Judge orders $1 million returned to man’s estate
Officials say agent took advantage of customer
Blanche Berenzweig, the ex-insurance agent who regulators said illegally pocketed more than $1 million from the estate of a 92-year-old man she befriended, was removed as the administrator of the estate and must cough up the annuity money she took, a circuit court judge ruled this week.
The order by Milwaukee County Circuit Judge Marshall Murray is the latest setback for Berenzweig, who regulators say netted an illegal profit of more than $1 million by taking advantage of LeRoy Ern. The regulators described Ern as an “isolated, elderly customer.”
Berenzweig was a Mequon financial adviser and insurance agent who was made sole beneficiary of Ern’s will. The retired factory worker who lived the life of a hermit left an estate of more than $1.6 million when he died of advanced dementia in 2016.
Included in that amount are two annuities that paid Berenzweg $1.01 million. Ern also gave her power of attorney and named her the administrator of the estate.
Ern’s nieces and nephew are challenging the will, saying that Berenzweig improperly used her influence to become the beneficiary of the estate. Their uncle, who they seldom saw, closeted himself in a north side home that was a fire trap and in deplorable condition. The house in the 4600 block of North Parkway Avenue was filled with garbage and heated by the stove. Ern was removed from the home in 2013.
The question of whether the heirs or Berenzweig should inherit the money is scheduled for trial in October.
Murray named Milwaukee attorney James Collis as special administrator of the estate and ordered that Berenzweig, 70, “immediately forward” the $1.01 million to the estate.
That may be easier said than done. “It’s going to take a while — I don’t think she’s going to sign a check tomorrow,” said Mike Ganzer, Berenzweig’s lawyer. “We’re working with Jim Collis to comply with the order.”
The problem, Ganzer said, is Berenzweig, who lives in Mequon and near Las Vegas, no longer has all of the money. Berenzweig said in an affidavit that she paid $237,733 in taxes on the annuity proceeds and now Ganzer said she must ask the IRS to return the cash.
As for the rest of the annuity proceeds, Ganzer said, “she invested the balance in an annuity and kept some for herself.” He said she kept about $30,000 for herself.
Kevin Demet, who represents 11 of Ern’s nieces and nephews challenging the will, questioned whether all of the money in the estate could be accounted for.
“We’re very concerned that there is a half a million missing,” Demet said.
Demet noted that Berenzweig’s June 20 affidavit said the annuity money was being held in three Milwaukee area financial institutions. Attached to the affidavit were bank statements showing the three Berenzweig accounts held about $1 million.
Demet noted that the estate is worth about $1.6 million.
Demet also argued that Berenzweig has mishandled the estate proceeds by putting the money in her personal accounts and by using those funds to pay taxes.
“She took $237,733 from LeRoy’s money to pay her own personal income taxes even though she violated the law to get the annuity money into her name,” Demet wrote in a June brief urging that Berenzweig be removed as the estate administrator.
Ganzer brushed off Demet’s claims saying there is a fourth account containing about $400,000 that will also be turned over.
Berenzweig’s insurance license was revoked following two days of hearings last year. State Insurance Commissioner Ted Nickel said in a statement last month that she “engaged in multiple unfair trade practices involving an elderly consumer.”
In addition, the commissioner said, “she appointed herself the consumer’s power of attorney, effectuated personal financial transactions, and knowingly allowed herself to become beneficiary of the consumer’s annuities, all violations of state law.”
Berenzweig is appealing the order by Nickel revoking her insurance license.