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.
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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
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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
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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
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“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
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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
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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
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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.
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#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).