Origina l Jurisd ict io n Per Curiam

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STATE OF MINNESOTA

IN SUPREME COURT

A19-0173

Origina l Jurisd ict io n Per Curiam

In re Petition for Disciplinary Action against
Paul Robert Hansmeier, a Minnesota Attorney, Filed: April 22, 2020
Registration No. 0387795. Office of Appellate Courts

________________________

Susan M. Humiston, Director, Timothy M. Burke, Deputy Director, Office of Lawyers
Professional Responsibility, Saint Paul, Minnesota, for petitioner.

Paul R. Hansme ier, Sandstone, Minnesota, pro se.

________________________

S Y L L A B U S

Disbarme nt is the ap propriate discipline for an attorney who made knowing
misrepresentations and omissions of material fact in a personal bankruptcy proceeding.
Disbarred.
O P I N I O N
PER CURIAM.
The Director of the Office of Lawyers Responsibility filed a petition for discip li na r y
action against respondent Paul Hansmeier, alleging that Hansmeier violated Minneso ta
Rules of Professional Conduct 8.4(c) and (d), by making knowing misrepresentations and
omissions of material fact in a personal bankruptcy proceeding. Based on the referee’s
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findings and our own review of the record, we conclude that Hansmeier’s miscond uct
warrants disbarment.
FACTS
Paul Hansmeier was admitted to th e practice of law in Minnesota in 2007. In
September 2016, Hansme ie r was indefinitely suspended from the practice of law with no
right to petitio n for 4 years. In re Hansmeier, 884 N.W.2d 863, 863 (Minn. 2016) (order).
He was suspended for his miscond uct in four civil matters arising out of a porn fraud
scheme he began in 2011 .1 As relevant here, Hansmeier’s misconduct included making
misrepresentations to tribunals, making false statements in legal documents and during
legal proceedings, transferring funds to avoid paying sanctions, and perpetrating a fraud
upon the court. Id. Hansmeier remains suspended.
The case before us involves misconduct related to Hansmeier’s personal
bankruptcy. In July 2015, Hansmeier filed a Chapter 13 voluntary petition for bankrup tcy.
His filings included schedules A–J and a statement of financial affairs, which he signed as
true and correct under penalty of perjury. He also submitted a Chapter 13 plan.

1 Hansmeier’s misconduct in those matters violated Minn. R. Prof. Conduct 3.1,
3.3(a)(1), 3.4(c), 3.4(d), 4.1, 8.4(c) and 8.4(d); Ill. R. Prof. Conduct 3.1, 3.3(a), 3.4(c), 4.1,
8.4(c) and 8.4(d); and Cal. R. Prof. Conduct 3–200 and 5–200. Hansmeier, 884 N.W.2d at
863.
The porn fraud scheme also resulted in federal criminal charges. See United States
v. Hansmeier, No. 16cr 334, 2017 WL 3971874 (D. Minn. Sept. 8, 2017). Hansme ier was
convicted of conspiracy to commit mail fraud and wire fraud and conspiracy to commit
money laundering. He was sentenced on June 14, 2019, to 14 years in prison followed by
2 years of supervised release. He is to pay restitution in the amount of $1,541,527.37.
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Four months later , the U.S. bankruptcy trustee filed a motion to convert the
bankruptcy from Chapter 13 to Chapter 7 based on Hansmeier’s alleged bad faith and
failure to propose a confirmable plan. On December 3, 2015, the bankruptcy court granted
the motion.
The bankruptcy court found that Hansmeier: (1) failed to disclose a trust, si gnificant
monetary transfers leading up to the filing of the petition, and accurate household expenses;
(2) failed to notify the trustee and court of his intent to sell his home and that he had moved
to a rental property; and (3) failed to amend his schedules to reflect a substantial reductio n
in monthly expenses. The court stated that:
[t]he mislead in g informatio n on the schedules, the statement of financ ia l
affairs, Chapter 13 plan, timing of the case being the filing, 2 coupled with
[Hansmeier’s] pre -petition actions and omissions before various courts
across the country indicate that this case was designed for one purpose only,
to thwart the collection efforts of creditors.

A bankruptcy appellate panel for the Eighth Circuit Court of Appeals affirmed. As
explained in that opinio n:
‘A Chapter 13 petition filed in bad faith may be dismissed or converted for
cause under 11 U.S.C. § 1307(c). Such cause includes filing a bankruptcy
petitio n in bad faith. The bad faith determinatio n focuses on the totality o f
the circumstances, specifically: (1) whether the debtor has stated his debts
and expenses accurately; (2) whether he has made any fraudule nt
representation to mislead the bankruptcy court; or (3) whether he has unfair l y
manipulated the bankruptcy code.’ Each of these factors was present in this
case.

2 In one of several civil matters in which Hansmeier was sanctioned and ordered to
pay fees, the district court issued a post -judgment discovery order requiring Hansmeier to
turn over financ ia l records. He filed for bankruptcy the day before the court-ordered filing
deadline.
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In re Hansmeier, 558 B.R. 299, 303 (B.A.P. 8th Cir. 2016) ( quoting Molitor v. Eidson, 76
F.3d 218, 220 (8th Cir. 1996)).
On January 29, 2019, the Director filed a petition for discipline with our court,
alleging that Hansmeier had violated Rules 8.4(c) and (d), Minnesota Rules of Professional
Conduct. The Director asserted that, “[i]n continuatio n of his efforts to avoid court ordered
disclosure of financial information, hide assets and avoid payment of sanctions entered
against him, respondent filed for bankruptcy and, in his bankruptcy filings and during the
bankruptcy proceeding, knowingly made false and misleading statements and omissions of
material fact.” The Director alleged five misrepres e nta t io ns by omissio n—the same
misreprese nta t io ns found by the bankruptcy judge when granting the motion to convert.
An evidentiary hearing was held before a referee on June 27, 2019. The referee
ordered a transcript to assist in the preparation of his report. On July 31, 2019, the referee
issued his findings of fact, conclusions of law, and recommendation for discipline. The
referee found that four of the five misrepresentations alleged in the petition were
substantiated by the record.
First, the referee found that Hansme ie r failed to disclose the Mill Trust. Hansmeier
established t he Mill Trust—a self-settled, irrevocable trust with a spendthrift clause —in
2010. Hansmeier is the grantor and sole manager of the trust, and his wife is the trustee.
His wife testifie d in her Rule 2004 bankruptcy examination that, as trustee, she “was in
charge of using the money as [she] saw fit for [their] family.” Hansmeier retained the right
to veto any distrib utio n of funds. Schedule B in the bankruptcy filing shows that
Hansme ier disclosed only an account called “SELF SETTLED TRUST MONYET” with a
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value of $8,554. On the statement of financial affairs, Hansmeier wrote: “Debtor created
a trust for wife and kids in early 2010 named Monyet, LLC. Trust now has $8544.00.”
The Mill Trust and Monyet, LLC, are separate, but related, entities. The Mill Trust is not
disclosed by name anywhere in the filings.
Second, the referee found that Hansmeier failed to disclose transfers totaling in
excess of $500,000. Between May 2013 and May 2014, 19 wire transfers were completed
from the brokerage account for Monyet, LLC to various entities. The final transfer was of
all available cash in the account. In total, the 19 transfers added up to $590,333. Of that
amount, $245,000 was transferred to Hansmeier’s wife. No transfers were disclosed in the
bankruptcy filings.
Third, the referee found that Hansmeier failed to notify the trustee and bankruptcy
court of his intent to sell his home , a condominium . In his July bankruptcy filin g,
Hansmeier disclosed a one-half interest in a Minneapo lis condominium with a total value
of $885,000. In September, Hansme ie r sent an email to his bankruptcy counsel about the
possibility of selling his home. In September or October, Hansmeier and his wife entered
into a listing agreement with a real estate broker. As of late October , si gnificant
renovations of t he condominium were underway. Hansme ier only filed a motion to s e ll
the condominium with the bankruptcy court on November 25—after the bankruptcy trustee
discovered the property listing—and by that time he had already entered into a purchase
agreement stating that the home would be sold on December 10. The property sold for
$1.2 million. The bankruptcy court found it reasonable to conclude Hansmeier might never
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have disclosed the sale nor turned over sale proceeds without t he trustee discovering the
property was listed.
Fourth, the referee found that Hansmeier failed to notify the trustee and bankruptcy
court of his move to a new residence and the resulting change in househo ld expenses,
although the referee noted that the change was a temporary increase, rather than decrease,
of those expenses. On October 5, 2015, Hansmeier and his wife moved to a rental property
in Woodbury under a six -month lease. For a time, Hansmeier’s wife was paying the
Minneapolis condominium mortgage payments and the Woodbury rent payments. This
move was not disclosed nor were the bankruptcy schedules amended to reflect the change
in househo ld expenses. The move was first addressed during the bankruptcy examinat io ns
in late October.
As to the fifth m isreprese nta t io n alleged in the petitio n, the referee was unable to
find that Hansmeier knowingly misrep resented his househo ld expenses. Hansmeier
testified in his examinatio n that his wife pays all monthly expenses, includ ing the mortgage
loan and househ old expenses. On Schedule J, Hansmeier claimed that the monthly
househo ld expenses totaled $9,779. On Schedule I, he claime d his wife’s net monthly
income was $ 4,889.41. Although there is a discrepancy between the expenses and the
income purportedly used to pay the expenses, the referee acknowledged the differe nce
could have been made up from other sources.
The referee concluded that “[t] he Director has prove [n] by clear and convinc ing
evidence that the Respondent made knowingly false statements and o miss io ns in his
personal bankruptcy matter in violatio n o f Rule[s] 8.4(c) and (d), [Minneso ta Rules o f
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Professio nal Conduct].” Based on these violations, six aggravating factors, and no
mitigating factors, the referee recommended disbarment.
ANALYSIS

Because neither party ordered a transcript of the di sciplinary hearing, we “ accept
[the] referee’s factual findings as conclusive” and “similarly accept as conclusive the
conclusions that the referee draws from the facts, such as whether the attorney’s con duct
violated the Rules of Professional Conduct.” In re Montez , 812 N.W.2d 58, 66 (Minn.
2012); see Rule 14(e), Rules on Lawyers Professio nal Responsib ility (RLPR).3 We review
de novo “the referee’s interpretation of the Rules of Professional Conduct, an d other
conclusions of law that do not rely on the referee’s factual find ings.” Montez, 812 N.W.2d
at 66.
The only issue before us is the appropriate discipline to impose for Hansmeier’s
miscond uc t. In deciding wha t discipline is appropriate, we afford great weight to the
referee’s recommendation, but we alone make the final determination. In re Coleman, 793
N.W.2d 296, 308 (Minn. 2011). The purposes of attorney discipline “are to protect the
public, to protect the judicial system, and to deter future misconduct by the disciplined
attorney as well as by other attorneys. ” In re Oberhauser, 679 N.W.2d 153, 159 (Minn.

3 It does not change our analysis that the referee ordered a transcript to assist in the
preparation of his report. See In re Garcia, 792 N.W.2d 434, 442 (Minn. 2010). In Garcia,
as in this case, only the referee ordered a transcript. The attorney in Garcia relied on the
referee’s decision to order a transcript when he informed the court of his challenge und er
Rule 14(e), RLPR. Because the attorney subsequently failed to file a brief, however, w e
upheld the referee’s findings and conclusions. Id. at 442. Here, there is no evidence that
Hansmeier relied on the referee’s decision to order a transcript, nor did he file a brief.
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2004). In determining an appropriate disciplinary sanction, we consider “(1) the nature o f
the miscond uct; (2) the cumulative we ight of the discipli na r y violat io ns ; (3) the harm to
the public; and (4) the harm to the legal profession.” In re Nelson, 733 N.W.2d 458, 463
(Minn. 2007). We impose sanctions “on a case -by-case basis after considering both
aggravatin g and mitigating circumstanc es, as well as looking to similar cases for
guidance. ” Oberhauser, 679 N.W.2d at 159.
A.
First, we consider the nature of the misconduct. The referee concluded that
Hansmeier knowingly made false statements and omissions in his personal bankruptcy
matter. We have stated that “[h]onesty and integrity are chief among the virtues the pub lic
has a right to expect of lawyers” and that “[a] ny bre ach of that trust is misconduct of the
highest order and warrants severe discipline.” In re Ruffenach, 486 N.W.2d 387, 391
(Minn. 1992); see also In re Nwaneri , 896 N.W.2d 518, 525 (Minn. 2017) (noting that
making false statements to a court is “signif ic ant misconduct”).
We have suspended or disbarred attorneys who have made false statements under
oath to a court. See Nwaneri, 896 N.W.2d at 526 (collecting cases) ; In re Schmidt , 402
N.W.2d 544, 548 (Minn. 1987) (same). We have also suspended or disbarred attorneys for
engaging in miscond uct during personal bankruptcy proceedings. Compare In re Graham,
503 N.W.2d 476, 480 (Minn. 1993) ( disbarment), with In re Crabtree, 916 N.W.2d 869,
870 (Minn. 2018) (order) (9-month suspensio n), and In re Halverson, 731 N.W.2d 147,
149 (Minn. 2007) (order) (6-month suspensio n).
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The referee found that Hansmeier made misrepresentations by omission in his
schedules and statement of financial affairs; failed to notify the trustee and court of materia l
financial changes througho ut the course of the bankruptcy; and gave “incorrect and false
answers as well as feigned ignorance of matters in which [ he] was intimately involved” in
his examination. The referee found that Hansmeier’s testimony at his disciplinary hearing
was similar l y untrustworthy. The false statements to the bankruptcy court and in his
examinatio n were made under oath, and the omissio ns in the bankruptcy filings were
similar l y done under penalty of perjury. Further, the referee concluded that the miscond uct
was “knowing” and “deliberate.” The nature of this misconduct warrants severe discipline.
B.
Second, we consider the cumulative weight of the violations. In doing so, “we have
considered the number of rules violated and whether the misconduct was a single, isolated
incident or a brief lapse of judgment.” In re O’Brien, 894 N.W.2d 162, 166 (Minn. 2017).
“[T]he cumulative weight and severity of multip le discip lina r y rule violat io ns may comp e l
severe discipline even when a single act standing alone would not have warranted such
discipli ne. ” Oberhauser, 679 N.W.2d at 160.
The referee found that Hansmeier had committed mult ip le violat io ns of the same
rules over the course of his entire bankruptcy proceeding, engaging in a pattern of
miscond uct. In his July filings, he failed to disclose the Mill Trust and transfers totaling in
excess of $500,000. His October examination, taken under oath, was “replete with
incorrect and false answers as well as feigned ignorance.” And, for at least one month,
Hansmeier failed to disclose his intent to sell the Minneapolis condo mini um, his move to
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the Woodbury rental property, and his change in living expenses. This behavior was not a
single, isolated incident.
C.
Third, we consider the harm to the public and the legal profession . The
administratio n of justice relies upon the integrity of attorneys , wh o act as officers of the
court. In re Schmidt, 402 N.W.2d 544, 548 (Minn. 1987). “[M]aking false statements to
a court harms the public and the legal profession.” Nwaneri, 896 N.W.2d at 526. Lawyers
who have demonstrated a lack of truthfulness and cand or are subject to severe discipline.
Schmidt, 402 N.W.2d at 549 (collecting cases disbarring attorneys for false representatio ns
to tribunals).
Although we typically look to client harm to gauge harm to the public, s ee In re
Hulstrand, 910 N.W.2d 436, 443 (Minn. 2018), Hansmeier’s misconduct occurred in his
personal bankruptcy, not in the course of client representation. Looking to public harms
in that area, we recognize that i t is a funda me nta l purpose of bankruptcy “to provide an
equal opportunity for all creditors to share in the assets of the debtor available for
di stri bu tion .” In re Johnson, 8 B.R. 371, 374 (Bankr. D. Minn. 1981). The bankruptcy
judge found that Hansme ie r’s filing “was designed for one purpose only, to thwart th e
collection efforts of creditors.” The referee similar l y found that Hansmeier’s miscond uct
“was calculated and motivated by his desire to hide assets from his creditors in the
bankruptcy case.” Hansmeier’s pattern of false and misleading statements to tribunals and
his willingness to abuse the legal process at the expense of his creditors pose a si gnificant
risk of harm to the public and legal profession.
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D.
Fourth, we consider aggravating and mitigatin g factors. The referee concluded there
were no mitigat i ng factors, and the record does not suggest that any would apply. The
referee further concluded that there were six aggravating factors . Three of
these—inte nt io na l miscond uct, miscond uc t in offic ia l legal proceedings, and pattern of
miscond uc t—go to the nature and cumulative weight of the miscond uct and were
improperly considered as aggravating factors . T he remaining three —previous similar
discipline, lack of remorse, and selfish motive—were appropriate ly considered.
We have imposed a harsher sanction when an attorney has been disciplined fo r
professio na l miscond uct in the past. Oberhauser, 679 N.W.2d at 160; see also In re
McCoy, 447 N.W.2d 887, 889–90 (Minn. 1989) (discussing the attorney’s discip li nary
history even when a portion of the alleged miscond uct predated the prior disciplinary
proceeding). “Prior discip linary history ‘weighs heavily’ if the prior discip line was fo r
similar miscond uc t. ” Hulstrand, 910 N.W.2d at 444 (quoting In re Tigue , 900 N.W.2d
424, 432 (Minn. 2017)). Hansmeier was publicly disciplined in 2016 for misconduct which
is substant ia l ly simila r to the miscond uct at issue here , includ i ng m aking
misrepresentations to tribunals, making false statements in legal documents and during
legal proceedings, transferring funds to avoid paying sanctions, and perpetrating a fraud
upon the court . He was indefinitely suspended for a minimum of 4 years and remains
suspended today.
An attorney’s lack of remorse may also be used as an aggravating factor. In re
Rebeau, 787 N.W.2d 168, 176 (Minn. 2010). The referee found, and the record confirms,
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that Hansme ie r exhib ited no remorse and did not accept responsibility for his miscond uc t .
In fact, one of his asserted affirmative defense s before the referee was hi s good faith
reliance on the advice of his bankruptcy counsel. That very same counsel had withd raw n
from representing Hansmeier in his bankruptcy appeal because she claimed her obligatio n
of truthfulness to the court clashed with her obligatio ns to Hansme ier, her client.
An attorney’s selfish motive may aggravate miscond uct. In re Fairbairn, 802
N.W.2d 734, 747 (Minn. 2011). The referee found that Hansmeier engaged in c alcula ted
miscond uc t with the sole motivatio n to advance his financial status at the expense of others.
The record amply supports the conclusio n that Hansmeier’s miscond uct in his perso nal
bankruptcy proceeding was motivat ed by self-interest.
E.
Finally, we look to similar cases to “ensure that our disciplinary decision is
consistent with prior sanctions.” In re Nathanson, 812 N.W.2d 70, 80 (Minn. 2012). Our
decision in In re Graham , 503 N.W.2d 476 (Minn. 1993), is particularly instructive. In
that case, an attorney was disbarred because he had “(1) fabricated documents and given
false testimony; (2) engaged in a pattern of submitting false evidence and fabricated
documents; (3) failed to file federal income tax returns; (4) engaged in a pattern of conduct
prejudic ia l to the adminis tra t io n of justice; and (5) failed to cooperate in the disciplina ry
proceeding.” Graham, 503 N.W.2d at 477. The fabricated documents and false testimo ny
occurred in the attorney’s personal bankruptcy proceeding, and many of the attorney’s acts
of misconduct w ere motivated by the attorney’s willingness to abuse the legal system for
personal financial gain. Id. at 479–80.
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Hansme ier, like the attorney in Graham, has shown a n unrelenting readiness to
engage in intentio nal miscond uct for his own personal gain . H ansme ier ’s mult i-year
history of misconduct is defined by “ dishonesty, fraud, deceit, [and] misrepresentatio n. ”
Minn. R. Prof. Conduct 8.4(c). He has been disciplined by this court, has had civil
sanctions entered against him, and has been convicted o f federal crimes. Hansmeier’s
miscond uc t in the current discipli na r y action is merely the latest in a long series of attempts
to escape the consequences of his actions and to abuse the very legal system he swore to
uphold. Hansme ie r’s miscond uc t is prejudic ia l to, and is truly the antithesis of, the
adminis tr at io n of justice. See Minn. R. Prof. Conduct 8.4(d) (stating that it is professiona l
misconduct for a lawyer to “e ngage in conduct that is prejudicial to the administratio n o f
justice”). We conclude that, in light of Hansme ie r’s serious misconduct, the appropriate
discipli ne is disbarme nt.
CONCLUSION
For the foregoing reasons, r espondent Paul R. Hansmeier is disbarred from the
practice of law in the State of Minnesota, effective on the date of this opinion. Respondent
shall comply with Rule 26, RLPR, and shall pay $900 in costs pursuant to Rule 24(a) ,
RLPR.
Disbarred.