Court Opinion

ID: 4249534
Source: CourtListenerOpinion
Date Created: 2018-02-28 21:19:21.110055+00
Date Added: 2024-06-11T14:43:57.804445
License: Public Domain

IN THE SUPREME COURT OF IOWA
                              No. 12–0632

                         Filed December 7, 2012

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,

      Complainant,

vs.

RONALD LEE WHEELER,

      Respondent.

      On review of the report of the Grievance Commission of the

Supreme Court of Iowa.

      The Grievance Commission of the Supreme Court of Iowa

recommends a suspension of respondent’s license to practice law.

LICENSE SUSPENDED.

      Charles L. Harrington and Nicholas Tré Critelli III, Des Moines, for

complainant.

      David L. Brown of Hansen, McClintock & Riley, Des Moines, for

respondent.
                                           2

CADY, Chief Justice.

       The respondent, Ronald Lee Wheeler, pled guilty to one count of

knowingly making a false statement to a financial institution on a

mortgage application, a federal felony. The Iowa Supreme Court Attorney

Disciplinary Board then filed a complaint against Wheeler, alleging

multiple violations of the Iowa Rules of Professional Conduct. A division

of the Grievance Commission of the Supreme Court of Iowa found

Wheeler violated one of our rules and recommended we suspend his

license with no possibility of reinstatement for six months.                    We are
required to review the commission’s report.              See Iowa Ct. R. 35.10(1)

(2009).1 After considering the commission’s report, we find that Wheeler

violated the ethical rules. We also agree with the recommended sanction

and suspend Wheeler’s license with no possibility of reinstatement for six

months.

       I. Factual Findings and Prior Proceedings.

       Wheeler has been a lawyer for over forty years.                  He began his

career at the Los Angeles County District Attorney’s Office in 1970. He

moved to Iowa in 1978 and worked as a prosecutor in Polk County. In

1986, he went into private practice and worked predominantly as a

criminal defense attorney. In 2006, Wheeler was elected Clarke County

Attorney where he served until 2010.

       Wheeler was active in community service throughout his career.

He served as a scoutmaster for the Boy Scouts, a board member for the

Murray Development Corporation, a volunteer with the Disabled

American Veterans, and an active member of Rotary International, Lions

      1Recent amendments to the Iowa Court Rules are not applicable in this case

because the hearing was held prior to their effective date. See Iowa Ct. R. 35.26 (2012).
                                         3

Club, and the American Legion. He also frequently assisted neighbors.

While at the Polk County Attorney’s Office, Wheeler helped develop an

intrafamily sexual abuse program to treat perpetrators and victims of

crimes involving sexual abuse. This program is still in place today.

       The federal conviction serves as the basis for this disciplinary

action. It stems from Wheeler’s involvement with a client named Russell

Blessman.     Wheeler agreed to help his client purchase a residential

home.    Essentially, Wheeler agreed to serve as a straw man in the

purchase and financing of a home for Blessman in 2006. It is unknown
why Blessman did not want to reveal his identity in purchasing the

home.

       Wheeler executed a loan application in June 2006 and obtained a

thirty-year mortgage for $796,000 from the bank.                  Blessman also

obtained financing for the down payment from the seller for $193,716.

       The sale closed with the property in Wheeler’s name.             Blessman

took possession of the property, paid the utilities, and made the monthly

mortgage payments. After one year, Blessman intended to refinance the

property and transfer it to his name.

       Wheeler claimed he was not paid for his services as a straw man,

but he did receive a $7400 check from Blessman during the time period,

which he claimed was a payment for attorney fees and for consultation

with Blessman associated with Blessman’s treatment program. However,

Wheeler provided no invoice for these services.2

       The   mortgage     application    completed      by   Wheeler    contained

numerous misstatements and omissions.              It listed Wheeler’s monthly

       2Additionally, Blessman gave Wheeler a $2000 contribution to his campaign for

county attorney.
                                     4

income as approximately $30,000, while his actual monthly income was

approximately   $8000.     It     also   represented   that   Wheeler   had

approximately $500,000 in checking and savings accounts, even though

the actual balance of these accounts was approximately $5000.

Additionally, the application declared Wheeler would use the property as

his primary residence, even though he never intended to live in the

house. Finally, the application did not disclose the financing obtained

from the seller.    Wheeler claimed he did not participate in the

preparation of the mortgage application documents or review them before
signing.

      In July, Wheeler acted on instructions from Blessman and

obtained a second mortgage on the property in the amount of $484,000.

As before, Wheeler signed the necessary paperwork prepared by

Blessman. The mortgage application contained the same misstatements

as the June mortgage.

      About one year later, Wheeler met with Blessman under the belief

that the property would be transferred into Blessman’s name. Instead,

Blessman asked Wheeler if he would help him refinance the property

based on an appraisal he obtained showing the property valued at $3

million.   Believing the appraisal to be false, Wheeler refused to

participate in the refinancing.     He asked Blessman to immediately

remove his name from the property.

      About two weeks later, Blessman disappeared.        He also stopped

making payments on the loans. Thereafter, Wheeler spent $26,000 to

improve and clean the property in an attempt to sell it but was

unsuccessful.   At this time, the real estate market crashed.     Wheeler,
unable to make the mortgage payments, ultimately filed for bankruptcy
                                    5

protection. The Federal Bureau of Investigation subsequently launched

an investigation into the loans.

      After Wheeler pled guilty to making a false statement to a financial

institution, the United States District Court for the Southern District of

Iowa sentenced Wheeler to time served, placed him on supervised release

for five years, ordered him to perform 200 hours of community service,

and required him to pay $821,134 in restitution.         In doing so, the

sentencing court departed from federal sentencing guidelines. The court

found that Wheeler was “a minor player in this scheme,” recognized his
long career, and noted there was no need to protect the public from

further harm or increase the sentence to deter future conduct.

      Wheeler established a payment plan with the United States

government to pay his restitution. His only source of income is his social

security. The government takes fifteen percent of each check in payment

of the restitution.   The government also prosecuted the banker and

Blessman. The Board presented no evidence of their restitution orders or

the amount of restitution either has made to the government.

      Following Wheeler’s conviction, the Board filed a complaint alleging

Wheeler violated multiple provisions of Iowa Rule of Professional Conduct

32:8.4.   The commission found Wheeler violated rule 32:8.4(b), which

prohibits a lawyer from committing “a criminal act that reflects adversely

on the lawyer’s honesty, trustworthiness, or fitness as a lawyer.”       See

Iowa R. Prof’l Conduct 32:8.4(b). It recommended that the court suspend

Wheeler’s license with no possibility of reinstatement for six months.

      II. Scope of Review.

      We review lawyer disciplinary proceedings de novo. Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Casey, 761 N.W.2d 53, 55 (Iowa 2009). The

Board must prove disciplinary violations by a convincing preponderance
                                      6

of the evidence. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Conrad, 723
N.W.2d 791, 792 (Iowa 2006).        This imposes a greater burden than a

preponderance-of-the-evidence standard, but lesser than proof beyond a

reasonable doubt.       Id.    We respectfully consider the commission’s

findings and recommendations, but they do not bind us. Iowa Supreme

Ct. Att’y Disciplinary Bd. v. Isaacson, 750 N.W.2d 104, 106 (Iowa 2008).

Upon proof of misconduct, we may impose a greater or lesser sanction

than that recommended by the commission. Casey, 761 N.W.2d at 55.

      III. Ethical Violations.
      In its complaint, the Board invoked issue preclusion pursuant to

Iowa Court Rule 35.7(3).        When invoked by a party, the rule bars

relitigating of an issue if:

             a. The issue has been resolved in a civil proceeding
      that resulted in a final judgment, or in a criminal proceeding
      that resulted in a finding of guilt, even if the Iowa Supreme
      Court Attorney Disciplinary Board was not a party to the
      prior proceeding.
            b. The burden of proof in the prior proceeding was
      greater than a mere preponderance of the evidence.
            c. The party seeking preclusive effect has given written
      notice to the opposing party, not less than ten days prior to
      the hearing, of the party’s intention to invoke issue
      preclusion.

Iowa Ct. R. 35.7(3).     Wheeler pled guilty to knowingly making a false

statement to a financial institution on a mortgage application, a class “B”

felony. See 18 U.S.C. §§ 1014, 3559 (2006). Further, the Board gave

written notice to Wheeler in its complaint that it would invoke issue

preclusion under rule 35.7(3).       Rule 35.7(3) prohibits Wheeler from

relitigating the issue of his criminal conduct.      Iowa Ct. R. 35.7(3).

Accordingly, we find Wheeler knowingly misrepresented his financial
status to the bank.       Although Wheeler claims not to have read the
                                    7

mortgage applications, this claim is contrary to his guilty plea wherein he

admits that he “knowingly” made a false statement or report.       See 18

U.S.C. § 1014.

      Rule 32:8.4(b) states, “It is professional misconduct for a lawyer to

commit a criminal act that reflects adversely on the lawyer’s honesty,

trustworthiness, or fitness as a lawyer in other respects.” Iowa R. Prof’l

Conduct 32:8.4(b). A lawyer’s fitness to practice law includes “his or her

moral character, suitability to act as an officer of the court, ability to

maintain a professional relationship, competency in legal matters, and
whether he or she can be trusted to vigorously represent clients, without

overreaching.”   Iowa Supreme Ct. Att’y Disciplinary Bd. v. Keele, 795
N.W.2d 507, 512 (Iowa 2011); see also 2 Geoffrey C. Hazard, Jr., et al.,

The Law of Lawyering § 65.4, at 65–8 to 65–10 (3d ed. 2009 Supp.). One

type of conduct that reflects adversely on a lawyer’s fitness to practice

law is conduct that diminishes “public confidence in the legal

profession.” Keele, 796 N.W.2d at 512 (citation and internal quotation

marks omitted); see also Iowa Supreme Ct. Att’y Disciplinary Bd. v. Barry,

762 N.W.2d 129, 138 (Iowa 2009).

      The commission of a crime by a lawyer does not alone establish the

lawyer is not fit to practice law. Iowa Supreme Ct. Att’y Disciplinary Bd.

v. Templeton, 784 N.W.2d 761, 767 (Iowa 2010); see also Iowa R. Prof’l

Conduct 32:8.4(b) cmt. 2 (“[I]llegal conduct can reflect adversely on [the]

fitness to practice law.” (Emphasis added.)). Instead, “ ‘[t]here must be

some rational connection other than the criminality of the act between

the conduct and the actor’s fitness to practice law.’ ”    Templeton, 784

N.W.2d at 767 (quoting In re Conduct of White, 815 P.2d 1257, 1265 (Or.
1991)).    In determining whether such a connection exists, we may

consider
                                       8
         “the lawyer’s mental state; the extent to which the act
         demonstrates disrespect for the law or law enforcement; the
         presence or absence of a victim; the extent of actual or
         potential injury to a victim; and the presence or absence of a
         pattern of criminal conduct.”

Id. (quoting White, 815 P.2d at 1265).

         Here, the criminal act is connected to fitness to practice law. The

actions by Wheeler were dishonest, and they victimized the bank in a

substantial manner.         We find Wheeler violated rule 32:8.4(b) by

knowingly making a false statement on a mortgage application for the

benefit of a client, which adversely reflected on his fitness as a lawyer.

         The Board also contends Wheeler violated rule 32:8.4(c) by

engaging      “in   conduct   involving    dishonesty,   fraud,   deceit,    or

misrepresentation.”      See Iowa R. Prof’l Conduct 32:8.4(c).     To find a

lawyer violated this rule, we must conclude that the lawyer acted with

some level of scienter. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Netti,

797 N.W.2d 591, 605 (Iowa 2011).           Because Wheeler pled guilty to

knowingly making a false statement to a financial institution, we find he

engaged in conduct involving misrepresentation in violation of rule

32:8.4(c).

         We next consider whether Wheeler’s conviction constitutes a

violation of rule 32:8.4(d), which prohibits conduct prejudicial to the
administration of justice. See Iowa R. Prof’l Conduct 32:8.4(d). As with

rule 32:8.4(b), “the mere act of committing a crime does not constitute a

violation of this rule because the rule does not simply prohibit the doing

of an act.” Templeton, 784 N.W.2d at 768. An act is prejudicial to the

administration of justice if the act impedes “the efficient and proper

operation of the courts or of ancillary systems upon which the courts
rely.”     Id. (citation and internal quotation marks omitted).           Here,

Wheeler’s act of knowingly making a misrepresentation on a mortgage
                                     9

application did not involve judicial proceedings. Accordingly, the Board

failed to prove Wheeler’s conduct violated rule 32:8.4(d).

      IV. Sanction.

      The commission recommended we suspend Wheeler’s license for

six months.   Although issue preclusion bars Wheeler from relitigating

whether he knowingly made a false statement to a financial institution,

he may “ ‘present evidence of mitigating facts and circumstances’ ” with

regard to any sanction.      Iowa Supreme Ct. Att’y Disciplinary Bd. v.

Iversen, 723 N.W.2d 806, 810 (Iowa 2006) (quoting Iowa Supreme Ct. Bd.
of Prof’l Ethics & Conduct v. D.J.I., 545 N.W.2d 866, 877 (Iowa 1996)).

      Although we do not have standard sanctions for particular types of

misconduct, we “try to achieve consistency with our prior cases.”

Templeton, 784 N.W.2d at 769. Yet, this consistency is achieved through

the difficult process of carefully considering and balancing all the

relevant circumstances in each case, not by lumping conduct into broad

categories of sanctions. When determining the appropriate sanction for

each violation of our rules, we are obligated to

      consider the nature of the violations, the attorney’s fitness to
      continue in the practice of law, the protection of society from
      those unfit to practice law, the need to uphold public
      confidence in the justice system, deterrence, maintenance of
      the reputation of the bar as a whole, and any aggravating or
      mitigating circumstances.

Iowa Supreme Ct. Att’y Disciplinary Bd. v. Ireland, 748 N.W.2d 498, 502

(Iowa 2008). Under this approach, consistency comes by establishing a

subset of cases over time that share these considerations. The categories

are consequently many in number and are often shaded at the edges.

      One subset within the broader category of conduct involving
misappropriation of funds pertains to the conduct of a lawyer in helping
                                    10

a client with the misappropriation.      Yet, even within the subset, more

narrow categories exist.

      We normally impose a substantial suspension when a lawyer

commits fraud for the benefit of a client. See Iowa Supreme Ct. Bd. of

Prof’l Ethics & Conduct v. Gallner, 621 N.W.2d 183, 187 (Iowa 2001)

(imposing a six-month suspension when an attorney filed false reports to

the Social Security Administration to enable his clients to receive

increased social security disability benefits); Iowa Supreme Ct. Bd. of

Prof’l Ethics & Conduct v. Romeo, 554 N.W.2d 552, 553–54 (Iowa 1996)
(suspending for    three years an attorney who pled guilty to a

misdemeanor after assisting a client under criminal suspicion by making

false receipts “to get the heat off of his client” and cover up his client’s

role as a “fence”); Comm. on Prof’l Ethics & Conduct v. Bauerle, 460
N.W.2d 452, 454 (Iowa 1990) (imposing a six-month suspension on an

attorney who backdated various documents and performed a false

notarization to enable a client to obtain financial gain). Yet, we have also

revoked a lawyer’s license to practice law for fraud resulting in the

misappropriation of funds. See, e.g., Iowa Supreme Ct. Att’y Disciplinary

Bd. v. Nelsen, 807 N.W.2d 259, 267 (Iowa 2011) (revoking a lawyer’s

license when the lawyer converted funds belonging to a bank for his

clients’ benefit and misled the bank through fraud, even though the state

did not charge the lawyer with a crime and he did not receive any

personal benefit from the funds); Iowa Supreme Ct. Att’y Disciplinary Bd.

v. Polsley, 796 N.W.2d 881, 886 (Iowa 2011) (revoking the licenses of two

attorneys who pled guilty to converting social security benefit payments);

Iowa Supreme Ct. Att’y Disciplinary Bd. v. Carroll, 721 N.W.2d 788, 792
(Iowa 2006) (revoking the license of an attorney who misappropriated

funds from a nonprofit organization); Iowa Supreme Ct. Bd. of Prof’l
                                   11

Ethics & Conduct v. Lyzenga, 619 N.W.2d 327, 328, 333 (Iowa 2000)

(revoking the license of an attorney who had fourteen convictions for

theft, prostitution, trespass, forgery, and deceptive practices).    See

generally Iowa Supreme Ct. Att’y Disciplinary Bd. v. Bieber, 824 N.W.2d
514 (Iowa 2012) (discussing cases).
      In this case, Wheeler intended to misrepresent the bank by filing

false financial documents. Yet, his intent was to obtain a loan from the

bank, not for the bank to suffer a loss. The misrepresentation was for

the purpose of obtaining the loan, which Wheeler was contractually
obligated to repay. He believed his client would eventually refinance the

house and pay off the loan to the bank. He also believed the bank was

protected from loss by the mortgage on the home. In this respect, his

conduct resembles that of another attorney whose case we are also

deciding today. See Bieber, 824 N.W.2d at 520. In Bieber, the attorney

prepared false documents that induced a lender to make a loan in a

greater amount than it otherwise would have made. Id. at 516–17. But,

the attorney understood the additional loan proceeds were going to be

used on the property and the bank would be secured.          Id. at 529.

Neither attorney anticipated the bank would lose funds, which in fact is

what occurred in both cases.    Further, when Wheeler discovered that

Blessman was not going to refinance the loan, but rather try to get a

larger loan, Wheeler said no, and Blessman disappeared. Wheeler’s only

criminal conduct was giving false information to the bank.

      Of course, the conduct of Wheeler is distinguished from those

cases involving misappropriation that resulted in revocation.        The

attorney in Nelsen, whose license was revoked, converted funds
belonging to the bank by making misrepresentations to the bank to

facilitate the conversion of funds. 807 N.W.2d at 266–68. Similarly, the
                                      12

attorney in Polsley, whose license was revoked, knowingly converted

social security funds.     796 N.W.2d at 883–84.             In both cases, the

attorney intended for the misappropriation of funds to occur.

      Additionally, numerous mitigating factors exist to reduce the

severity of the sanctions in this case. First, Wheeler has no prior record

of discipline. See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Lustgraaf,

792 N.W.2d 295, 301–02 (Iowa 2010) (recognizing the absence of prior

discipline as a mitigating factor).         Second, Wheeler has actively

participated in community service throughout his career.              See Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Boles, 808 N.W.2d 431, 442 (Iowa

2012) (recognizing volunteer community service as a mitigating factor).

Third, Wheeler is remorseful of his actions and admitted it was his

responsibility to verify the accuracy of the information on the mortgage

application. See Schmidt, 796 N.W.2d at 44 (considering remorsefulness

and taking responsibility for one’s actions as mitigating factors). Fourth,

Wheeler is well respected in the legal community. Iversen, 723 N.W.2d at

811 (noting respect in the community is a mitigating factor). Fifth, the

incident appears to be an aberration.            See Iowa Supreme Ct. Att’y

Disciplinary Bd. v. Piazza, 756 N.W.2d 690, 700 (Iowa 2008) (noting a

public reprimand was appropriate for an isolated incident involving client

trust account violations). Finally, Wheeler cooperated with the Board in

resolving this matter, just as he did in the federal investigation.           See

Iowa Supreme Ct. Att’y Disciplinary Bd. v. Knopf, 793 N.W.2d 525, 531

(Iowa 2011) (considering the respondent’s cooperation with the Board as

a factor in favor of a less severe sanction).

      Wheeler’s act of knowingly making a false statement to a financial
institution is inexcusable and cannot be undone. But, we do not believe

Wheeler   intended    to   misappropriate       funds   or   aid   Blessman    in
                                   13

misappropriating funds.     In this respect, this case involves similar

underlying conduct to the Bieber case and many of the same mitigating

factors. Upon our review, we agree with the commission’s recommended

sanction of a six-month suspension here. That is the same sanction we

impose in Bieber. See Bieber, 824 N.W.2d at 528.

      V. Disposition.

      We suspend Wheeler’s license to practice law in this state

indefinitely with no possibility of reinstatement for a period of not less

than six months.    This suspension shall apply to all facets of law as
provided in Iowa Court Rule 35.12(3) (2009). Prior to any reinstatement,

Wheeler must establish that he has not practiced law during the

suspension period, that he has conformed to the rules and procedures

governing reinstatement contained in rule 35.13, and that he has

complied with the notification requirements of rule 35.22. We tax the

costs of this proceeding to Wheeler pursuant to rule 35.26(1).

      LICENSE SUSPENDED.

      All justices concur except Wiggins, J., who dissents.
                                   14

             #12–0632, Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wheeler

WIGGINS, Justice (dissenting).

      I dissent for the reasons stated in my dissent in Iowa Supreme

Court Disciplinary Board v. Bieber, 824 N.W.2d 514, 530–34 (Iowa 2012)

(Wiggins, J., dissenting).