Title: Mahoning Cty. Bar Assn. v. Wagner

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Mahoning Cty. Bar Assn. v. Wagner, Slip Opinion No. 2013-Ohio-5087.] 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2013-Ohio-5087 
MAHONING COUNTY BAR ASSOCIATION v. WAGNER. 
[Until this opinion appears in the Ohio Official Reports advance sheets,  
it may be cited as Mahoning Cty. Bar Assn. v. Wagner,  
Slip Opinion No. 2013-Ohio-5087.] 
Attorney—Misconduct—Felony convictions arising from fraudulent mortgage 
applications—Engaging in conduct involving dishonesty—Committing an 
illegal act—Indefinite suspension. 
(No. 2013-0221—Submitted April 10, 2013—Decided November 21, 2013.) 
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and 
Discipline of the Supreme Court, No. 12-023. 
____________________ 
Per Curiam. 
{¶ 1} Respondent, Michael James Wagner of Canfield, Ohio, Attorney 
Registration No. 0016371, was admitted to the practice of law in Ohio in 1981. In 
January 2012, we imposed an interim felony suspension on Wagner’s license 
pursuant to Gov.Bar R. V(5)(A)(4) after receiving a certified copy of the 
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judgment entry of his conviction.  In re Wagner, 131 Ohio St.3d 1430, 2012-
Ohio-231, 960 N.E.2d 469. 
{¶ 2} In a complaint certified by a probable-cause panel of the Board of 
Commissioners on Grievances and Discipline in April 2012, relator, Mahoning 
County Bar Association, charged Wagner with three counts of violating the Rules 
of Professional Conduct arising from his participation in submitting false 
mortgage-loan applications, including his conviction of the federal offense of 
conspiracy to commit wire fraud. 
{¶ 3} In November 2012, the parties submitted stipulations of fact and 
misconduct and of aggravating and mitigating factors.  They suggested that the 
appropriate sanction for Wagner’s misconduct is an 18-month suspension, with 
credit for the interim felony suspension imposed earlier that year.  They also 
submitted three exhibits: the federal indictment, plea agreement, and judgment of 
conviction. 
{¶ 4} A panel of the board conducted a hearing on November 26, 2012, 
at which Wagner testified about his misconduct.  At the hearing, Wagner 
submitted eight letters from supporters and judges documenting his good 
character and excellent reputation for his professionalism and contributions to the 
community.  The panel recommended that Wagner be indefinitely suspended 
from the practice of law with credit for the interim felony suspension imposed on 
January 24, 2012.  The board modified the findings of fact and conclusions of law 
to dismiss a stipulated violation, but otherwise adopted the panel’s findings, 
conclusions, and recommended sanction. 
Misconduct 
{¶ 5} From July 2005 through January 2006, Wagner was the title agent 
for seven real estate transactions in Mahoning and Trumbull counties that later 
were determined to be part of a fraudulent scheme conducted by one Romero 
Minor.  Wagner prepared “HUD-1” settlement statements for the seven 
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properties, each of which had straw buyers/investors who had been recruited by 
Minor and others. 
{¶ 6} According to the indictment, unbeknownst to the straw 
buyers/investors, Minor negotiated the purchase of the properties from the sellers 
at one price, had the straw buyers/investors purchase the properties at a much 
higher price, and kept the excess funds generated by the fraudulently inflated 
price. The transactions involved inflated property valuations and large concealed 
distributions paid directly to Minor that were made to appear to lenders as 
legitimate payouts of preexisting note debts.  Wagner prepared the settlement 
statements based on information furnished to him by Minor and others.  Wagner 
did not question the accuracy of the information because the property appraisals 
had been performed by appraisers who were on the list of approved appraisers 
maintained by the lending institutions. 
{¶ 7} For three of the seven transactions, Wagner did not understand that 
the information provided by Minor was false.  As he continued to work with 
Minor, however, Wagner realized that the structure of the transactions Minor 
presented was suspect.  He maintained at the hearing that he did not actually 
know that the information provided by Minor was false.  But for the next four 
transactions, he did not question the accuracy of the information or report his 
suspicions, and consequently he was willfully blind to what he should have 
known was false information and documentation.  Wagner was paid no more than 
the fee he typically would have charged and collected for this kind of transaction. 
{¶ 8} Wagner pled guilty to conspiracy to commit wire fraud.  He was 
sentenced to probation for a term of three years and was ordered to pay, jointly 
and severally with other defendants in the case, restitution of $147,620 to the 
lenders who lost money in these transactions, at a minimum rate of not less that 
10 percent of his gross monthly income. 
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{¶ 9} Based on these findings, the board found, and we agree, that 
Wagner violated Prof.Cond.R. 8.4(c) (prohibiting a lawyer from engaging in 
conduct involving dishonesty, fraud, deceit, or misrepresentation) and 8.4(d) 
(prohibiting a lawyer from engaging in conduct that is prejudicial to the 
administration of justice).  The parties had stipulated to these violations.  The 
panel further found that Wagner violated Prof.Cond.R. 8.4(b) (prohibiting a 
lawyer from committing an illegal act that reflects adversely on the lawyer’s 
honesty or trustworthiness).  The board agreed with the panel’s first two findings, 
but dismissed the stipulated violation of Prof.Cond.R. 8.4(d), because the record 
did not support a finding that Wagner had engaged in conduct prejudicial to the 
administration of justice.  We agree with the board. 
Sanction 
{¶ 10} When imposing sanctions for attorney misconduct, we consider 
several relevant factors, including the ethical duties violated, the actual injury 
caused, the existence of any aggravating and mitigating factors listed in BCGD 
Proc.Reg. 10(B), and the sanctions imposed in similar cases.  Stark Cty. Bar Assn. 
v. Buttacavoli, 96 Ohio St.3d 424, 2002-Ohio-4743, 775 N.E.2d 818, ¶ 16; 
Disciplinary Counsel v. Broeren, 115 Ohio St.3d 473, 2007-Ohio-5251, 875 
N.E.2d 935, ¶ 21. 
{¶ 11} The panel found only one aggravating factor, that Wagner 
committed multiple offenses and a pattern of misconduct because he prepared 
settlement statements in at least four different transactions after realizing that the 
transactions were suspect.  BCGD Proc.Reg. 10(B)(1)(d). 
{¶ 12} The panel found six mitigating factors:  Wagner had no prior 
disciplinary record; he did not have a selfish motive and received no 
compensation in the questioned transactions beyond his normal fee as a title 
agent; he cooperated fully with the prosecutors, self-reported his indictment to the 
bar association, and fully cooperated in the disciplinary process; he has an 
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excellent 
reputation 
for 
truthfulness, 
professionalism, 
and 
community 
involvement; he received other penalties or sanctions, namely, the interim 
suspension and a criminal sentence; and he acknowledged wrongdoing by 
conceding that he should have been put on notice that something was wrong with 
the transactions and that he was willfully blind to his suspicions.  See BCGD 
Proc.Reg. 10(B)(2)(a), (b), (d), (e), and (f).  No objections were filed. 
{¶ 13} The parties cited and the board found only three decided cases in 
which the sole issue was misconduct leading to a conviction for bank fraud.  In 
Disciplinary Counsel v. Lash, 68 Ohio St.3d 12, 623 N.E.2d 28 (1993), 
respondent overstated his income by $10,000 on a loan-refinance application in 
order to qualify for an increased loan amount.  He pled guilty to bank fraud and 
was sentenced to perform 100 hours of community service, to serve one year on 
probation, and to pay a $1,000 fine.  Respondent cooperated with federal officials 
during the investigation of his offense, admitted to and took full responsibility for 
his misconduct, and submitted letters and testimony that established that he was a 
highly respected and trusted practitioner.  We suspended respondent for one year, 
with credit for the prior interim felony suspension. 
{¶ 14} In Cuyahoga Cty. Bar Assn. v. Garfield, 109 Ohio St.3d 103, 2006-
Ohio-1935, 846 N.E.2d 45, respondent, the managing director of an investment 
company, pledged a company certificate of deposit as collateral for a $250,000 
personal loan, while leading the bank to believe that he was obtaining the loan on 
behalf of the company.  Respondent pled guilty to bank fraud and was sentenced 
to a term of 30 days at a halfway house, followed by three years of probation with 
a special condition of five months of home detention.  He also was fined $2,000 
and ordered to pay a $100 special assessment.  Aggravating factors were the 
violation of his fiduciary relationship and his dishonest and selfish motive.  
Mitigating factors included the absence of any prior disciplinary record, his 
prompt and full cooperation with federal prosecutors and with relator, his 
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acceptance of responsibility for his actions, many letters about his good character 
and reputation, payment of full restitution before the criminal charge was filed, 
and the imposition of the federal conviction and sentence.  We imposed an 18-
month suspension from the practice of law, with credit for time served pursuant to 
the prior interim felony suspension. 
{¶ 15} Last, and most applicable here, in Disciplinary Counsel v. 
Gittinger, 125 Ohio St.3d 467, 2010-Ohio-1830, 929 N.E.2d 410, respondent was 
a title agent who performed real estate closings through a title agency owned by a 
business in which he was a principal.  He performed closings on behalf of one 
Toby Groves as well as for a business owned by Groves.  Groves, with 
respondent’s assistance, falsified material information on real estate closing 
documents, including HUD-1 settlement statements, on which the financial 
institutions lending the money relied.  In his plea agreement, respondent pled 
guilty to conspiracy to commit bank fraud and money laundering and admitted 
that losses attributable to him exceeded $400,000.  He was sentenced to an 
aggregate 12-month-and-one-day sentence followed by an aggregate five-year 
period of supervised release, a fine of $6,000, and a special assessment of $200. 
{¶ 16} Notwithstanding his plea agreement, respondent denied to the 
board that any loss had resulted from his conduct, and we considered that failure 
to accept responsibility an aggravating factor.  We also found as an aggravating 
factor that respondent’s criminal conduct evidenced a motive to defraud others so 
as to retain a lucrative business client, thus manifesting dishonesty and 
selfishness.  His mitigating factors were similar to those of respondents in Lash 
and Garfield.  To avoid inconsistency with the federal court’s criminal sentence, 
we imposed an indefinite suspension from the practice of law and granted credit 
for the time respondent had served under the interim suspension. 
{¶ 17} Although in Garfield we imposed an 18-month suspension, the 
respondent there made full restitution before the criminal charges were filed and 
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engaged in a single act of fraud.  Here, restitution has not been completed, and the 
fraud occurred on four occasions.  In Lash, we imposed a one-year suspension.  
However, respondent there committed only one isolated instance of misconduct, 
he was not guilty of a pattern of misconduct, and the lending institution suffered 
no harm. 
{¶ 18} Moreover, in many of our recent opinions we have imposed an 
indefinite suspension for misconduct leading to a felony conviction.  See, e.g., 
Columbus Bar Assn. v. Hunter, 130 Ohio St.3d 355, 2011-Ohio-5788, 958 N.E.2d 
567 (indefinitely suspending an attorney following his felony conviction for 
failing to report a cash payment in excess of $10,000 as required by federal law 
and additional misconduct of neglecting client matters and mishandling client 
funds); Disciplinary Counsel v. Smith, 128 Ohio St.3d 390, 2011-Ohio-957, 944 
N.E.2d 1166 (indefinitely suspending an attorney convicted of conspiracy to 
defraud the IRS, making false tax returns, and corruptly endeavoring to obstruct 
and impede an IRS investigation); Cincinnati Bar Assn. v. Kellogg, 126 Ohio 
St.3d 360, 2010-Ohio-3285, 933 N.E.2d 1085 (indefinitely suspending an attorney 
convicted of money laundering, conspiracy to commit money laundering, and 
conspiracy to obstruct proceedings before two federal regulatory agencies); 
Disciplinary Counsel v. Bennett, 124 Ohio St.3d 314, 2010-Ohio-313, 921 N.E.2d 
1064 (indefinitely suspending an attorney for a conviction of illegally structuring 
financial transactions to evade federal currency-reporting requirements). 
{¶ 19} Based on the foregoing, we indefinitely suspend Michael James 
Wagner from the practice of law in Ohio and grant credit for the time he has 
served under the January 24, 2012 interim suspension.  Costs are taxed to 
Wagner. 
Judgment accordingly. 
PFEIFER, LANZINGER, FRENCH, and O’NEILL, JJ., concur. 
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O’CONNOR, C.J., and O’DONNELL and KENNEDY, JJ., concur with the 
sanction but would not give credit for time served under the interim suspension. 
____________________ 
David C. Comstock Jr. and Ronald E. Slipski, Bar Counsel, for relator. 
John B. Juhasz, for respondent. 
________________________