Attorney Gral stipulated which led to his three-year suspension, 
it was the referee's opinion that Attorney Gral did much more 
than simply make errors in judgment or omission as he claims.  
The referee said such an inquiry was relevant on the issue of 
Attorney Gral's fitness to be reinstated to the practice of law 
since it relates not only to his "understanding of and attitude 
toward the standards that are imposed upon members of the bar," 
but it also bears upon whether he can "safely be recommended to 
the legal profession, the courts, and the public as a person fit 
to be consulted by others and to represent them and otherwise 
No. 
2006AP1021-D   
 
12 
 
act in matters of trust and confidence and in general to aid in 
the administration of justice as a member of the bar and as an 
officer of the courts."   
¶25 The referee said: 
Given Gral's exemplary conduct since his criminal 
activities, I do not believe any of the concerns I 
noted above rise to the level of preventing his 
reinstatement at this time.  Despite his criminal 
conduct, Gral has done everything possible since his 
criminal conduct became known to comply with all 
federal orders 
and judgments, and all Wisconsin 
Supreme Court rules.  In addition, as the federal 
court noted, Gral went beyond simply complying with 
court orders, given that he also affirmatively sought 
to cooperate in every manner possible with federal 
authorities.  
Gral has repeatedly accepted full responsibility 
for his criminal activities.  While he is loath to 
characterize 
his 
criminal 
conduct 
as 
involving 
deliberate acts of a fraudulent nature, he has 
fulfilled all the obligations imposed on him by the 
federal court.  He has also fulfilled all the 
conditions precedent for reinstatement under Wisconsin 
Supreme Court rules.  
In relation to the missed restitution payment, I 
note the substantial amounts he has already paid in 
restitution, fines and costs, at both the federal and 
state level.  I also note the current economy, given 
that Gral's source of funds for most payments have 
been 
primarily 
from 
his 
personal 
real 
estate 
investments. 
 
Bielinski 
Brothers 
presumably 
has 
recourse under the civil settlement agreement if all 
payments are not ultimately made by Gral. 
¶26 Although we share some of the concerns raised by the 
referee, 
particularly 
MBF's 
and 
the 
Bielinskis' 
strong 
opposition to the reinstatement petition, there is no basis on 
which to find that the referee's factual findings were clearly 
erroneous.  Since the referee's conclusions of law flow from 
No. 
2006AP1021-D   
 
13 
 
those factual findings, we agree that Attorney Gral should be 
reinstated to the practice of law in this state.  We also concur 
with the referee that Attorney Gral's reinstatement should be 
subject to conditions.  While Attorney Gral argues that the 
conditions proposed by the referee are too stringent, we find 
the alternate conditions proposed by Attorney Gral to be 
insufficient to ensure that he will not repeat the behavior that 
led to his criminal conviction and the suspension of his law 
license. 
¶27 We agree with Attorney Gral that the referee's 
proposed condition is overbroad.  Prohibiting Attorney Gral from 
ever representing clients with whom members of his immediate 
family had real estate investment dealings could have a chilling 
effect on his practice and seems to go beyond what is required 
to ensure that Attorney Gral does not repeat his past mistakes. 
However, we do not agree with Attorney Gral's proposal that he 
should 
immediately 
be 
allowed 
to 
enter 
into 
business 
transactions with clients, provided he obtain conflict waivers 
and notify the OLR. 
¶28 While SCR 20:1.8 does permit attorneys to engage in 
business 
transactions 
with 
clients, 
the 
rule 
sets 
forth 
stringent requirements for such transactions, including giving 
full disclosure to the client and obtaining informed consent 
from the client.  Even when these requirements are scrupulously 
followed, attorneys should not enter into such transactions 
lightly.  The ABA Comment to the Model Rule which forms the 
basis for SCR 20:1.8 states, "A lawyer's legal skill and 
No. 
2006AP1021-D   
 
14 
 
training, together with the relationship of trust and confidence 
between 
lawyer 
and 
client, 
create 
the 
possibility 
of 
overreaching when the lawyer participates in a business, 
property or financial transaction with a client; . . . ."  This 
was precisely what led to Attorney Gral's criminal conviction 
and the suspension of his law license.  Given his past behavior, 
we have misgivings about ever allowing Attorney Gral to enter 
into business relationships with clients, but we conclude that 
imposing a lifelong prohibition on his ability to enter into 
such transactions may be excessive.  Accordingly, we impose 
conditions that represent a sort of middle ground between those 
proposed by the referee and those proposed by Attorney Gral.  
¶29 In order to protect clients or potential clients and 
in order to ensure that Attorney Gral's past misconduct is not 
repeated, we deem it appropriate to impose the following 
conditions on the reinstatement of his license to practice law 
in Wisconsin: 
• 
During 
the 
first 
three-year 
period 
after 
his 
reinstatement, Attorney Gral shall be prohibited from 
representing any clients with whom he has in the past 
or is currently involved with by way of personal real 
estate investments, of any kind or nature, whether 
directly or through any business entity.  
• 
For a period beginning during the fourth year after 
his 
reinstatement, 
until 
six 
years 
after 
his 
reinstatement, Attorney Gral shall file with the OLR a 
written notice within ten days of entering into any 
No. 
2006AP1021-D   
 
15 
 
agreement with a client under SCR 20:1.8(a); this 
notice shall contain a general description of the 
transaction.  Attorney Gral shall provide copies of 
any disclosures and consent documents upon request of 
OLR, who shall keep the identity of the clients 
confidential. 
• 
Attorney Gral shall file an annual report with OLR 
during the term of this condition, on or before July 1 
of each year, summarizing his compliance with any 
waivers obtained under SCR 20:1.8(a). 
¶30 IT IS ORDERED that the petition for reinstatement of 
the license of Michael A. Gral to practice law in Wisconsin is 
granted, effective the date of this order. 
¶31 IT IS FURTHER ORDERED that the reinstatement of 
Michael A. Gral's license to practice law be subject to the 
following conditions: 
A. 
During 
the 
first 
three-year 
period 
after 
his 
reinstatement, 
Attorney 
Gral 
shall 
be 
prohibited 
from 
representing any clients with whom he has in the past or is 
currently 
involved 
with 
by 
way 
of 
personal 
real 
estate 
investments, of any kind or nature, whether directly or through 
any business entity.  
B. 
For a period beginning during the fourth year after 
his reinstatement, until six years after his reinstatement, 
Attorney Gral shall file with the Office of Lawyer Regulation a 
written notice within ten days of entering into any agreement 
with a client under SCR 20:1.8(a); this notice shall contain a 
No. 
2006AP1021-D   
 
16 
 
general description of the transaction.  Attorney Gral shall 
provide copies of any disclosures and consent documents upon 
request of the Office of Lawyer Regulation, who shall keep the 
identity of the clients confidential. 
C. 
Attorney Gral shall file an annual report with the 
Office of Lawyer Regulation during the term of this condition, 
on or before July 1 of each year, summarizing his compliance 
with any waivers obtained under SCR 20:1.8(a). 
¶32 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Michael A. Gral shall pay to the Office of Lawyer 
Regulation the costs of this proceeding.  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 Michael A. Gral to practice law in Wisconsin shall be 
suspended until further order of the court. 
 
No. 
2006AP1021-D   
 
 
 
1