2014 WI 100

SUPREME COURT OF WISCONSIN

CASE NO.: 2011AP584-D 

COMPLETE TITLE: In the Matter of Disciplinary Proceedings 

Against Michael D. Mandelman, Attorney at Law:

Office of Lawyer Regulation,

 Complainant-Respondent,

 v.

Michael D. Mandelman,

 Respondent-Appellant. 

DISCIPLINARY PROCEEDINGS AGAINST MANDELMAN

OPINION FILED: August 1, 2014

SUBMITTED ON BRIEFS: 

ORAL ARGUMENT: 

SOURCE OF APPEAL:

COURT: 

COUNTY:

JUDGE:

JUSTICES:

CONCURRED: 

DISSENTED: 

NOT PARTICIPATING: 

ATTORNEYS:

For the respondent-appellant, there were briefs by Spiros 

S. Nicolet and Nicolet Law Offices, Milwaukee.

For the complainant-respondent, there was a brief by Julie 

M. Spoke and the Office of Lawyer Regulation. 
2014 WI 100

NOTICE

This opinion is subject to further 

editing and modification. The final 

version will appear in the bound 

volume of the official reports. 

No. 2011AP584-D

STATE OF WISCONSIN : IN SUPREME COURT

In the Matter of Disciplinary Proceedings 

Against Michael D. Mandelman, Attorney at Law:

Office of Lawyer Regulation,

 Complainant-Respondent,

 v.

Michael D. Mandelman,

 Respondent-Appellant.

FILED

AUG 1, 2014

Diane M. Fremgen

Clerk of Supreme Court

ATTORNEY disciplinary proceeding. Attorney's license 

revoked. 

¶1 PER CURIAM. Although Attorney Michael D. Mandelman 

entered into a stipulation with the Office of Lawyer Regulation 

(OLR), pursuant to which he pled no contest to the 221 counts of 

misconduct pending against him and agreed that his license to 

practice law in Wisconsin should be revoked, he has filed an 

 

1 The parties' stipulation and the referee's report refer in 

multiple places to 23 remaining counts. The lists of dismissed 

and remaining counts in the stipulation clearly state, however, 

that 23 counts were dismissed and 22 counts remained pending.
No. 2011AP584-D 

2

appeal from the report and recommendation of the referee, 

Attorney Christine Harris Taylor, which was based on that 

stipulation. Essentially, he seeks through his appeal to 

comment on certain characterizations and findings by the referee 

and to provide additional support for the referee's 

recommendation to make his revocation effective as of the date 

of his prior suspension, May 29, 2009.

¶2 When we review a referee's report and recommendation 

in an attorney disciplinary case, we affirm the referee's 

findings of fact unless they are found to be clearly erroneous, 

but we review the referee's conclusions of law on a de novo 

basis. In re Disciplinary Proceedings Against Inglimo, 

2007 WI 126, ¶5, 305 Wis. 2d 71, 740 N.W.2d 125. We determine 

the appropriate level of discipline to impose given the 

particular facts of each case, independent of the referee's 

recommendation, but benefiting from it. In re Disciplinary 

Proceedings Against Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45, 

660 N.W.2d 686.

¶3 After reviewing this matter and considering Attorney 

Mandelman's appeal, we accept the referee's factual findings and 

legal conclusions based on the parties' stipulation. We further 

agree that the 22 counts of misconduct support the revocation of 

Attorney Mandelman's license to practice law in this state, 

which we make effective as of the effective date of his prior 

suspension. Because the record is not sufficient to award 

restitution to any particular person, we direct Attorney 

Mandelman to work with the OLR and his former colleague, 
No. 2011AP584-D 

3

Attorney Jeffrey A. Reitz, to determine who is owed money from 

the trust accounts utilized by Attorney Mandelman and in what 

amounts. Finally, because Attorney Mandelman litigated this 

matter vigorously prior to entering into the stipulation, we 

order Attorney Mandelman to pay the full costs of this 

proceeding, which were $16,943.16 as of April 2, 2014. 

¶4 The OLR initiated this disciplinary proceeding with 

the filing of a 45-count complaint. Attorney Mandelman filed an 

answer, which effectively denied many of the complaint's factual 

allegations and expressly denied the counts of professional 

misconduct. During the pre-hearing phase of this proceeding, 

the OLR dismissed 23 counts due to evidentiary problems, leaving 

22 counts to be resolved. 

¶5 After Attorney Mandelman had filed a summary judgment 

motion on the 22 remaining counts and the OLR had filed its 

response, Attorney Mandelman entered into a stipulation, 

pursuant to which he withdrew his answer to the complaint and 

pled no contest to the remaining 22 counts of misconduct. He 

agreed in the stipulation that the referee could use the 

relevant allegations of the complaint as the factual basis for 

finding misconduct on those remaining 22 counts. He further 

agreed with the OLR's sanction request for the revocation of his 

license to practice law in this state, retroactive to May 29, 

2009, the effective date for his most recent one-year 

suspension. In re Disciplinary Proceedings Against Mandelman, 

2009 WI 40, ¶28, 317 Wis. 2d 215, 765 N.W.2d 788 (Mandelman IV). 
No. 2011AP584-D 

4

¶6 The stipulation contained the necessary 

representations by Attorney Mandelman and the OLR. 

Specifically, the parties agreed that Attorney Mandelman's plea 

of no contest and his stipulation to the OLR's requested level 

of discipline was not the result of plea bargaining. Attorney 

Mandelman represented that he understood the allegations of 

misconduct against him and his right to contest those 

allegations; that he understood the ramifications of his entry 

into the stipulation; that the understood his right to consult 

counsel and that he had, in fact, retained counsel in this 

matter; and that his entry into the stipulation had been knowing 

and voluntary.

¶7 The referee's report accepted the parties' stipulation 

and Attorney Mandelman's no contest plea and determined that the 

stipulated facts supported legal conclusions that Attorney 

Mandelman had engaged in the remaining 22 counts of professional 

misconduct. The referee's factual findings and conclusions of 

law are described in the following paragraphs.

¶8 Attorney Mandelman was admitted to the practice of law 

in this state in January 1980. He has been the subject of 

professional discipline on six previous occasions:

 In re Disciplinary Proceedings Against Mandelman, 

158 Wis. 2d 1, 460 N.W.2d 749 (1990) (Mandelman 

I) (one-year suspension imposed for 27 counts of 

misconduct, including multiple counts of failure 

to act with diligence, failing to return files to 

clients promptly, simultaneously representing 

multiple clients with adverse interests, settling 

a client's claim without authorization, failing 

to communicate with clients, and making a 
No. 2011AP584-D 

5

misrepresentation to the Board of Attorneys 

Professional Responsibility (BAPR));

 In re Disciplinary Proceedings Against Mandelman, 

182 Wis. 2d 583, 514 N.W.2d 11 (1994) (Mandelman 

II) (18-month suspension imposed for misconduct 

that included failing to act with diligence, 

failing to respond to clients' requests for 

information, failing to refund a client's 

retainer, violating the rules regarding client 

trust accounts following his 1990 suspension, and 

failing to provide complete and accurate 

responses to BAPR);2

 Private Reprimand 99-18 (consensual private 

reprimand imposed in 1999 for making a false 

statement of fact to a tribunal);

 Private Reprimand 06-21 (consensual private 

reprimand imposed in 2006 for drawing a check 

from his business account to pay the mortgage 

payment of a personal injury client);

 In re Disciplinary Proceedings Against Mandelman, 

2006 WI 45, 290 Wis. 2d 158, 714 N.W.2d 512 

(Mandelman III) (nine-month suspension imposed 

for multiple instances of misconduct, including 

failure to act with reasonable diligence, failure 

to utilize a written fee agreement in a medical 

malpractice case, and persuading his client to 

sign a prospective release of claims against him 

without the client obtaining independent 

representation); and 

 In re Disciplinary Proceedings Against Mandelman, 

2009 WI 40, 317 Wis. 2d 215, 765 N.W.2d 788 

(Mandelman IV) (one-year suspension imposed for 

misconduct that included collecting a fee without 

performing any work for the client, failing to 

 

2 For reasons that are not disclosed, the referee omitted 

the 1990 and 1994 suspensions from her report. They were listed 

in the OLR's complaint, however, and therefore were subject to 

Attorney Mandelman's stipulation. Moreover, in any event, this 

court can take judicial notice of its prior decisions and 

orders.
No. 2011AP584-D 

6

provide the client with a written settlement 

statement, retaining a client's funds for more 

than four years, making misrepresentations to a 

client, failing to obtain a client's signature on 

a settlement check and to deposit the settlement 

funds into the client trust account, and failing 

to provide a client's file and funds to the 

client).

¶9 Some general background information is necessary for a 

number of the counts of misconduct in the present disciplinary 

proceeding. Prior to 1999 Attorney Mandelman was the sole owner 

of his own law firm. He maintained client trust accounts at 

what were then known as M&I Bank and TCF Bank. 

¶10 In 1999 Attorney Jeffrey Reitz joined Attorney 

Mandelman's firm. From 1999 to November 2001, Attorneys 

Mandelman and Reitz were co-owners of the law firm, which was 

known as Reitz and Mandelman LLC. During this time, the firm 

used the M&I Bank trust account exclusively. Trust account 

funds remained in the open but dormant TCF Bank trust account.

¶11 Between November 2001 and May 2005, the name of the 

law firm became Reitz, Mandelman & Lawent LLC. Attorney Reitz, 

however, became the sole shareholder for a large part of this 

time, with Attorney Mandelman becoming an employee of the firm. 

In June 2004, when disciplinary actions were pending against 

both Attorney Reitz and Attorney Mandelman, they formed a new 

service corporation, which they named Heartland Legal Group 

S.C., although they continued to practice under the name Reitz, 

Mandelman & Lawent LLC.

¶12 In December 2002, the law firm opened a new trust 

account with Tri City Bank. As had occurred with the TCF 
No. 2011AP584-D 

7

account, Attorneys Mandelman and Reitz did not close the M&I 

trust account. That account simply sat dormant for 

approximately the next six years, with only a few disbursements 

being made from it over that span. As of December 31, 2006, 

that account still held $6,307.02, with outstanding un-cashed 

disbursement checks against the account of $5,542.58 and another 

$994.44 in funds for which no disbursement checks had been 

written.

¶13 When Attorney Reitz's license was suspended in May 

2005,3 Attorney Mandelman re-acquired full ownership of the law 

firm and formed another new service corporation by the name of 

Mandelman & Associates, S.C. Despite the creation of this new 

service corporation and the lack of any limited liability 

company, Attorney Mandelman continued to refer to the law firm 

as a couple of different limited liability companies,4 including 

on his letterhead. In addition, Attorney Mandelman also ceased 

using the Tri City Bank trust account and opened yet another new 

client trust account at Pyramax Bank. As with the prior trust 

accounts, the Tri City Bank trust account essentially lay 

dormant for the next three years, with the exception of a few 

disbursements.

 

3 In re Disciplinary Proceedings Against Reitz, 2013 WI 27, 

346 Wis. 2d 375, 828 N.W.2d 225.

4 He referred to the firm at different times as Mandelman & 

Lawent LLC or Mandelman, Georges & Lawent LLC. No such limited 

liability companies were created.
No. 2011AP584-D 

8

¶14 Effective July 1, 2006, Attorney Mandelman's license 

was suspended. Attorney Reitz did not simply re-acquire 

ownership of the existing firm at that time. Instead he formed 

a new law firm, Reitz, Parker & Lawent, S.C. (RPL), and opened a 

new client trust account for that firm (the RPL trust account). 

The RPL firm then apparently acquired Attorney Mandelman's 

existing firm. Attorney Mandelman's trust account at Pyramax 

Bank apparently sat dormant for the next two years until the 

majority of undistributed funds remaining in that account were 

transferred to the RPL trust account.

¶15 The first count to which Attorney Mandelman pled no 

contest, count two of the complaint, alleged that he had 

violated Supreme Court Rule (SCR) 20:7.5(a)5 (and SCR 20:7.1(a)6) 

by making false or misleading communications regarding the name 

and organizational status of his law firm. The referee 

concluded that the stipulated facts supported a conclusion of 

misconduct on this count.

 

5 SCR 20:7.5(a) provides:

A lawyer shall not use a firm name, letterhead or 

other professional designation that violates 

SCR 20:7.1. A trade name may be used by a lawyer in 

private practice if it does not imply a connection 

with a government agency or with a public or 

charitable legal services organization and is not 

otherwise in violation of SCR 20:7.1.

6 SCR 20:7.1(a) provides that a lawyer shall not make a 

false or misleading communication about the lawyer or the 

lawyer's services, such that the communication "contains a 

material misrepresentation of fact or law, or omits a fact 

necessary to make the statement considered as a whole not 

materially misleading."
No. 2011AP584-D 

9

¶16 Count three of the complaint related to J.N., a client 

of Attorneys Mandelman and Reitz in 2003 and 2004. When 

Attorney Reitz's license was suspended in May 2005 and Attorney 

Mandelman resumed ownership of the law firm, $700 in settlement 

funds belonging to J.N. remained in the Tri City Bank trust 

account. Neither Attorney Mandelman nor Attorney Reitz ever 

paid the $700 sitting in the Tri City Bank trust account to J.N. 

The referee concluded that Attorney Mandelman's failure to 

disburse the $700 to J.N. constituted a violation of 

SCR 20:1.15(d)(1).7

¶17 Counts four through seven relate to Attorney 

Mandelman's representation of and appointment as guardian ad 

litem for S.M. in connection with the approval and 

implementation of a minor settlement. When the circuit court 

approved the settlement, it directed Attorney Mandelman to 

purchase an annuity for S.M. and then to place the remaining 

settlement funds into his trust account. The court further 

instructed Attorney Mandelman to negotiate reduced payments to 

 

7 SCR 20:1.15(d)(1) provides:

Notice and disbursement. Upon receiving funds or 

other property in which a client has an interest, or 

in which the lawyer has received notice that a 3rd 

party has an interest identified by a lien, court 

order, judgment, or contract, the lawyer shall 

promptly notify the client or 3rd party in writing. 

Except as stated in this rule or otherwise permitted 

by law or by agreement with the client, the lawyer 

shall promptly deliver to the client or 3rd party any 

funds or other property that the client or 3rd party 

is entitled to receive.
No. 2011AP584-D 

10

the subrogated medical providers who had provided care to S.M. 

Specifically, the court's order stated that if the remaining 

settlement funds were insufficient to pay the subrogated medical 

providers, Attorney Mandelman was required to reduce his fee so 

that the providers could be paid first. Any balance remaining 

after the payment of the subrogated medical providers' claims 

and Attorney Mandelman's fee was to be paid to S.M.

¶18 On January 18, 2006, the sum of $30,870 in settlement 

funds for S.M. was deposited into Attorney Mandelman's Pyramax 

Bank trust account. Despite the circuit court's order, Attorney 

Mandelman immediately disbursed $18,125 to himself in full 

payment of his one-third contingent fee. 

¶19 After Attorney Mandelman's license was suspended on 

July 1, 2006, a balance of $5,770.29 remained in S.M.'s 

subsidiary account. That amount was subsequently transferred to 

the RPL trust account, where it remained more than two years 

later. No further payments to subrogated medical providers were 

paid, nor was any portion of the remaining funds paid to S.M.

¶20 The referee concluded that these facts supported four 

counts of misconduct, including a lack of diligence 

(SCR 20:1.3),8 a failure to pay trust account funds to their 

proper recipient over the approximately six months between the 

deposit of those funds in his trust account and the suspension 

of Attorney Mandelman's license (SCR 20:1.15(d)(1)), 

 

8 SCR 20:1.3 provides that "[a] lawyer shall act with 

reasonable diligence and promptness in representing a client."
No. 2011AP584-D 

11

disobedience of the trial court's order to pay the subrogated 

parties before collecting his fee (SCR 20:3.4(c)),9 and engaging 

in conduct involving dishonesty, fraud, deceit, or 

misrepresentation by immediately taking his full contingent fee 

before paying the subrogated parties (SCR 20:8.4(c))10.

¶21 Counts eight and nine of the complaint relate to 

Attorney Mandelman's representation of A.B. in a divorce action 

from 1997 through 2000. In the fall of 2000, $75,449.99 

belonging to A.B. was deposited into Attorney Mandelman's trust 

account. A.B. did not authorize Attorney Mandelman to use the 

trust account funds to pay the law firm's $25,465 outstanding 

invoice nor did he pay that invoice using other funds. For the 

next four years, Attorney Mandelman did not disburse any of the 

trust account funds to A.B. or anyone else; the funds simply sat 

in the trust account not earning interest. Although $6,000 of 

the trust account funds were disbursed to the law firm in May 

2005 pursuant to a settlement, the rest of the funds still 

remained in the trust account.

¶22 The referee determined that by failing to resolve the 

proper division of the $75,449.99 for more than four years, 

Attorney Mandelman had failed to act with reasonable diligence 

 

9 SCR 20:3.4(c) provides that a lawyer shall not "knowingly 

disobey an obligation under the rules of a tribunal, except for 

an open refusal based on an assertion that no valid obligation 

exists."

10 SCR 20:8.4(c) provides that it is professional misconduct 

for a lawyer to "engage in conduct involving dishonesty, fraud, 

deceit or misrepresentation."
No. 2011AP584-D 

12

and promptness, in violation of SCR 20:1.3. She also concluded 

that the multi-year delay in disbursing the funds had 

constituted a violation of former SCR 20:1.15(b)11 and current 

SCR 20:1.15(d)(1).

¶23 Counts 16 and 17 relate to negative balances in 

subsidiary trust accounts for three clients and a company owned 

by Attorney Mandelman. For example, on one occasion Attorney 

Mandelman disbursed $2,500 to his law firm in payment of its 

fees from a client's subsidiary trust account, although that 

client only had $1,500 on deposit in the trust account, creating 

a shortfall for that client of $1,000. On another occasion, he 

had a check written to his law firm for $4,000 from trust 

account funds allegedly belonging to a company he owned. The 

company, however, had no funds in the trust account at that 

time, creating a negative balance in that company's subsidiary 

account of $4,000. 

¶24 The referee determined that the negative balances in 

the four subsidiary accounts resulting from disbursements of 

 

11 Former SCR 20:1.15(b), effective prior to July 1, 2004, 

provides:

Upon receiving funds or other property in which a 

client or third person has an interest, a lawyer shall 

promptly notify the client or third person in writing. 

Except as stated in this rule or otherwise permitted 

by law or by agreement with the client, a lawyer shall 

promptly deliver to the client or third person any 

funds or other property that the client or third 

person is entitled to receive and, upon request by the 

client or third person, shall render a full accounting 

regarding such property. 
No. 2011AP584-D 

13

more funds from those subsidiary accounts than were present in 

those accounts had resulted in the improper use of other 

clients' funds, in violation of former SCR 20:1.15(a),12 current 

 

12 Former SCR 20:1.15(a), effective prior to July 1, 2004 

provides:

A lawyer shall hold in trust, separate from the 

lawyer's own property, that property of clients and 

third persons that is in the lawyer's possession in 

connection with a representation or when acting in a 

fiduciary capacity. Funds held in connection with a 

representation or in a fiduciary capacity include 

funds held as trustee, agent, guardian, personal 

representative of an estate, or otherwise. All funds 

of clients and third persons paid to a lawyer or law 

firm shall be deposited in one or more identifiable 

trust accounts as provided in paragraph (c). The 

trust account shall be maintained in a bank, savings 

bank, trust company, credit union, savings and loan 

association or other investment institution authorized 

to do business and located in Wisconsin. The trust 

account shall be clearly designated as "Client's 

Account" or "Trust Account" or words of similar 

import. No funds belonging to the lawyer or law firm, 

except funds reasonably sufficient to pay or avoid 

imposition of account service charges, may be 

deposited in such account. Unless the client 

otherwise directs in writing, securities in bearer 

form shall be kept by the attorney in a safe deposit 

box in a bank, savings bank, trust company, credit 

union, savings and loan association or other 

investment institution authorized to do business and 

located in Wisconsin. The safe deposit box shall be 

clearly designated as "Client's Account" or "Trust 

Account" or words of similar import. Other property 

of a client or third person shall be identified as 

such and appropriately safeguarded. If a lawyer also 

licensed in another state is entrusted with funds or 

property in connection with an out-of-state 

representation, this provision shall not supersede the 

trust account rules of the other state.
No. 2011AP584-D 

14

SCR 20:1.15(e)(5)(a),13 and current SCR 20:1.15(f)(1)(b).14 The 

referee also determined that Attorney Mandelman's payment to his 

law firm of money from his firm's trust account that the law 

firm was not entitled to receive had constituted a violation of 

SCR 20:8.4(c).

¶25 Counts 18 and 21 also relate to Attorney Mandelman's 

trust account records. In connection with Attorney Mandelman's 

petition for reinstatement from the nine-month suspension 

imposed in 2006, the OLR asked Attorney Mandelman to produce 

bank statements and other trust account records. Attorney 

Mandelman and his accountant, Constance Hackbarth, produced only 

some of the requested records. The electronic ledgers provided 

by Hackbarth were incomplete and showed that there had still 

been funds in the Pyramax Bank trust account just before it had 

been closed. In addition, Attorney Mandelman did not file with 

the OLR any overdraft reporting agreement for the Pyramax Bank 

 

13 SCR 20:1:15(e)(5)(a) provides that "[a] lawyer shall not 

disburse funds from any trust account unless the deposit from 

which those funds will be disbursed has cleared, and the funds 

are available for disbursement."

14 SCR 20:1.15(f)(1)(b) provides:

A subsidiary ledger shall be maintained for each 

client or 3rd party for whom the lawyer receives trust 

funds that are deposited in an IOLTA account or any 

other pooled trust account. The lawyer shall record 

each receipt and disbursement of a client's or 3rd 

party's funds and the balance following each 

transaction. A lawyer shall not disburse funds from 

an IOLTA account or any pooled trust account that

would create a negative balance with respect to any 

individual client or matter.
No. 2011AP584-D 

15

trust account. He also did not report the existence of any 

trust accounts on his Fiscal Year 2006 State Bar Dues Statement 

that he filed in August 2005.

¶26 The referee found two ethical violations based on 

these facts. First, he determined that Attorney Mandelman had 

failed to create and retain complete and accurate trust account 

records, in violation of SCR 20:1.15(e)(6).15 He also concluded 

that Attorney Mandelman's failure to list his active trust 

accounts on his dues statement and to certify that he was in 

compliance with his record-keeping and overdraft reporting 

requirements had constituted a violation of SCR 20:1.15(i)(1) 

and (2).16

 

15 SCR 20:1.15(e)(6) provides that "[a] lawyer shall 

maintain complete records of trust account funds and other trust 

property and shall preserve those records for at least 6 years 

after the date of termination of the representation."

16 SCR 20:1.15(i)(1) and (2) provides:

(1) Annual requirement. A member of the state 

bar of Wisconsin shall file with the state bar of 

Wisconsin annually, with payment of the member's state 

bar dues or upon any other date approved by the 

supreme court, a certificate stating whether the 

member is engaged in the practice of law in Wisconsin. 

If the member is practicing law, the member shall 

state the account number of any trust account, and the 

name of each financial institution in which the member 

maintains a trust account, a safe deposit box, or 

both, as required by this section. The state bar 

shall supply to each member, with the annual dues 

statement, or at any other time directed by the 

supreme court, a form on which the certification must 

be made.

(2) Trust account record compliance. Each state

bar member shall explicitly certify on the state bar 
No. 2011AP584-D 

16

¶27 Counts 26 and 28-30 relate to the commingling of 

Attorney Mandelman's personal and business funds with client 

funds in his client trust accounts and the failure to report 

certain income on the tax returns of Attorney Mandelman or his 

businesses. In the years that they practiced together, 

Attorneys Mandelman and Reitz personally carried significant 

amounts of debt, as did the law firm that they owned. The law 

firm's business accounts were also frequently overdrawn. Those 

firm business accounts, as well as personal accounts belonging 

to Attorneys Mandelman and Reitz, were subject to liens and 

garnishments at various points in this time period.

¶28 In May 2003 Attorney Mandelman incorporated Heartland 

Holding Group, Inc. (Heartland) for the purpose of investing in 

real estate. Attorney Mandelman's co-owner of Heartland was an 

individual by the name of Steve Weston. Attorney Mandelman 

reported in a May 2007 deposition in his reinstatement 

proceeding that many of his assets were actually titled in 

Weston's name. Attorney Reitz was listed as the registered 

agent for Heartland.

¶29 In October 2004, Attorney Mandelman endorsed and 

deposited a check in the amount of $189,451 payable to Heartland 

into the law firm's Tri City Bank trust account. Over the next 

three months, $188,451 of this amount was disbursed from the 

trust account via 32 separate trust account checks. Although 

 

certificate described in par. (1) that the member has 

complied with each of the record-keeping requirements 

set forth in subs. (f) and (j)(5).
No. 2011AP584-D 

17

Attorney Mandelman was not an owner of the law firm at this time 

and Attorney Reitz had no ownership interest in Heartland, 25 of 

these trust account checks were made payable to Attorney Reitz 

personally and another six checks were made payable to the law 

firm. One such check was paid to Paul J. Stein "for Payroll 

Account." The last portion of these funds was disbursed to 

Attorney Mandelman personally via a June 2, 2005 check. 

¶30 The OLR later asked Attorney Mandelman about how the 

Heartland real estate transaction and the subsequent 

disbursements had been reported for income tax purposes. 

Attorney Mandelman initially responded by claiming that the 

Heartland real estate transaction had been a "possible 1031 

exchange" so there would have been no taxable gain, but the way 

that the proceeds were deposited into and disbursed from the law 

firm's trust account was not compatible with that provision of 

the federal tax code. Attorney Mandelman never provided the OLR 

with income tax information for Heartland regarding this 

transaction, and his personal 2004 federal income tax return did 

not report any capital gain or loss from the transaction.

¶31 The referee concluded that the failure to report the 

Heartland real estate transaction and any accompanying gains or 

losses on any corporate or personal income tax return had 

constituted a violation of SCR 20:8.4(c) and the standard of 

conduct set forth in case law such as In re Disciplinary 

Proceedings Against Owens, 172 Wis. 2d 54, 56-57, 492 N.W.2d 157 

(1992), which is enforced via SCR 20:8.4(f).
No. 2011AP584-D 

18

¶32 Attorney Mandelman also deposited other funds 

belonging to another business he owned, Liberty Holding Company 

Ltd. (Liberty Holding), into the law firm trust account and then 

transferred those funds to the law firm via trust account 

checks. In addition, the firm's trust account records showed 

that there was a "Mandelman" subsidiary account in the client 

trust account. Between May 2005 and November 2006, Attorney 

Mandelman deposited over $110,000 into the firm's Pyramax Bank 

trust account that was recorded in the "Mandelman" subsidiary 

account. Most of that money, approximately $83,000, was 

subsequently disbursed from the trust account via what were 

labeled on the firm's trust account ledgers as "cashiers." No 

payees for these "cashiers" were identified. Further, when the 

OLR asked for a list of cashier's checks that had been purchased 

with these funds, Attorney Mandelman did not produce them. 

Finally, a number of automated payments were disbursed from the 

Mandelman subsidiary account for bank fees and credit card fees, 

which resulted in a negative balance in the subsidiary account 

at times. Attorney Mandelman never explained how he had 

subsequently covered those negative balances or to what 

businesses those fees had related. 

¶33 The referee determined that these facts supported 

three counts of misconduct. First, he found that Attorney 

Mandelman had twice violated SCR 20:1.15(b)(3)17—one violation 

 

17 SCR 20:1.15(b)(3) provides that "[n]o funds belonging to 

the lawyer or law firm, except funds reasonably sufficient to 

pay monthly account service charges, may be deposited or 

retained in a trust account."
No. 2011AP584-D 

19

for depositing and disbursing the funds belonging to his Liberty 

Holding business and one violation for deposits and 

disbursements related to the "Mandelman" subsidiary account. In 

addition, the referee found that the deposit of over $110,000 

from unknown sources into the "Mandelman" subsidiary account and 

the disbursements out of that subsidiary account to unknown 

payees for unknown purposes, without having created any records 

identifying the source, payee, or purpose of the transactions, 

had violated SCR 20:8.4(c).

¶34 Count 34 relates to another "Mandelman" subsidiary 

account that was created in the RPL trust account following 

Attorney Mandelman's suspension in July 2006. Over the next 

approximately 18 months, there was a relatively large number of 

transactions attributed to this "Mandelman" subsidiary account. 

Some of these transactions do not appear to have related to any 

particular client and some did not appear on the RPL trust 

account ledgers. In addition, more funds were withdrawn from 

this subsidiary account than were deposited into it, resulting 

in a negative balance. The referee concluded that by using the 

RPL client trust account to make unrecorded and unexplained 

personal and business deposits and withdrawals after his 2006 

suspension, Attorney Mandelman had violated SCR 20:8.4(c).

¶35 Count 40 relates to Attorney Mandelman's claiming of 

$122,000 in business expenses related to "accrued bills" on his 

2005 income tax returns. When the OLR discussed these claimed 

expenses with Hackbarth, she asserted that $84,616 of this 

amount represented "prepaid expenses," which she described as 
No. 2011AP584-D 

20

costs incurred for clients prior to settlement of their personal 

injury cases or prior to billing, which had been accumulating 

over the years but had never previously been claimed as 

expenses. The firm's records showed, however, that the firm had 

indeed been reimbursed for many of these "prepaid expenses" 

during the time period when Attorney Reitz had been the owner 

and had been obligated to report firm income and expenses for 

tax purposes. Attorney Mandelman tried to provide an 

explanation to the OLR as to why he had deducted these allegedly 

accumulated expenses from his 2005 income, but his response did 

not correspond to what Hackbarth had told the OLR or to what was 

shown on the firm's financial records. 

¶36 The referee determined that recklessly claiming a 

$122,000 business expense for "accrued bills" on his federal 

income tax return, when many of the claimed "prepaid expenses" 

had been previously reimbursed to the firm or could not be 

substantiated, had violated a standard of conduct set forth in 

Owens, 172 Wis. 2d at 56-57, contrary to SCRs 20:8.4(f)18 and 

20:8.4(c).

¶37 Count 42 also relates to inaccurate information on 

Attorney Mandelman's federal tax return, although this time for 

the 2006 tax year. Specifically, the referee found that 

Attorney Mandelman had reported $33,888.89 in residual income 

 

18 SCR 20:8.4(f) provides that it is professional misconduct 

for a lawyer to "violate a statute, supreme court rule, supreme 

court order or supreme court decision regulating the conduct of 

lawyers."
No. 2011AP584-D 

21

paid to him from the RPL law firm after his July 2006 

suspension, when the RPL trust account records showed that he 

had been paid at least $65,614.93 in legal fees during this 

time. The referee determined that this underreporting of 

income, which she found to have been reckless, had also violated 

the standard set forth in Owens, 172 Wis. 2d at 56-57, contrary 

to SCRs 20:8.4(f) and 20:8.4(c).

¶38 Counts 43 and 44 relate to the representation of B.R., 

who had been injured in a motorcycle accident in April 2005. 

Shortly after B.R. had retained the law firm, Attorney Reitz had 

left the firm due to his disciplinary suspension and Attorney 

Mandelman worked on B.R.'s case. When Attorney Mandelman's 

license was suspended, he did not inform B.R. of his suspension

or advise him that he should find another attorney of his 

choosing. 

¶39 After his suspension, Attorney Mandelman submitted an 

affidavit to the OLR pursuant to SCR 22.26(1)(e), which requires 

a suspended attorney to certify that the attorney has provided 

written notice of the suspension to all clients with pending 

matters. Attorney Mandelman submitted this affidavit despite 

not having informed B.R. of his suspension and not identifying 

B.R. on an attached list of pending clients.19 

 

19 As noted above, Attorney Reitz's RPL law firm apparently 

acquired Attorney Mandelman's law firm following Attorney 

Mandelman's 2006 suspension. Consequently, Attorney Reitz took 

over responsibility for B.R.'s matter. B.R., however, was never 

informed of this change in law firms or asked to consent to the 

change.
No. 2011AP584-D 

22

¶40 The referee concluded that Attorney Mandelman's 

failure to notify B.R. of his July 1, 2006 suspension and to 

advise B.R. to seek representation of his choice elsewhere had 

constituted a violation of SCR 22.26(1),20 which is enforced via 

 

20 SCR 22.26(1) provides:

On or before the effective date of license 

suspension or revocation, an attorney whose license is 

suspended or revoked shall do all of the following:

(a) Notify by certified mail all clients being 

represented in pending matters of the suspension or 

revocation and of the attorney's consequent inability 

to act as an attorney following the effective date of 

the suspension or revocation.

(b) Advise the clients to seek legal advice of 

their choice elsewhere.

(c) Promptly provide written notification to the 

court or administrative agency and the attorney for 

each party in a matter pending before a court or 

administrative agency of the suspension or revocation 

and of the attorney's consequent inability to act as 

an attorney following the effective date of the 

suspension or revocation. The notice shall identify 

the successor attorney of the attorney's client or, if 

there is none at the time notice is given, shall state 

the client's place of residence. 

(d) Within the first 15 days after the effective 

date of suspension or revocation, make all 

arrangements for the temporary or permanent closing or 

winding up of the attorney's practice. The attorney 

may assist in having others take over clients' work in 

progress.

(e) Within 25 days after the effective date of 

suspension or revocation, file with the director an 

affidavit showing all of the following:

(i) Full compliance with the provisions of the 

suspension or revocation order and with the rules and 
No. 2011AP584-D 

23

SCR 20:8.4(f). In addition, Attorney Mandelman's filing of an 

affidavit that falsely claimed that he had notified all clients 

with pending matters and that a list of all clients with pending 

matters was attached to the affidavit violated SCR 20:8.4(c) and 

SCR 22.26(1)(e), which is enforced via SCR 20:8.4(f).

¶41 Finally, Count 45 relates to Attorney Mandelman's 

representation of G.W., a six-year-old boy who had been burned 

by a hot fudge dispenser in a restaurant. G.W.'s mother 

retained Attorneys Reitz and Mandelman in January 2002 to pursue 

a claim on G.W.'s behalf against the restaurant and its insurer. 

¶42 The referee concluded that Attorney Mandelman's 

failure over a period of four and a half years to obtain and 

present a settlement offer21 to G.W.'s parents, to initiate a 

 

procedures regarding the closing of the attorney's 

practice.

(ii) A list of all jurisdictions, including 

state, federal and administrative bodies, before which 

the attorney is admitted to practice.

(iii) A list of clients in all pending matters 

and a list of all matters pending before any court or 

administrative agency, together with the case number 

of each matter. 

(f) Maintain records of the various steps taken 

under this rule in order that, in any subsequent 

proceeding instituted by or against the attorney, 

proof of compliance with the rule and with the 

suspension or revocation order is available.

21 A June 2006 note from Attorney Mandelman's paralegal 

showed that there had been a $5,000 settlement offer from the 

restaurant or its insurer. This settlement offer, however, was 

never communicated to G.W.'s mother.
No. 2011AP584-D 

24

civil action, or to advise the parents that he did not believe 

G.W.'s claims were worth pursuing had demonstrated a failure to 

act with reasonable diligence and promptness, in violation of 

SCR 20:1.3. 

¶43 The referee recommended that Attorney Mandelman's 

license be revoked, but that the effective date of the 

revocation should be concurrent with the start of Attorney 

Mandelman's most recent one-year suspension. In addition to 

relying on the parties' stipulation, the referee determined that 

revocation was supported by prior decisions containing similar 

violations. See, e.g., In re Disciplinary Proceedings Against 

Gedlen, 2007 WI 121, 305 Wis. 2d 34, 739 N.W.2d 274; In re 

Disciplinary Proceedings Against Sheehan, 2007 WI 3, 

298 Wis. 2d 317, 725 N.W.2d 627; In re Disciplinary Proceedings 

Against Weigel, 2012 WI 124, 345 Wis. 2d 7, 823 N.W.2d 798. The 

referee also took into account this court's endorsement of the 

concept of progressive discipline. See, e.g., In re 

Disciplinary Proceedings Against Nussberger, 2006 WI 111, ¶27, 

296 Wis. 2d 47, 719 N.W.2d 501. The referee further considered 

a number of aggravating and mitigating factors. Aggravating 

factors included Attorney Mandelman's significant disciplinary 

history, the fact that the trust account violations in this 

proceeding had been part of a pattern of misconduct, the 

presence of a dishonest or selfish motive (using the client 

trust accounts to conceal personal income and recklessly filing 

tax returns that misrepresented his income), the large number of 

violations in this proceeding, Attorney Mandelman's intentional 
No. 2011AP584-D 

25

failure to provide information or documents that were requested 

by the OLR, and the harm suffered by Attorney Mandelman's 

clients. 

¶44 On the mitigating side, the referee acknowledged 

Attorney Mandelman's claim that he had been suffering from 

chronic fatigue due to having Hepatitis C. The referee further 

acknowledged that during the time period relevant to this 

proceeding, Attorney Mandelman had undergone another round of 

therapy that had not worked. She also considered the affidavit 

of a doctor that Attorney Mandelman had submitted. The referee 

stated, however, that while the affidavit had addressed the 

effects of Hepatitis C in general, it had failed to aver that 

Attorney Mandelman had actually suffered from those side effects 

during the relevant time period. 

¶45 With respect to her recommendation for a May 2009 

effective date, the referee noted that the misconduct at issue 

here occurred primarily during 2004-2007, which was the same 

time period as the misconduct that was at issue in Mandelman IV. 

Moreover, Attorney Mandelman's license has remained suspended 

well past the one-year period of suspension imposed in that 

case. See In re Disciplinary Proceedings Against Cooper, 

2013 WI 55, ¶25, 348 Wis. 2d 266, 833 N.W.2d 88. The referee 

concluded that under these circumstances the period of 

revocation should run concurrently with the one-year suspension 

that began on May 29, 2009.

¶46 The referee further recommended that Attorney 

Mandelman should be required to pay the full costs of this 
No. 2011AP584-D 

26

proceeding. The OLR's statement of costs indicates that as of 

April 2, 2014, the costs of this proceeding were $16,943.16.

¶47 The referee did not make any recommendation with 

respect to restitution. The OLR filed a statement on 

restitution, which did not ask for any restitution award. With 

respect to the representations of B.R. and G.W., the OLR notes 

that there was no allegation or finding that Attorney Mandelman 

had misappropriated or misapplied client funds. As to the 

various trust account violations, the OLR asserts that there is 

not a readily ascertainable amount that would meet its criteria 

for restitution and that it could ask this court to award to 

specific payees. It states that it has not been able to 

determine whether the funds in the various trust accounts were 

or were not ultimately disbursed to the rightful owners. The 

OLR notes that in the Reitz decision, this court ordered 

Attorney Reitz to distribute all funds in his trust accounts to 

the rightful owners, or if the rightful owners could not be 

identified, to transfer the funds to the state treasurer's 

office as unclaimed or unidentifiable property. 

346 Wis. 2d 375, ¶42. The OLR states that Attorney Mandelman 

has agreed to work with Attorney Reitz and the OLR to accomplish 

the same task for his clients. 

¶48 We now turn to Attorney Mandelman's appeal, which is 

somewhat strange in that he is not asking this court to overturn 

any of the legal conclusions of misconduct nor is he requesting 

a less severe sanction than that recommended by the referee. 
No. 2011AP584-D 

27

¶49 Attorney Mandelman specifically does not challenge any 

of the factual findings that underlie the counts of misconduct 

or the legal conclusions of misconduct. In light of Attorney 

Mandelman's stipulation to those facts, we accept the referee's 

findings of fact based on the remaining allegations of the 

complaint. We further determine that those findings adequately 

support the legal conclusion that Attorney Mandelman did engage 

in the 22 ethical violations alleged in the remaining counts of 

the complaint. 

¶50 The primary focus of Attorney Mandelman's appeal is 

essentially a number of arguments urging this court to consider 

additional information regarding his accountant and the effects 

of his Hepatitis C infection as mitigating factors that would 

lessen his culpability for his violations without changing the 

end result recommended by the referee. He contends that the 

referee's discussion of mitigating factors contained erroneous 

findings of fact and did not give sufficient consideration to 

these two mitigating factors. 

¶51 With respect to the actions of Hackbarth, Attorney 

Mandelman relies extensively on opinions from the OLR's 

accountant expert, who disputed Hackbarth's analysis of certain 

issues and the way that certain items had been reported on 

Attorney Mandelman's income tax returns. Attorney Mandelman 

asserts that he expected Hackbarth, as a certified public 

accountant, to make a proper evaluation of the records that he 

and the law firm submitted to her so that she could compile 

accurate accounting records for the law firm and prepare his 
No. 2011AP584-D 

28

personal income tax returns. He further contends that it was 

Attorney Reitz's responsibility to ensure that Hackbarth had all 

of the information she needed to do both the accounting and the 

tax return preparation. If Hackbarth did not have all of the 

necessary information, Attorney Mandelman argues that it was her 

responsibility to make this fact known to him so that he could 

get her everything she needed. 

¶52 We agree with the OLR's contention that Attorney 

Mandelman never explicitly argued to the referee that his 

reliance on Hackbarth should be considered a mitigating factor. 

In his statement in support of the stipulation, which was 

provided to the referee before she prepared her report, Attorney 

Mandelman did discuss generally his view of how things had 

operated with respect to the law firm's trust accounts and the 

preparation of his income tax returns and his view that 

Hackbarth's record-keeping and preparation of his tax returns 

had been substandard. This discussion, however, occurred in the 

context of providing "background information" about the trust 

account violations and of arguing that the referee should 

conclude that his conduct with respect to the false income tax 

returns was not intentionally fraudulent.22 Attorney Mandelman 

did not mention his reliance on Hackbarth as a mitigating factor 

in the section of his memorandum discussing mitigating factors. 

Thus, the referee did not err in failing to include an explicit 

 

22 The referee did issue an amendment to her report that 

clarified that Attorney Mandelman's filing of false tax returns 

was reckless rather than intentional.
No. 2011AP584-D 

29

discussion of Hackbarth's shortcomings in the section of her 

report dealing with mitigating factors. Moreover, the limited 

information included in Attorney Mandelman's memorandum in 

support of the stipulation did not demonstrate that his reliance 

on Hackbarth had been reasonable and in good faith. 

¶53 Attorney Mandelman also argues that the referee failed 

to give proper consideration to the affidavit of Dr. Michael G. 

Karos regarding the effects of Hepatitis C. In particular, 

Attorney Mandelman challenges the referee's statement that while 

Dr. Karos' affidavit described the effects of the condition in 

general, it failed to state directly that Attorney Mandelman had 

suffered from those effects during the relevant time period. 

¶54 We acknowledge that Dr. Karos' affidavit not only 

discussed generally the side effects of the condition and the 

treatments, but also indicated that the disabling fatigue that 

accompanies the condition and its treatments did afflict 

Attorney Mandelman. Nonetheless, the affidavit did not provide 

all of the necessary evidence to prove that the Hepatitis C 

should be a mitigating factor. "A medical condition will not be 

considered in mitigation of discipline unless that condition is 

explicitly found to have caused the misconduct." In re 

Disciplinary Proceedings Against Schwartz, 134 Wis. 2d 18, 22, 

397 N.W.2d 98 (1986). Dr. Karos did not state when Attorney 

Mandelman had suffered the fatigue and the other side effects 

(i.e., whether at the time of some or all of the misconduct). 

He also never opined that the fatigue or the other side effects 

had been a cause of Attorney Mandelman's misconduct. Thus, the 
No. 2011AP584-D 

30

referee did not err in refusing to rely on the Hepatitis C 

infection as a reason to recommend a less severe sanction, 

especially where Attorney Mandelman had stipulated to the level 

of discipline. 

¶55 Attorney Mandelman also challenges on appeal the 

referee's statement that his misconduct was as serious, if not 

more so, than the misconduct described in the Gedlen, Sheehan, 

and Weigel decisions. 

¶56 It is true that not all of the misconduct that 

occurred in Gedlen, Sheehan, and Weigel is also present in this 

case. That is not unusual, however. Rarely do two attorney 

discipline cases involve precisely the same set of facts or the 

exact same list of violations. What is important is that in 

those decisions, the attorney's license to practice law in this 

state was revoked, and their misconduct was not clearly more 

serious than the misconduct committed by Attorney Mandelman. 

¶57 In the present case, Attorney Mandelman did commingle 

his personal and business funds with client trust funds, he did 

convert the trust funds of clients by engaging in trust account 

transactions that left negative balances in his own subsidiary 

accounts, he did fail to deliver trust funds to clients for many 

years, he did keep incomplete and inaccurate trust account 

records (such that determining who is still owed money is a very 

difficult task), and he did on multiple occasions file income 

tax returns that were recklessly false, whether because of 

failing to report income or because of claiming expenses to 

which he was not entitled. He showed a multi-year lack of 
No. 2011AP584-D 

31

diligence in one matter, failed to notify a client of his 

suspension in another, and also gave a false affidavit to the 

OLR. Moreover, this is not the first time that Attorney 

Mandelman is being disciplined for his misconduct. It is the 

seventh time, and the fifth time that his misconduct has been 

serious enough to warrant having his license to practice law 

suspended. We think that it is not improper to say that 

Attorney Mandelman's conduct is as serious as the misconduct in 

Gedlen, Sheehan, and Weigel, and that, in light of his lengthy 

disciplinary history, he should receive the same sanction that 

they did, namely the revocation of their licenses to practice 

law in this state.

¶58 We further conclude that a retroactive effective date 

of Attorney Mandelman's suspension would be appropriate under 

these circumstances. We have previously stated, including in a 

prior decision involving Attorney Mandelman, that retroactive 

effective dates of suspensions and revocations may be 

appropriate where the "'misconduct occurred prior to the 

[earlier] disciplinary proceeding and [the attorney's] license 

has remained suspended well beyond the period of suspension 

previously imposed.'" Cooper, 348 Wis. 2d 266, ¶25 (quoting 

Mandelman II, 182 Wis. 2d at 592). The misconduct at issue in 

this case did occur before the prior proceeding and Attorney 

Mandelman's license has remained suspended from May 2009 to the 

present time, a much longer period than the one-year suspension 

imposed in Mandelman IV. 
No. 2011AP584-D 

32

¶59 Attorney Mandelman does not object to the referee's 

recommendation that he should bear the full costs of this 

proceeding. Although he ultimately stipulated to the remaining 

22 ethical violations, he had vigorously litigated this matter 

up to that point, which necessitated the expenses incurred by 

the OLR and the referee. Consequently, we see no reason to 

depart in this case from our general policy of imposing full 

costs upon an attorney who engaged in misconduct.

¶60 Finally, we address the issue of restitution. 

Although it does appear that there were funds in the various 

trust accounts Attorney Mandelman or his firm maintained that 

were never disbursed to the proper clients or third parties 

before those trust accounts were closed, there is a lack of 

records from which the OLR or this court can determine what 

amounts are owed and to whom. Consequently, we conclude that 

there is not a sufficient basis upon which we could order 

restitution in favor of any particular client or third party. 

¶61 Because our inability to order restitution to specific 

persons stems from the lack of records caused by Attorney 

Mandelman and/or his colleagues, we are unwilling simply to 

disregard the issue of restitution completely. First, we note 

that in order for Attorney Mandelman to petition for 

reinstatement, he will be required to allege in good faith and 

then to prove that he "has made restitution to or settled all 

claims of persons injured or harmed by [his] misconduct . . . . 

or, if not, [his] explanation of the failure or inability to do 

so." SCR 22.29(4m). We also conclude that we should follow the 
No. 2011AP584-D 

33

path we took with Attorney Reitz in his disciplinary proceeding, 

where we ordered him to disburse all funds in his trust account 

to their rightful owners or to transfer the funds to the state 

treasurer's office if the rightful owner cannot be identified or 

located. Reitz, 346 Wis. 2d 375, ¶¶40, 42. The OLR states that 

Attorney Reitz has been working with that agency to determine 

the former law firms' restitution obligations and that Attorney 

Mandelman has agreed to work with the OLR and Attorney Reitz to 

complete that endeavor. We formalize that obligation here.

¶62 IT IS ORDERED that the license of Michael D. Mandelman 

to practice law in Wisconsin is revoked, effective May 29, 2009.

¶63 IT IS FURTHER ORDERED that Michael D. Mandelman shall 

work with the Office of Lawyer Regulation and Jeffrey A. Reitz 

to determine whether any of the funds in the client trust 

accounts he controlled should have been paid to particular 

individuals or entities and, if so, in what amounts. If such a 

determination is made, Michael D. Mandelman shall pay the amount 

owed to the applicable individual or entity. 

¶64 IT IS FURTHER ORDERED that within 60 days of the date 

of this order, Michael D. Mandelman shall pay to the Office of 

Lawyer Regulation the costs of this proceeding.

¶65 IT IS FURTHER ORDERED that, if Michael D. Mandelman is 

able to determine that restitution is owed to a particular 

individual or entity, the payment of restitution shall occur 

before the payment of costs to the Office of Lawyer Regulation. 

¶66 IT IS FURTHER ORDERED that, to the extent he has not 

already done so, Michael D. Mandelman shall comply with the 
No. 2011AP584-D 

34

provisions of SCR 22.26 concerning the duties of any attorney 

whose license to practice law has been revoked.
No. 2011AP584-D 

1