Title: Office of Lawyer Regulation v. Michael R. Bauer
Citation: N/A
Docket Number: 2016AP001259-D
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: May 16, 2018

2018 WI 49 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2016AP1259-D 
COMPLETE TITLE: 
In the Matter of Disciplinary Proceedings  
Against Michael R. Bauer, Attorney at Law: 
 
Office of Lawyer Regulation, 
          Complainant-Respondent, 
     v. 
Michael R. Bauer, 
          Respondent-Appellant. 
 
 
 
 
DISCIPLINARY PROCEEDINGS AGAINST BAUER 
 
 
OPINION FILED: 
May 16, 2018 
SUBMITTED ON BRIEFS: 
      
ORAL ARGUMENT: 
 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
      
 
COUNTY: 
      
 
JUDGE: 
      
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
      
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
 
For the respondent-appellant, there was a brief filed by 
Michael J. Short and Short Law Office, Madison.  
 
For the complainant-respondent, there was a brief filed by 
Paul W. Schwarzenbart and Office of Lawyer Regulation, Madison.
 
 
2018 WI 49
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2016AP1259-D 
 
 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
In the Matter of Disciplinary Proceedings 
Against Michael R. Bauer, Attorney at Law: 
 
Office of Lawyer Regulation, 
 
          Complainant-Respondent, 
 
     v. 
 
Michael R. Bauer, 
 
          Respondent-Appellant. 
 
FILED 
 
MAY 16, 2018 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
ATTORNEY 
disciplinary 
proceeding.   Attorney's 
license 
suspended.  
 
¶1 
PER CURIAM.   We review the report and recommendation 
of Referee John B. Murphy that Attorney Michael R. Bauer's 
license to practice law in Wisconsin be suspended for a period 
of one year for professional misconduct and that he pay the full 
costs of this proceeding, which are $15,727.40 as of April 25, 
2018.  
¶2 
Upon careful review of the matter, we adopt the 
referee's findings of fact and conclusions of law.  We agree 
No. 
2016AP1259-D   
 
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that a one-year suspension of Attorney Bauer's license is an 
appropriate sanction for his misconduct.  We also agree that the 
full costs of this proceeding should be assessed against him. 
¶3 
Attorney Bauer was admitted to practice law in 
Wisconsin in 1988.  He has not previously been disciplined.  At 
the time pertinent to this case he was a member of Bauer & Bach, 
LLC in Madison.  He now practices as Bauer Law Office in 
Madison.  
¶4 
Bauer & Bach maintained both a trust account and a 
business account at Capitol Bank.  Attorney Bauer was the 
attorney primarily responsible for the record keeping for both 
the trust and business accounts.  T.P., a paralegal assistant at 
the firm, assisted the attorneys by preparing business and trust 
account 
checks 
and 
by 
making 
entries 
in 
the 
QuickBooks 
bookkeeping program used by the firm for the purpose of, among 
other things, serving as the transaction register for the 
accounts.  At no time during the pertinent time frame at issue 
here did the trust account ever have a negative balance.  
Attorney Bauer also maintained accounts for Sports Advisors, 
Inc., a business he owned, at Capitol Bank and at US Bank.  
¶5 
On June 24, 2016, the Office of Lawyer Regulation 
(OLR) filed a complaint against Attorney Bauer alleging 28 
counts of misconduct.  The complaint alleged that between 
December 2013 and October 2014, Attorney Bauer misused seven 
clients' trust funds and mismanaged his trust account.  On 
numerous occasions he transferred client funds from one account 
to another without permission of the clients, failed to make 
No. 
2016AP1259-D   
 
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notations of the transfers, transferred trust account funds to 
fill gaps created in other client accounts to avoid detection, 
transferred trust funds to his office account and to the account 
of his subsidiary business, Sports Advisors, Inc., and borrowed 
money to reestablish correct account balances.  It is undisputed 
that all of the clients received all monies due them.  It is 
also undisputed that none of the clients consented to the use of 
their money to fund disbursements that benefitted others.  
¶6 
Attorney Bauer filed an answer on August 16, 2016, 
admitting some allegations in the complaint and denying others.  
The referee was appointed on October 8, 2016.  On May 15, 2017, 
the parties entered into a stipulation whereby Attorney Bauer 
did not contest 13 of the counts; the OLR agreed to dismiss four 
counts; the parties agreed that four other counts could be 
amended to conform to the evidence; and Attorney Bauer contested 
seven counts that alleged he had converted client funds.  
¶7 
A brief evidentiary hearing was held on May 22, 2017. 
At the hearing, Attorney Bauer admitted mishandling the trust 
account but described what happened as being sloppy and the 
result of neglect.  He blamed some of the problems on the fact 
that "starting probably late 2014 up through mid-2015"1 he spent 
a lot of time in Washington, D.C.  He said: 
I neglected it.  I mean, in the end, I mean, I thought 
that -- it was one of those deals that I thought it 
was all going to be over the next day.  So I thought, 
                                                 
1 The mishandling of the trust account occurred between 
December 2013 and October 2014. 
No. 
2016AP1259-D   
 
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well, I'm going to get this over and get back and get 
things straight.  The next day went into the next day, 
and I was still not around. 
So all of a sudden the focus came on making sure that 
-- I guess more making sure -- I didn't have access to 
QuickBooks when I was out there, but I did have access 
on-line to the bank account.  So then I was suddenly 
more focused on just making sure that there was always 
money in the appropriate accounts to cover any checks 
that were being cut. 
¶8 
Attorney Bauer said that things came to a head when 
the firm's paralegal looked at the bank statements and saw the 
problems with the trust account.  She then notified Attorney 
Bach, who confronted Attorney Bauer.  Attorney Bauer said he 
apologized to Attorney Bach and admitted, "I should have asked 
for some help whether from him or the accountant when I knew I 
wasn't taking care of it properly."  
¶9 
The parties subsequently filed briefs discussing the 
seven contested counts.  On August 8, 2017, the referee issued a 
report accepting the stipulation and finding that the OLR had 
met its burden of proof with respect to five of the seven 
contested counts.  The referee found that Attorney Bauer had 
converted $376,818.63.  The referee found that the OLR had not 
met its burden of proof on the other two contested counts.  The 
referee said: 
During the period between December 2, 2013 and October 
16, 2014, Bauer carried out the unauthorized use of 
client trust funds for his own purposes.  He did so 
knowingly and with clear disregard for the rules of 
trust account maintenance.  The funds improperly 
handled were used to fill gaps in other clients' 
account balances or to infuse money into the firm 
business account and the account of Sports Advisors, 
Inc. 
No. 
2016AP1259-D   
 
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Bauer appears to see his offenses regarding the Trust 
Account as being related to sloppy business practices 
and nothing more.  The facts contained in the counts 
for which Bauer has now been found guilty suggest 
something well beyond sloppy work.  They strongly 
support the belief that Bauer saw his Trust Accounts 
as something akin to a slush fund.  He removed funds 
without permission and clearly seemed to constantly be 
in the process of "robbing Peter to pay Paul" and, in 
some cases, to pay Michael Bauer.  Such behavior is 
unacceptable at any level and especially onerous when 
carried out by a person licensed to practice law. 
¶10 The referee found that the OLR met its burden of proof 
on 
17 
trust 
account 
violations 
and 
five 
violations 
of 
SCR 20:8.4(c).  Attorney Bauer stipulated, and the referee 
agreed, that he violated the following trust account rules: 
SCR 20:1.15(b)(1);2 
former 
SCR 
20:1.15(b)(3);3 
former 
SCR 20:1.15(f)(1)a.;4 and former SCR 20:1.15(e)(4)c.5  Most rules 
                                                 
2 SCR 20:1.15(b)(1) provides:  
A lawyer shall hold in trust, separate from the 
lawyer's own property, that property of clients and 
3rd parties that is in the lawyer's possession in 
connection with a representation. All funds of clients 
and 3rd parties paid to a lawyer or law firm in 
connection with a representation shall be deposited in 
one or more identifiable trust accounts.  
3 Effective July 1, 2016, substantial changes were made to 
Supreme Court Rule 20:1.15, the "trust account rule."  See S. 
Ct. Order 14-07, (issued Apr. 4, 2016, eff. July 1, 2016). 
Because the conduct underlying this case arose prior to July 1, 
2016, unless otherwise indicated, all references to the supreme 
court rules will be to those in effect prior to July 1, 2016. 
Former SCR 20:1.15(b)(3) provided:  "No funds belonging to 
a lawyer or law firm, except funds reasonably sufficient to pay 
monthly account service charges, may be deposited or retained in 
a trust account."  
4 Former SCR 20:1.15(f)(1)a. provided: 
(continued) 
No. 
2016AP1259-D   
 
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were violated multiple times.  The five counts that Attorney 
Bauer had contested and the referee ultimately found had been 
proven by the OLR all involved violations of SCR 20:8.4(c).6  
Attorney Bauer had argued that the five SCR 20:8.4(c) counts 
were subsumed into the trust account counts and that the 
                                                                                                                                                             
Complete records of a trust account that is a 
draft account shall include a transaction register; 
individual client ledgers for IOLTA accounts and other 
pooled trust accounts; a ledger for account fees and 
charges, if law firm funds are held in the account 
pursuant to sub. (b)(3); deposit records; disbursement 
records; 
monthly 
statements; 
and 
reconciliation 
reports, subject to all of the following: 
a. The transaction register shall contain a 
chronological record of all account transactions, and 
shall include all of the following:  
1. the date, source, and amount of all deposits; 
2. the date, check or transaction number, payee 
and amount of all disbursements, whether by check, 
wire transfer, or other means; 
3. the date and amount of every other deposit or 
deduction of whatever nature; 
4. the identity of the client for whom funds were 
deposited or disbursed; and 
5. 
the 
balance 
in 
the 
account 
after 
each 
transaction.   
5 Former SCR 20:l.15(e)(4)c. provided: "A lawyer shall not 
make deposits to or disbursements from a trust account by way of 
an Internet transaction."  
6 SCR 20:8.4(c) provides: "It is professional misconduct for 
a lawyer to engage in conduct involving dishonesty, fraud, 
deceit or misrepresentation."  
No. 
2016AP1259-D   
 
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evidence was insufficient to support the allegations.  The 
referee found otherwise.  
¶11 On 
October 
13, 
2017, 
the 
referee 
issued 
a 
recommendation as to discipline.  While the OLR sought a two-
year suspension and Attorney Bauer suggested a 60-day suspension 
would be an appropriate sanction, the referee ultimately 
concluded that a one-year suspension was in order.  
¶12 The referee said while, in the end, Attorney Bauer 
made good on all of the accounts and no client lost any money, 
this did nothing to excuse Attorney Bauer's behavior since 
"Bauer had no right to use his client's funds without permission 
and the fact that he avoided getting caught for his behavior by 
'robbing Peter to pay Paul' in no way lessens the seriousness of 
these offenses."  
¶13 The 
referee 
noted 
that 
Attorney 
Bauer 
was 
an 
experienced attorney, having practiced law since 1988, so he 
could not claim he was not familiar with the supreme court rules 
regarding the management of trust accounts.  The referee said 
Attorney Bauer himself asserted that he appropriately managed 
his trust accounts before and after 2014 so he could not suggest 
he did not understand how to handle trust account issues 
appropriately.  The referee commented that "[t]here was little 
or no explanation from Bauer as to WHY the 'wheels came off' his 
trust account management practices in 2014."  
¶14 The referee said once confronted, Attorney Bauer 
admitted guilt as to many of the allegations; he fully 
cooperated with the OLR investigation; and he expressed remorse 
No. 
2016AP1259-D   
 
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for his misbehavior.  However, the referee went on to say, "That 
said, he did continue to suggest that his behavior was more in 
the nature of technical bookkeeping errors as opposed to 
intentional acts.  The facts . . . suggest otherwise."  
¶15 The 
referee 
termed 
Attorney 
Bauer's 
violations 
"extensive and long-lasting."  The referee said Attorney Bauer: 
Had numerous opportunities to stop his inappropriate 
manipulation of the trust accounts and yet he failed 
to do so.  He not only shifted funds around between 
clients but he moved funds completely out of the trust 
account and "made whole" his business account and 
Sports Advisor, Inc., accounts while borrowing money 
to fill the trust account gaps which he had created. 
Finally, he failed to seek help from those around him 
who could have, if asked, given him the guidance and 
expertise needed to put an end to what had become a 
downward spiral of misbehavior.  
¶16 The referee said the 60-day suspension suggested by 
Attorney Bauer was clearly inadequate, but on the other hand the 
two-year suspension sought by the OLR was excessive under the 
theory of progressive discipline given that Attorney Bauer had 
no previous disciplinary history.  Accordingly, the referee 
recommended a one-year license suspension and also recommended 
that Attorney Bauer be ordered to pay the full costs of the 
proceeding. 
¶17 Attorney Bauer appealed the referee's recommendation 
for a one-year suspension but after all briefs were filed he 
voluntarily dismissed his appeal.  
¶18 A referee's findings of fact are affirmed unless they 
are clearly erroneous.  Conclusions of law are reviewed de novo.  
See In re Disciplinary Proceedings Against Eisenberg, 2004 WI 
No. 
2016AP1259-D   
 
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14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747.  This court may impose 
whatever sanction it sees fit, regardless of the referee's 
recommendation.  See In re Disciplinary Proceedings Against 
Widule, 2003 WI 43, ¶44, 261 Wis. 2d 45, 660 N.W.2d 686.  
¶19 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 
Bauer violated the supreme court rules set forth above.  
¶20 With respect to the appropriate level of discipline, 
upon careful review of this matter, we agree with the referee's 
recommendation for a one-year suspension of Attorney Bauer's 
license to practice law in Wisconsin.  Although no two 
disciplinary proceedings are identical, we find support for the 
referee's recommended sanction in our decision in In re 
Disciplinary Proceedings Against Goldstein, 2010 WI 26, 323 
Wis. 2d 706, 782 N.W.2d 388.  
¶21 Attorney Goldstein converted nearly $70,000 from three 
estates where he had served as a special administrator or 
personal 
representative. 
 
Like 
Attorney 
Bauer, 
Attorney 
Goldstein's clients sustained no actual loss.  Like Attorney 
Bauer, Attorney Goldstein had no prior discipline over what had 
been an otherwise distinguished 33-year legal career.  
¶22 Attorney Goldstein was found to have committed 21 
counts 
of 
misconduct, 
including 
six 
counts 
of 
violating 
SCR 20:8.4(c).  Attorney Goldstein's situation involved some 
aggravating circumstances that are not present here.  Attorney 
Goldstein paid both personal and business expense and financed 
No. 
2016AP1259-D   
 
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his personal real estate investments out of the converted funds. 
Attorney Goldstein's actions actually deprived his clients of 
money 
until 
he 
repaid 
the 
funds. 
 
Attorney 
Goldstein's 
conversions took place over a long period of time.  Attorney 
Goldstein lied in his statements to the OLR, and he refused to 
acknowledge the wrongful nature of his misconduct.  Due to these 
aggravating factors, which are not present here, Attorney 
Goldstein received a two-year license suspension. 
¶23 Although the amounts of the conversions at issue in 
this case far exceed those in Goldstein, Attorney Bauer 
cooperated with the OLR, and he entered into a partial 
stipulation.  Unlike the situation in Goldstein, none of 
Attorney Bauer's clients lost any money.  Thus, a two-year 
suspension 
is 
not 
warranted. 
 
However, 
Attorney 
Bauer's 
misconduct is nonetheless very serious and does warrant a 
significant sanction. 
¶24 The referee found that Attorney Bauer committed five 
violations of SCR 20:8.4(c).  As the referee noted, Attorney 
Bauer made numerous improper transfers of multiple clients' 
funds between his firm's trust account, the firm's business 
account, and accounts belonging to Attorney Bauer's side 
business, Sports Advisors, Inc.  These labyrinthine transfers 
support the referee's comments that Attorney Bauer saw his trust 
account "as something akin to a slush fund" and that the 
transfers "seemed to constantly be in the process of 'robbing 
Peter to pay Paul' and, in some cases, to pay Michael Bauer."  
The transfers continued for nearly one year. Attorney Bauer was 
No. 
2016AP1259-D   
 
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an experienced attorney who should have known that the transfers 
were improper.  We agree with the referee that Attorney Bauer's 
repeated acts of dishonesty, fraud, deceit and misrepresentation 
in converting $376,000 in client funds, along with his failure 
to comply with multiple supreme court rules regarding trust 
account management, warrant a one-year suspension.  As is our 
usual custom, we also find it appropriate to assess the full 
costs of the proceeding against Attorney Bauer.  
¶25 IT IS ORDERED that the license of Michael R. Bauer to 
practice law in Wisconsin is suspended for a period of one year, 
effective June 27, 2018. 
¶26 IT IS FURTHER ORDERED that within 60 days of the date 
of this order, Michael R. Bauer shall pay to the Office of 
Lawyer Regulation the costs of this proceeding, which are 
$15,727.40 as of April 25, 2018. 
¶27 IT IS FURTHER ORDERED that Michael R. Bauer shall 
comply with the provisions of SCR 22.26 concerning the duties of 
an attorney whose license to practice law has been suspended. 
¶28 IT IS FURTHER ORDERED that compliance with all 
conditions of this order is required for reinstatement.  See 
SCR 22.29(4)(c).  
 
No. 
2016AP1259-D   
 
 
 
1