PROVIDENCE — The Rhode Island Supreme Court has suspended a lawyer who is accused of taking $357,000 from a home-refinancing transaction and using most of it to make a loan that carried a 15-percent interest rate.

The court suspended Benjamin Wyzansky’s law license last week after its chief disciplinary counsel, David D. Curtin, accused him of “serious professional misconduct,” and Wyzansky failed to file an objection or appear at a scheduled hearing. The court also ordered Curtin to take possession of Wyzansky’s client files and accounts.

Wyzansky, 38, who has abandoned his Pawtucket law office and is living in Woonsocket, last night told The Journal, “I believe I was defrauded, and I am confident that I will be vindicated.” He declined to comment further, citing pending litigation and the advice of his lawyers.

Wyzansky’s suspension comes less than two months after the Supreme Court disbarred a Cranston lawyer, Pasquale A. Scavitti III, who admitted stealing more than $2.5 million from a dozen homeowners who were refinancing or buying new homes.

“I can’t say that it’s a trend,” Curtin said in an interview yesterday. While the Wyzansky and Scavitti situations have obvious similarities, “they appear to be done for different reasons,” he said.

So what precautions can people take if they’re buying homes or refinancing? “Make sure you get title insurance,” Curtin said. “And make sure the person issuing the policy is in good standing with the title insurance company.”

In January, Wyzansky represented Southern Colorado National Bank and Flagstar Bank, serving as the “settlement agent” in the refinancing of a $360,000 first mortgage on a home in Peabody, Mass., according to a lawsuit filed by a title insurance company. The owners of the Peabody property are Edward P. and Christina A. Veiga.

Wyzansky was supposed to use $357,867 to pay off the Veigas’ existing mortgage with Washington Mutual, but the lawsuit charges that he instead used the money to make a $350,000 loan to an East Providence company, M&M Iron Works, and its president, Mario Perretta, of Warwick.

The lawsuit claimed that “Wyzansky has admitted that he used the funds entrusted to him to make a loan to Mario Perretta and M&M Iron Works, LLC.”

Curtin noted that a promissory note called for Perretta to repay the principal within a year “inclusive of” a 15-percent interest rate. But he said he is not sure why Wyzansky did what he did.

“The whole thing smells,” Curtin said. “But the real problem is that $357,000 was stolen from a real estate transaction, and that’s why he’s on interim suspension pending further proceedings.”

For a while, Wyzansky was able to conceal what he’d done by continuing to make monthly payments on the Washington Mutual loan, according to the lawsuit.

But eventually the Veigas discovered that instead of having a single $360,000 mortgage, they had two mortgages totaling about $720,000, and Washington Mutual threatened to foreclose, the lawsuit says.

“Fortunately, these people had title insurance, which paid the loss,” Curtin said.

On Sept. 5, the California-based First American Title Insurance Company filed its lawsuit against Wyzansky, Perretta and M&M Iron Works. The lawsuit accused Wyzansky of breach of contract, gross negligence, “conversion/embezzlement” and fraud.

Also, the lawsuit aims to void the transfer of the money to Perretta and M&M Iron Works “as a fraudulent conveyance, laundering of monetary instruments and receipt of stolen goods.” The suit claims Perretta “knew or should have known that the proceeds of the loan transaction” were stolen.

On Sept. 10, Superior Court Judge Michael A. Silverstein issued a temporary restraining order freezing assets of Wyzansky, Perretta and M&M Iron Works. Silverstein has scheduled another court hearing for Oct. 22.

The lawsuit noted that on April 20 the state police arrested Wyzansky on three felony counts of passing fraudulent checks of more than $1,000.

Curtin said those felony charges involved three checks that Wyzansky made out to Perretta in amounts of $24,700, $25,000 and $26,000. He said Perretta cashed the checks at a cash-checking service, which notified the state police when the checks bounced.

Curtin said the checks were drawn on the account of “TCG Financial,” which Wyzansky described as a mortgage broker company that he formed but that never did business. He said other, earlier checks from Wyzansky to Perretta did not bounce. “On its face, the checks were not drawn on a client account, but it appears that the funding would have come from the money stolen from this real estate transaction,” he said.

In a court petition, Curtin said Wyzansky came to his office on Sept. 23 in response to a subpoena.

“When he was asked if he had paid the funds to Washington Mutual, [Wyzansky] declined to answer, asserting his Fifth Amendment privilege against self-incrimination,” Curtin wrote in the petition. “When asked if had converted the funds for his own use, [Wyzansky] replied ‘no,’ but asserted his Fifth Amendment privilege when asked if he had given those funds for a third party.”

Curtin said the Supreme Court cannot discipline a lawyer for asserting his Fifth Amendment right. But since the lawyer-discipline process is a civil matter and not a criminal case, the court is allowed to “draw an adverse inference” from the fact that Wyzansky “took the Fifth,” he said.

Since Wyzansky has not accounted for more than $350,000, “an inference can be drawn that those funds have been misappropriated,” Curtin stated in court papers.

Curtin said he has notified the state police and that they are conducting a criminal investigation.

efitzpat@projo.com