IN THE SUPREME COURT OF IOWA
No. 12–1203
Filed December 7, 2012
IOWA SUPREME COURT
ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
PAUL J. BIEBER,
Respondent.
On review of the report of the Grievance Commission of the
Supreme Court of Iowa.
Grievance commission recommends suspension of attorney’s law
license for ethical violations. LICENSE SUSPENDED.
Charles L. Harrington and Wendell J. Harms, Des Moines, for
complainant.
Mark S. Pennington of Kutmus, Pennington & Hook, P.C., West
Des Moines, for respondent.
2
MANSFIELD, Justice.
An Iowa attorney helped facilitate a fraudulent real estate
transaction in which the sales price was overstated by $55,000. The
attorney subsequently pled guilty to misprision of a felony, see 18 U.S.C.
§ 4 (2006), and received probation. We are now asked to decide what
ethical rules he violated and what the consequences should be.
This case comes before us on the report of a division of the
Grievance Commission of the Supreme Court of Iowa (commission). See
Iowa Ct. R. 35.10(1) (2009). 1 The Iowa Supreme Court Attorney
Disciplinary Board (Board) alleged the respondent, Paul J. Bieber,
violated several rules of professional conduct. The commission agreed
and accordingly found that Bieber violated Iowa Rules of Professional
Conduct 32:1.2(d), 32.1.16(a)(1), 32:4.1(a), 32:4.1(b), and 32:8.4(b).
Additionally, the commission found that Bieber’s felony conviction met
the requirements for revocation or suspension under Iowa Code section
602.10122 (2011).
The commission recommended an indefinite suspension from the
practice of law with no possibility of reinstatement for six months. Upon
our consideration of the commission’s findings of fact, conclusions of
law, and recommendations, and our de novo review of the record, we
agree Bieber has committed all the violations found by the commission.
We also agree with the recommended sanction and order Bieber’s license
suspended indefinitely with no possibility of reinstatement for six
months.
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
I. Factual and Procedural Background.
Bieber was admitted to practice law in Iowa in 1980. At all
relevant times in this proceeding, he has resided and maintained his law
office in Scott County. Bieber’s law practice includes divorce, personal
injury, probate, and some real estate work. Bieber has no history of
disciplinary violations. Bieber has a distinguished record of community
involvement including service with the Davenport Historic Preservation
Commission, the Salvation Army, Neighborhood Housing Services, and
“In From the Cold,” an organization that assists the homeless. Bieber
also has been president of an inn of court and president of the board of a
Catholic school.
On June 30, 2011, Bieber appeared in the United States District
Court for the Southern District of Iowa and, under a plea agreement,
pled guilty to misprision of a felony. 2 As agreed upon by Bieber and the
federal government, Bieber was sentenced to three years of probation,
which was within the federal sentencing guidelines. Bieber also was
ordered to pay restitution to the lender in the amount of $37,969.99.
The facts of this transaction are set forth in the plea agreement:
Mary Pat Lord, a real estate agent, had a listing for the sale
of 1818 Esplanade Avenue, Davenport, Iowa, then owned by
Denisa Woods. Lord arranged to sell the property to Darryl
Hanneken and Robert Herdrich for the price of $100,000.
Lord and the parties agreed that the HUD-1 Settlement
Statement and other documents pertaining to the sale would
reflect a price of $155,000, thereby allowing Hanneken and
2The elements of Misprision of Felony are 1) the principal committed and
completed the alleged felony; 2) defendant had full knowledge of that
fact; 3) defendant failed to notify the authorities; and 4) defendant took
steps to conceal the crime.
United States v. Cefalu, 85 F.3d 964, 969 (2d Cir. 1996). Bieber had previously gone to
trial on a number of federal charges. The case ended in a mistrial because the jury
could not reach verdicts on those charges.
4
Herdrich to obtain a mortgage loan for $108,500, greater
than the actual sale price. Further, Lord and the parties
agreed that after proceeds of the sale had been paid to
Woods, she would convey a $55,000 “cash back” payment
(the difference between the actual price and inflated sale
price) to Hanneken and Herdrich. The actual price and the
existence of the cash back payment to Hanneken and
Herdrich would be concealed from the mortgage lender,
Interbay Funding, by omitting those details from the HUD-1
Settlement Statement.
Woods lived outside the Davenport area, so [Bieber], an
attorney, was retained to act for Woods in connection with
the sale and closing pursuant to a power of attorney.
[Bieber] was aware of the lower actual price and the cash
back payment, and the fact that those details would not be
conveyed to the lender on the HUD-1 Settlement Statement.
[Bieber] did an affirmative act to conceal the offense, in that
[Bieber] provided via the closing process information that
falsely represented that the higher inflated price was the
agreed price and failed to reveal the lower actual price and
cash back payment. [Bieber] knew this information would
be included on the HUD-1 Settlement Statement. [Bieber]
also completed a declaration of value form that falsely
represented the sale price.
On or about December 9, 2005, [Bieber] represented Woods
at the closing for the sale of 1818 Esplanade and took
custody of the proceeds of the sale on behalf of Woods.
Thereafter, [Bieber] conveyed the $55,000 cash back
payment to Hanneken.
....
In connection with this transaction, [Bieber] did not collect
any fees or payments except for his $400 fee for representing
Woods, which was duly reflected on the HUD-1 form.
[Bieber] acted in the interests of Woods in that he carried out
her instructions to conduct the transaction.
On May 18, 2011, the Board filed an amended complaint alleging
Bieber violated Iowa Rules of Professional Conduct 32:1.2(d),
32:1.16(a)(1), 32:4.1(a), 32:4.1(b), and 32:8.4(b). The Board also alleged
that Bieber’s felony conviction met the requirements for revocation or
suspension under Iowa Code section 602.10122.
5
Bieber filed an amended answer admitting most of the allegations
in the amended complaint. However, he specifically denied knowing that
preparing the HUD-1 document with the inflated sale price amounted to
criminal conduct. Additionally, while admitting that he knew the inflated
sale price was false, Bieber denied that he had any knowledge the false
statement was “material” to the lender.
A one-day hearing before the commission took place on June 6,
2012. Bieber conceded all of the violations charged by the Board except
the alleged violations of rule 32:4.1 subparts (a) and (b). 3 He also
acknowledged that his guilty plea had preclusive effect as to the elements
of the crime he had admitted to. See Emp’rs Mut. Cas. Co. v.
Van Haaften, 815 N.W.2d 17, 23 (Iowa 2012) (noting the well-established
rule that a guilty plea in an Iowa state court “ ‘precludes a criminal
defendant from relitigating essential elements of the criminal offense in a
later civil case arising out of the same transaction or incident’ ” (quoting
Dettmann v. Kruckenberg, 613 N.W.2d 238, 244 (Iowa 2000))).
However, Bieber asserted that both he and his client Woods
believed the $55,000 rebate would actually go toward needed repairs and
improvements to the property. By their account, which no one disputed,
Bieber and Woods were unaware the buyers intended simply to pocket
the difference between the $108,500 they had borrowed and the
$100,000 net they had transferred to Woods. Bieber also testified that
he had repaid the $37,969.99 restitution ordered by the federal court. 4
3Rule 32:4.1 prohibits “mak[ing] a false statement of material fact or law to a
third person” or “fail[ing] to disclose a material fact to a third person when disclosure is
necessary to avoid assisting a criminal or fraudulent act by a client.” See Iowa R. of
Prof’l Conduct 32:4.1(a)–(b). As noted above, Bieber denied the inflated sales price was
material given the real estate lending environment as it existed in 2005.
4We presume that this amount is what the lender ultimately lost after
foreclosing on the property. Other participants in the transaction who were criminally
6
The Board proposed a six-month suspension of Bieber’s law
license; Bieber conceded a suspension was appropriate but argued for
sixty days. After thoroughly discussing the relevant facts and law, the
commission recommended that Bieber’s license be suspended indefinitely
with no possibility of reinstatement for six months.
II. Scope of Review.
Our review of attorney disciplinary proceedings is de novo. Iowa
Ct. R. 35.10(1); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Fields, 790
N.W.2d 791, 793 (Iowa 2010). We give respectful consideration to the
commission’s findings and recommendations but are not bound by them.
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Lickiss, 786 N.W.2d 860, 864
(Iowa 2010). The burden is on the Board to prove attorney misconduct
by a convincing preponderance of the evidence. Id. “This burden is less
than proof beyond a reasonable doubt, but more than the preponderance
standard required in the usual civil case.” Iowa Supreme Ct. Bd. of Prof’l
Ethics & Conduct v. Lett, 674 N.W.2d 139, 142 (Iowa 2004). It is also a
less stringent burden than clear and convincing evidence which is “the
highest civil law standard of proof.” Iowa Supreme Ct. Bd. of Prof’l Ethics
& Conduct v. Ronwin, 557 N.W.2d 515, 517 (Iowa 1996). If a violation is
established, we “may impose a lesser or greater sanction than
recommended by the commission.” Iowa Supreme Ct. Att’y Disciplinary
Bd. v. Murphy, 800 N.W.2d 37, 42 (Iowa 2011); see also Iowa Ct. R.
35.10(1).
_______________
convicted were also ordered to make the same restitution, but it was paid entirely by
Bieber.
7
III. Review of Alleged Ethical Violations.
The Board alleged, and the commission found, that Bieber violated
five separate provisions of the Iowa Rules of Professional Conduct. Upon
our review, we agree with those findings.
A. Rule 32:1.2(d). Rule 32:1.2(d) forbids a lawyer from
“counsel[ing] a client to engage, or assist[ing] a client, in conduct that the
lawyer knows is criminal or fraudulent.” Iowa R. Prof’l Conduct
32:1.2(d). Comment 9 to rule 32:1.2 explains that “[p]aragraph (d)
prohibits a lawyer from knowingly counseling or assisting a client to
commit a crime or fraud.” Id. r. 32:1.2(d) cmt. 9. Comment 10 explains
that a lawyer in a situation such as Bieber’s “is required to avoid
assisting the client . . . by drafting or delivering documents that the
lawyer knows are fraudulent.” Id. r. 32:1.2(d) cmt. 10.
Rule 32:1.2(d) took effect on July 1, 2005, and since that time we
have not applied it in any disciplinary opinions. However, the language
of rule 32:1.2(d) is substantially similar to our prior disciplinary rule DR
7–102(A)(7), which stated in part, “In the representation of a client, a
lawyer shall not . . . [c]ounsel or assist a client in conduct that the lawyer
knows to be illegal or fraudulent.” We find cases interpreting prior
disciplinary rule DR 7–102(A)(7) to be instructive in this matter. See
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Gailey, 790 N.W.2d 801, 806
(Iowa 2010) (relying on cases applying prior disciplinary rule DR 7–
104(A)(1) in interpreting its successor, rule 32:4.2(a)).
For example, in Iowa Supreme Court Attorney Disciplinary Board v.
Nelsen, the respondent represented a failed business that owed $3.6
million to a bank. 807 N.W.2d 259, 261 (Iowa 2011). Nelsen
misrepresented to the bank that he would deposit the business’s
accounts receivable checks into his trust account. Id. at 266. Instead,
8
Nelsen contravened a court order by sending most of these checks to his
clients out of state. Id. Ultimately, Nelsen assisted his clients in
diverting at least $141,335.34 in accounts receivable from the control of
the court-appointed receiver. Id. at 265. Nelsen did not receive any
personal benefit from the funds and was not charged with any crimes.
Id. at 267. We nonetheless found that his conduct violated DR 7–
102(A)(7) and amounted to “knowingly assist[ing] his clients in
defrauding the bank.” Id. at 266.
Bieber does not contest that he violated rule 32:1.2(d). Bieber
knew the actual sales price was only $100,000 but was being reported as
$155,000. He also knew that the buyers were receiving a $108,500 loan
based on the overstated price. He assisted his client in concealing the
actual sales price from the lender by processing a HUD-1 Settlement
Statement, preparing and executing an Iowa Declaration of Value form,
and faxing closing figures to the title company in Illinois, all of which
reflected the inflated sales price. At the closing, Bieber took possession
of the sale proceeds and issued the $55,000 refund to the buyers from
his trust account. Under these facts, we find that Bieber knowingly
assisted his client in defrauding the buyer’s lender, Interbay Funding.
Thus, Bieber violated Rule 32:1.2(d). See Iowa Supreme Ct. Bd. of Prof’l
Ethics & Conduct v. Romeo, 554 N.W.2d 552, 553–55 (Iowa 1996)
(suspending an attorney for three years who assisted a client under
criminal investigation by making false receipts “to get the heat off of his
client,” and cover up his client’s role as a “fence”).
B. Rule 32:4.1. Rule 32:4.1(a) states “a lawyer shall not
knowingly . . . make a false statement of material fact or law to a third
person.” Iowa R. Prof’l Conduct 32:4.1(a). Rule 32:4.1(b) provides, “In
the course of representing a client, a lawyer shall not knowingly . . . fail
9
to disclose a material fact to a third person when disclosure is necessary
to avoid assisting a criminal or fraudulent act by a client, unless
disclosure is prohibited by rule 32:1.6.” Id. r. 32:4.1(b). The commission
found that Bieber violated both subparts (a) and (b) of rule 32:4.1.
Bieber disputes that his conduct violated these rules. At the
hearing, Bieber admitted he knew the sale price was inflated, but denied
that he had any knowledge the false statement was “material” to the
lender, Interbay Funding. Bieber contended that because Interbay
Funding was making “liar loans” that did not require income verification,
the actual sales price was not material to it.
We are not persuaded. The issue here is not whether the buyers
had provided verification of income, but whether the actual sales price of
the property mattered. Those are two different things. 5 Because of the
fraud, Interbay Funding wound up lending the buyers $108,500, which
was $8500 more than they were really paying for the property. Logic
dictates that the overstatement was material; otherwise, the parties
would not have engaged in their elaborate charade but would have
simply told the bank this was a $100,000 transaction. In the absence of
some specific evidence that the actual sales price would not have
mattered to this lender, we find the inference of materiality to be
established here.
Bieber knowingly processed sales paperwork with an inflated
purchase price, faxed the inflated closing figures on his client’s
transaction to the title company in Illinois, and completed a declaration
of value form that falsely represented the sale price. Bieber’s
5It is entirely possible that the lender did not care much about the borrowers’
ability to repay the loan from their personal assets, but would have wanted to be able to
recoup the loan amount by foreclosing on the property if necessary.
10
misrepresentation of the sales price in the transaction constituted a false
statement of material fact. See Iowa Supreme Ct. Bd. of Prof’l Ethics &
Conduct v. Gallner, 621 N.W.2d 183, 187 (Iowa 2001) (finding that an
attorney who enabled clients to receive increased social security
disability benefits by exaggerating attorney’s fees in reports to Social
Security Administration knowingly made false statements of fact). At no
point did he make any attempt to disclose the misrepresentations
contained in the sales paperwork. We agree with the commission that
this conduct violated both subsections of rule 32:4.1.
C. Rule 32:8.4(b). Rule 32:8.4(b) makes it “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).
[I]n order for a criminal act to constitute a violation of rule
32:8.4(b),
“ ‘[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. Pertinent considerations include 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.’ ”
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Weaver, 812 N.W.2d 4, 11
(Iowa 2012) (quoting Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Templeton, 784 N.W.2d 761, 767 (Iowa 2010)).
Bieber acknowledged violating this rule, and the commission so
found. We have no difficulty reaching the same conclusion. See Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Schall, 814 N.W.2d 210, 212–13
(Iowa 2012) (finding an attorney who pled guilty to three aggravated
misdemeanor counts of fraudulent practice in the third degree for failure
11
to timely file tax returns had violated rule 32:8.4(b)). In this case, there
was more than a “rational connection” between Bieber’s conduct and his
fitness to practice law. See Templeton, 784 N.W.2d at 767. The criminal
behavior actually involved actions undertaken by Bieber in his capacity
as Woods’s attorney.
As part of the factual basis for the guilty plea, Bieber admitted that
he
did an affirmative act to conceal the offense, in that [he]
provided via the closing process information that falsely
represented that the higher inflated price was the agreed
price and failed to reveal the lower actual price and cash
back payment . . . . [Bieber] also completed a declaration of
value form that falsely represented the sale price.
This admission demonstrates that Bieber had a culpable mental state.
See Templeton, 784 N.W.2d at 767. Interbay Funding was victimized and
substantially harmed by Bieber’s misconduct. See id. This is evidenced
by the plea agreement ordering him to make restitution in the amount of
$37,969.99 to Bayview Loan Servicing, the successor company to
Interbay.
Again, the conduct that provided the factual basis for Bieber’s
guilty plea related directly to his representation of Woods in the real
estate transaction. Bieber’s knowing preparation, processing, and
transmission of real estate sale documents containing an affirmative
material misrepresentation bear directly on his honesty, trustworthiness,
and fitness as a lawyer. Thus, we find Bieber’s felony conviction
constitutes misconduct under rule 32:8.4(b).
D. Rule 32:1.16(a)(1). Rule 32:1.16(a)(1) states, “[A] lawyer shall
not represent a client or, where representation has commenced, shall
withdraw from the representation of a client if . . . the representation will
result in violation of the Iowa Rules of Professional Conduct or other
12
law.” Iowa R. Prof’l Conduct 32:1.16(a)(1). Bieber conceded that his
conduct violated rule 32:1.16(a)(1), and we agree.
As discussed above, Bieber knew that his representation of Woods
in her real estate transaction would result in the perpetration of a fraud
on a lender. Thus, he knew that such representation would cause him to
violate rules 32:1.2(d) and 32:4.1(a)–(b). Nonetheless, Bieber continued
to represent Woods and made no attempt to withdraw. Accordingly, we
find Bieber violated rule 32:1.16(a)(1). See Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Dunahoo, 799 N.W.2d 524, 531 (Iowa 2011) (finding
an attorney in violation where he failed to “limit his scope of
representation to matters in which he could ethically represent” his
client).
As Bieber acknowledged at the hearing (with commendable
candor):
Q. . . . Could these two gentlemen, I refer to loosely,
Herdrich and Hanneken, have done this without attorneys
like you at the time not doing your job? A. No, they couldn’t
have. I mean, it’s one of those things that, you know, as we
were going through the trial, that occurred to me, that their
successful completion of their plan required the participation
of somebody such as myself.
Q. Are you proud of that? A. No, I should have
known better than that. I mean, that’s the thing about it is,
you know, I had the responsibility that I should have figured
out what was going on and I didn’t.
Q. Does that bother you? A. Yeah, it does. I mean,
like I said, it’s one of those things that, as we were going
through it, it was definitely clear to me that, you know, there
were multiple players that were required to make their plan
work. And, you know, I was one of those players. And if it—
I mean, if somebody hadn’t done the part of it that I did, they
wouldn’t have been able to pull it off.
13
IV. Consideration of Appropriate Sanction.
We now consider the appropriate sanction for Bieber’s violation of
our disciplinary rules. “We craft appropriate sanctions based upon each
case’s unique circumstances, although prior cases are instructive.” Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Kallsen, 814 N.W.2d 233, 239 (Iowa
2012).
We have repeatedly held that the goal of our ethical rules is
to maintain public confidence in the legal profession as well
as to provide a policing mechanism for poor lawyering.
Important considerations include the nature of the
violations, protection of the public, deterrence of similar
misconduct by others, the lawyer’s fitness to practice, and
our duty to uphold the integrity of the profession in the eyes
of the public. In fashioning the appropriate sanction, we
look to prior similar cases while remaining cognizant of their
limited usefulness due to the variations in their facts. Often,
the distinction between the punishment imposed depends
upon the existence of multiple instances of neglect, past
disciplinary problems, and other companion violations,
including uncooperativeness in the disciplinary
investigation. Aggravating and mitigating circumstances are
also important.
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Humphrey, 812 N.W.2d 659,
666 (Iowa 2012) (citations and internal quotation marks omitted).
“A felony conviction is grounds for revocation or suspension of an
attorney’s license to practice law.” See Weaver, 812 N.W.2d at 13 (citing
Iowa Code § 602.10122(1)). “The record of conviction is conclusive
evidence.” Iowa Code § 602.10122(1). 6
6Iowa Code section 602.10122 states in relevant part:
The following are sufficient causes for revocation or suspension:
1. When the attorney has been convicted of a felony. The record
of conviction is conclusive evidence. . . .
14
The commission recommended a six-month suspension, noting we
have “consistently imposed harsh sanctions for lawyer’s commission of
criminal conduct involving fraud and dishonesty.” The commission
found Bieber’s lack of a prior disciplinary record, status as a respected
lawyer, and cooperation with the Board in the proceedings to be
mitigating factors. The commission also noted that Bieber did not seek
or receive additional profit from the transaction, did not devise or
manage the fraudulent scheme, promptly reported his conviction to the
Board, and appeared sincerely remorseful. As aggravating factors, the
commission considered that Bieber “represented other sellers in similar
transactions” and, during the hearing, Bieber “suggested that he
honestly believed there was nothing wrong with using an inflated price
on closing documents to allow a buyer to get money back to make
repairs.” 7 Bieber also presented evidence at the hearing that he has
recently been treated for kidney cancer.
All of the violations in this case stem from Bieber’s representation
of Woods in the 2005 real estate transaction and his subsequent felony
conviction for misprision of a felony in federal court. Bieber’s
misconduct involves an element of deceit. We have repeatedly held that:
7We question to some extent the Board’s reliance on these aggravating factors.
Bieber’s attorney acknowledged that Bieber had been involved in four or five
transactions where money went back to Hanneken and Herdrich. However, only one
transaction was charged by the Board, and evidence was presented only as to that
transaction. Also, it is true that Bieber’s attorney (not Bieber) said at one point Bieber
“did not think it was a scheme and thought this was just fine, and it wasn’t.” Yet this
off-the-cuff remark needs to be placed in the context of the entire hearing. Bieber
consistently took responsibility for his conduct and admitted it was fraudulent. His
attorney made the foregoing statement as a way of emphasizing that Bieber understood
at the time that the $55,000 kickback was going into building repairs rather than being
kept by Hanneken and Herdrich. The evidence that Bieber had that belief was
unrebutted. Overall, we think Bieber’s attorney mounted a vigorous but proper defense
of his client at the commission hearing.
15
[f]undamental honesty is the base line and mandatory
requirement to serve in the legal profession. The whole
structure of ethical standards is derived from the paramount
need for lawyers to be trustworthy. The court system and
the public we serve are damaged when our officers play fast
and loose with the truth.
Kallsen, 814 N.W.2d at 239 (citation and internal quotation marks
omitted). Although we do not have any cases where we sanctioned an
attorney for misconduct identical to Bieber’s, we do find the following
authorities to be instructive.
In the Nelsen case, discussed above, we revoked the attorney’s
license for aiding and abetting his clients in converting funds even
though the attorney had not received any personal gain from those
funds. 807 N.W.2d at 267–68. However, in that case the attorney was
involved in a theft: He knowingly redirected $141,335.34 in accounts
receivable that belonged to a third-party secured creditor to his clients.
Id. at 261, 267. Our decision cited “the long-standing policy of this state
regarding attorneys who convert the funds of others.” Id. at 267. As we
explained, “This policy makes it clear that it is almost certain that we will
revoke the license of any attorney involved in the conversion of funds.”
Id.
We think that conduct was more egregious than the conduct here.
In Nelsen, the attorney knew his clients were stealing money and helped
them do it. In this case, there is no evidence that Bieber knew the
buyers were walking away with someone else’s money. The record shows
at most that Bieber enabled a lender to be defrauded into lending more
than it would otherwise have been willing to lend. Nelsen’s case also
demonstrated callous disregard for court orders and resulted in
significantly greater financial harm than the case at hand. Id. at 267.
16
Iowa Supreme Court Attorney Disciplinary Board v. Polsley, like
Nelsen, involved theft of property. 796 N.W.2d 881 (Iowa 2011). The
respondents in Polsley were husband and wife attorneys. Id. at 882. The
wife had been appointed trustee of her dying mother’s trust account
which then received social security survivor benefits. Id. at 882. After
the mother died, the Social Security Administration mistakenly
continued to deposit payments into the account, and the couple
converted these funds for their own use. Id. Consequently, both Polsleys
ended up pleading guilty in federal court to “knowingly and willfully
convert[ing] government property.” Id. at 884. We revoked both of their
licenses. Id. at 886.
We think Polsley is distinguishable for largely the same reason as
Nelsen. Bieber did not convert funds himself or knowingly assist a client
in doing so. Rather, he made a misrepresentation in the real estate sales
paperwork that fraudulently induced Interbay Funding to enter into a
loan agreement with the buyers. While this conduct is reprehensible, we
do not think it is the same as outright theft of another person’s money.
In Iowa Supreme Court Attorney Disciplinary Board v. Carroll, we
also revoked an attorney’s license. 721 N.W.2d 788, 789 (Iowa 2006).
There the attorney, as chairperson of a nonprofit organization, had
misappropriated funds for personal use and eventually pled guilty to
second-degree theft. Id. at 789–90.
In Iowa Supreme Court Board of Professional Ethics & Conduct v.
Williams, we revoked the license of an attorney who pled guilty to
“interstate transportation of stolen property and wire fraud.” 675 N.W.2d
530, 531 (Iowa 2004). The convictions were based on the attorney’s
embezzlement from two different companies that employed her. Id. at
531–32. As a head of the claims department of a trucking company, she
17
fraudulently obtained $692,540.22 by “submitting fictitious accident
claims to her employer” and diverting the checks to her personal bank
account. Id. at 531. She also defrauded an insurance company that
employed her of $386,713.78 by authorizing the payment of claims to a
fictitious claimant which was one of her several aliases. Id. at 532.
Again, we find these theft and conversion cases distinguishable
from the present case where the attorney received his normal closing fee
to knowingly abet a fraudulent transaction but was not aware that funds
were being converted. Our cases are legion that thefts of funds,
particularly when the attorney has been criminally convicted for the
underlying conduct, will normally result in revocation. See Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Wengert, 790 N.W.2d 94, 103–04
(Iowa 2010) (revoking law license for two instances of misappropriating
client funds); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Earley, 774
N.W.2d 301, 308–09 (Iowa 2009) (revoking license for misappropriating
client funds); Williams, 675 N.W.2d 530, 532–33 (Iowa 2004) (revoking
the license of an attorney who defrauded two separate employers in
excess of $1 million for personal use, pled guilty to one count of
interstate transportation of stolen property and one count of wire fraud,
and was sentenced to thirty months in federal prison); Lett, 674 N.W.2d
139, 140–143 (revoking license of an attorney who gambled away
$13,300 stolen from a client, stole $5000 from another client for her own
burial expenses, and consequently pled guilty to second-degree theft);
Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Vinyard, 656 N.W.2d
127, 128–29, 131–32 (Iowa 2003) (revoking the law license of an attorney
who was convicted of several counts of mail fraud and money laundering
over a fraudulent scheme where the attorney and his brother
overcharged the brother’s employer and kept the money for themselves);
18
Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Lyzenga, 619 N.W.2d
327, 328 (Iowa 2000) (revoking the license of an attorney who had
fourteen convictions for theft, prostitution, trespass, forgery, and
deceptive practices, when much of the underlying conduct involving the
writing of bad or unauthorized checks and shoplifting); Iowa Supreme Ct.
Bd. of Prof’l Ethics & Conduct v. Schatz, 595 N.W.2d 794, 795–96 (Iowa
1999) (revoking the license of an attorney who pled guilty to theft and
income tax evasion after converting over $140,000 in legal fees after a
period of many years); Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v.
Palmer, 563 N.W.2d 634, 634–35 (Iowa 1997) (revoking the license of an
attorney who pled guilty to a felony after stealing two credit cards and
using them to obtain funds for his own purposes).
Yet when the criminal conviction involves fraudulent conduct
without theft or conversion, lesser sanctions have at times been imposed.
For example, in Romeo, we suspended an attorney’s license for three
years after the attorney falsified receipts to protect a client who was
under criminal suspicion. 554 N.W.2d at 553–55. The attorney had only
been convicted of a misdemeanor, but we accepted the jury’s finding that
“Romeo knowingly engaged in false and deceitful conduct.” Id. at 554.
Additionally, Romeo did not “reach this court with a sterling record,”
because he had a previous public reprimand for sending a letter that
threatened criminal charges solely to obtain an advantage in a civil
matter, and a prior conviction for simple misdemeanor theft. Id.
A closer analogy to the present case may be found in the Gallner
disciplinary proceeding. 621 N.W.2d at 183. In Gallner, we suspended
an attorney for six months for overstating the attorney fees he had
charged his clients for handling workers’ compensation cases in letters to
the Social Security Administration. 621 N.W.2d at 185. “By reporting
19
exaggerated attorney fees to the Social Security Administration, [the
attorney] enabled some of his clients to receive more social security
disability benefits than they would have been entitled to under the law.”
Id. In settling on a six-month suspension, we noted that the attorney
had a prior disciplinary record. Id. at 188. Gallner is instructive here
because it involved an attorney who made affirmative written
misrepresentations in the course of a representation that enabled a party
to receive more funds than the party was entitled to. However, unlike in
the case at hand, the attorney in Gallner was not convicted of a crime. 8
There is also some similarity between Bieber’s misconduct and a
criminal conviction for failing to file tax returns. The latter cases, we
have said, involve “ ‘cheat[ing] the government.’ ” Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Knopf, 793 N.W.2d 525, 531 (Iowa 2011) (quoting Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Iversen, 723 N.W.2d 806, 810 (Iowa
2006)). In Knopf, we reviewed the varying levels of discipline meted out
by this court when attorneys failed to file tax returns. Id. We have
“imposed a sanction of license suspension from sixty days to three years”
in such cases. Id. For example, in Knopf we suspended the attorney for
three months after he had been convicted of two counts of fraudulent
practices for failing to file state income tax returns. Id. at 528–31. We
acknowledged that illness can be a mitigating factor and noted the
parties’ stipulation to additional mitigating factors including lack of a
8It should be noted, though, that Bieber understood the excess funds provided
by the lender would be spent on repairs to improve the property in which the lender had
a security interest. In Gallner, by contrast, the federal government was being induced
into making overpayments with no benefit in return. See also 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).
20
disciplinary history, cooperation with the Board, and the winding down
of the attorney’s practice. Id. at 531–32.
In Schall, we imposed a six-month suspension. 814 N.W.2d at
215. In addition to his conviction on three counts of third-degree
fraudulent practice for failure to file tax returns, the attorney
substantially underreported his income for several years after his failure
to file the returns was discovered. Id. at 212. We determined the
attorney violated rule 32:8.4(c) by engaging in conduct involving
dishonesty, fraud, deceit, or misrepresentation. Id. at 213–14.
In Fields, a tax evasion case in which we imposed an eighteen-
month suspension, the attorney was also found to have engaged in a
variety of other serious misconduct including neglect of two client
matters. 790 N.W.2d at 793.
In Iowa Supreme Court Board of Professional Ethics & Conduct v.
Neuwoehner, we imposed a ninety-day suspension upon an attorney who
had been convicted of third-degree fraudulent practices for failure to file
state income tax returns, while noting that “a lawyer’s failure to file
income tax returns misrepresents that lawyer’s income.” 595 N.W.2d
797, 798 (Iowa 1999). 9
Admittedly, a difference between this case and the failure to file
income tax return cases is that the deceptive acts in this case were
committed in the course of the attorney’s representation of a client. On
the other hand, when an attorney fails to report income to the
9In Vinyard, we said, “Where felony convictions have directly involved dishonest
conduct, we have revoked the attorney’s license to practice law.” 656 N.W.2d at 132.
That is a true statement. Yet as the foregoing summary indicates, we have not
automatically revoked the license of an attorney who is convicted of conduct involving
fraud. An important consideration, as we discuss above, is whether the fraud included
a theft or conversion of funds.
21
government, he or she is deriving a direct personal benefit from the
fraud, a circumstance not present here.
In Committee on Professional Ethics & Conduct v. Littlefield, we
revoked the license of an attorney who had been convicted in Kentucky of
attempting to commit a felony by making a false statement to procure a
credit card. 244 N.W.2d 824, 825–26 (Iowa 1976). While that case did
not involve a completed theft, the fraud was for the attorney’s personal
benefit. Id. at 825. Moreover, we emphasized that the attorney had
“determined to evade the restrictions of his probation and willfully
disobeyed the order” of the Kentucky court that he not practice law
during his probation by removing himself to Iowa and resuming the
practice of law. Id. at 825–26. As to the latter conduct, we concluded:
His dishonest and deceitful conduct in these regards
demonstrates his lack of the requisite good moral character
required of an individual before he is permitted to engage in
the practice of law in this state, and his actions permit of no
other sanction than the immediate and permanent
revocation of his license to practice the profession of law in
Iowa.
Id. at 826. Thus, the revocation in Littlefield appears to have been based
in large part on the attorney’s willful evasion of the terms of his court-
imposed probation. Notably, we cited Littlefield with approval in a
subsequent case where we imposed a ninety-day suspension on an
attorney who had engaged in fraudulent conduct but was unable to
complete his intended conversion of funds. See Comm. on Prof’l Ethics &
Conduct v. Millen, 357 N.W.2d 313, 314–15 (Iowa 1984). In that case, the
attorney had been ordered during his pending divorce proceeding not to
withdraw any funds from a specific account without the written approval
of his wife. Id. at 314. In violation of that order, the attorney had
drafted checks worth over $26,000 payable to himself and forged his
22
wife’s signature to those checks. Id. He was unsuccessful only because
the wife’s attorney learned of the checks and contacted the payor
institution in time. Id.
Courts in other jurisdictions have considered the appropriate
sanction for an attorney convicted of misprision of a felony and reached
varying conclusions, depending on the situation. See Att’y Grievance
Comm’n of Md. v. Wingerter, 929 A.2d 47, 57–58, 60 (Md. 2007)
(disbarring attorney who pled guilty to misprision of a felony after
acknowledging that he was aware of the existence of a conspiracy to
engage in immigration fraud and affirmatively acted to conceal such
activity); In re Calonge, 859 N.Y.S.2d 536, 536–37 (App. Div. 2008)
(suspending lawyer for two years subsequent to conviction of misprision
of a felony for “mail[ing] a letter to the United States Citizenship and
Immigration Services for the purpose of concealing a fraudulent
certification of employment”); State ex rel. Okla. Bar Ass’n v. Golden, 201
P.3d 862, 863–64, 866 (Okla. 2008) (disbarring attorney whose
involvement in health care fraud cover-up led to conviction of misprision
of a felony for which he was sentenced to three years probation and
ordered to pay $5,719,340.22 in restitution).
In In re Russell, a New York appellate court considered the case of
an attorney who pled guilty to misprision of a felony and was sentenced
to a term of probation of one year, confined to his home with
electronic monitoring for a period of six months, ordered to
pay a fine in the sum of $25,000 and a special assessment in
the sum of $100, directed to perform 20 hours per week of
community service while on probation, and ordered to
participate in a mental health treatment program.
877 N.Y.S.2d 364, 365 (App. Div. 2009). The court held that a six-month
suspension was an appropriate sanction in light of the attorney’s lack of
a disciplinary record in New York, acknowledgement of his misconduct,
23
expression of remorse, cooperation with the grievance committee, “strict
adherence to the terms of his suspension and federal probation, his
meticulous record keeping, and the fact that he ha[d] been automatically
reinstated in the State of Connecticut upon the expiration of his federal
probation.” Id.
In an Arizona case, an attorney pled guilty to misprision of a felony
after being named as a defendant in a federal indictment alleging
conspiracy to defraud the United States in relation to a former client’s
tax evasion scheme. In re Morris, 793 P.2d 544, 545 (Ariz. 1990). The
Supreme Court of Arizona suspended the attorney for six months
pursuant to an Arizona disciplinary rule that required the suspension of
any attorney convicted of a felony. Id. at 546–47. The mitigating factors
in that case were that the attorney had been a member of the bar for over
twenty years, he had no prior disciplinary record, and there was no
evidence of a “dishonest or selfish motive or desire for pecuniary gain.”
Id. at 547.
In State ex rel. Counsel for Discipline v. Boose, the Supreme Court
of Nebraska held that disbarment was the appropriate sanction for an
attorney in a reciprocal disciplinary proceeding. 759 N.W.2d 110, 113
(Neb. 2009). The attorney failed to report that his client, a county
commissioner, was engaging in illegal self-dealing in a public real estate
transaction. Id. at 112. The attorney had pled guilty to misprision of a
felony and had been suspended for three years by the Florida Supreme
Court. Id. at 112–13.
We agree with the commission that Bieber’s lack of a prior
disciplinary record is an important mitigating factor. See Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Lustgraaf, 792 N.W.2d 295, 301–02 (Iowa
2010) (noting the lack of a prior record of discipline as a mitigating
24
factor); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Howe, 706 N.W.2d 360,
379 (Iowa 2005) (same). An additional mitigating factor is Bieber’s record
of community service. See Schall, 814 N.W.2d at 215 (recognizing
voluntary community service as a mitigating factor); Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Boles, 808 N.W.2d 431, 442 (Iowa 2012) (same).
Also, Bieber acknowledged wrongdoing and expressed remorse for his
actions. He has paid the entire restitution. Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Taylor, 814 N.W.2d 259, 268 (Iowa 2012) (finding that
taking responsibility for one’s actions is a mitigating factor); Iowa
Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Tofflemire, 689 N.W.2d 83,
93 (Iowa 2004) (“A mitigating factor is the attorney’s recognition of some
wrongdoing.”). And Bieber has cooperated fully with the Board and the
commission. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Denton, 814
N.W.2d 548, 551 (Iowa 2012) (noting cooperation as a mitigating
circumstance). A further mitigating factor is that Bieber is well respected
in his legal community, as several character witnesses attested. See
Iowa Supreme Ct. Att’y Disciplinary Bd. v. Iversen, 723 N.W.2d 806, 811
(Iowa 2006) (noting that “we do not overlook an attorney’s devoted service
to the profession” (quoting Iowa Supreme Ct. Bd. of Prof’l Ethics and
Conduct v. Frerichs, 671 N.W.2d 470, 478 (Iowa 2003))). Lastly, we are
persuaded that Bieber’s misconduct was not motivated by a desire for
financial gain. See Howe, 706 N.W.2d at 380 (noting as a mitigating
factor that the attorney did not intend to obtain any personal financial
benefit). Bieber only stood to receive the standard $400 fee he charged
for any real estate closing. 10
10The Board did not treat Bieber’s recent illness as a mitigating factor. We follow
the same approach. While we certainly sympathize with Bieber’s present medical
situation, for mitigation purposes we generally focus on whether the attorney was
25
Yet the fact remains that Bieber was involved in a criminal fraud
as part of his law practice, albeit one that did not involve—as far as he
knew—a theft or conversion of funds. Although Bieber has demonstrated
that he and his client operated under a reasonable belief that Hanneken
and Herdrich were going to use the additional loan proceeds to improve
the property, rather than abscond with them, Bieber correctly
acknowledges that “if somebody hadn’t done the part of it that I did, they
wouldn’t have been able to pull it off.” This serious violation of our
ethical standards warrants a significant sanction.
V. Disposition.
In light of all of the facts and circumstances in this case, and after
careful consideration of the goals of our ethical rules, mitigating and
aggravating factors, our precedents, and cases from other jurisdictions,
we suspend Bieber’s license to practice law in this state indefinitely with
no possibility of reinstatement for six months. This suspension applies
to all facets of the practice of law. See Iowa Ct. R. 35.12(3). Bieber must
comply with Iowa Court Rule 35.22 dealing with the notification of clients
and counsel.
Upon application for reinstatement, Bieber must establish that he
has not practiced law during the suspension period and that he has
complied with the requirements of Iowa Court Rules 35.13 and 35.22.
The costs of this action are taxed to Bieber pursuant to Iowa Court Rule
35.26(1).
LICENSE SUSPENDED.
All justices concur except Waterman and Zager, JJ., who concur
specially, and Wiggins, J., who dissents.
_______________
suffering from a health condition when the misconduct occurred. See Schall, 814
N.W.2d at 215.
26
#12–1203, Bd. v. Bieber
WATERMAN, J. (concurring specially).
I join in the well-reasoned majority opinion, but write separately to
respond to the dissent by Justice Wiggins. The dissent accuses Bieber of
stealing and calls for the permanent revocation of his law license. The
dissent’s accusation is inaccurate, and the dissent’s punishment does
not fit the crime. Bieber did not steal a dime. Nor did he know other
parties to the real estate transaction ultimately would default on the
bank loan. Bieber collected only a standard $400 fee and, later,
personally paid the entire $37,969 restitution to make the bank whole.
Before this case, he had an unblemished record, excellent reputation,
and history of giving back to his community with voluntary service. The
Attorney Disciplinary Board, acting as prosecutor, never sought
revocation and concurred in the six-month suspension recommended by
the grievance commission panel that conducted the evidentiary hearing.
The revocation cases cited by the dissent involved far more egregious
misconduct.
The majority opinion does what our court strives to do in all lawyer
discipline cases: carefully reviews the evidence, the applicable rules, the
mitigating and aggravating circumstances, and precedent to determine
the appropriate sanction. One size does not fit all. See Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Cannon, 821 N.W.2d 873, 880 (Iowa 2012)
(“There is no standard sanction warranted by any particular type of
misconduct. Though prior cases can be instructive, the sanction
warranted in a particular case must be based on the circumstances of
that case.” (Citation omitted.)). The dissent’s call for revocation on this
record is at odds with our court’s precedent. Notably, Justice Wiggins’s
dissent fails to cite the decision he authored in Iowa Supreme Court
27
Attorney Disciplinary Board v. Iversen, 723 N.W.2d 806, 810–12 (Iowa
2006). In that case, our court suspended for one year the license of an
attorney guilty of tax fraud. Iversen, 723 N.W.2d at 811–12. Iversen
cheated our state government out of $207,743—money he pocketed
illegally. Id. at 808. Iversen also failed to file a federal tax return for ten
years, allowing him to illegally retain $180,000 to $200,000 in taxes that
he owed the federal government. Id. Iversen’s revocation clearly would
be required under the definition of stealing in today’s dissent. Justice
Wiggins wrote in that case, “ ‘It is as wrong for a lawyer to cheat the
government as it is for him to cheat a client.’ ” Id. at 810 (quoting Comm.
on Prof’l Ethics & Conduct v. Strack, 225 N.W.2d 905, 905 (Iowa 1975)).
But, he also stated, “[W]e adapt sanctions to the unique facts of each
case.” Id. That is what he fails to do today.
The dissent gets the facts wrong, and then misapplies our
precedent. The dissent argues Bieber knowingly “assisted a client in
stealing money from the bank.” First, the record evidence confirms
Bieber did not know anyone in the transaction would steal or fail to
repay the bank loan. He believed the borrowers would spend the
additional loan proceeds to fix up the property that secured the loan. He
assumed the bank would be repaid. Bieber was not charged with theft,
nor could he have been charged with theft absent intent to deprive
another of property. See Iowa Code § 714.1(1) (2005).
Second, Bieber’s client was Wood, the seller. Bieber did not
represent Hanneken or Herdrich, the buyers who later “stole” from the
bank by defaulting on the loan they obtained. Bieber, to his shame and
regret, enabled them by falsifying the documents to show an inflated sale
price in a single transaction before the real estate market crashed. His
misconduct warrants the six-month suspension our court imposes today,
28
as recommended by the disciplinary board and grievance commission.
But, the dissent is wrong to equate Bieber’s conduct to the “conduct that
prompted us to revoke the law licenses” of the attorneys in four other
cases: Iowa Supreme Court Attorney Disciplinary Board v. Nelsen, 807
N.W.2d 259, 267–68 (Iowa 2011); Iowa Supreme Court Board of
Professional Ethics & Conduct v. Vinyard, 656 N.W.2d 127, 132 (Iowa
2003); Committee on Professional Ethics & Conduct v. Hall, 463 N.W.2d
30, 35–36 (Iowa 1990); and Committee on Professional Ethics & Conduct
v. Littlefield, 244 N.W.2d 824, 825–26 (Iowa 1976).
The majority opinion correctly distinguishes Nelsen and Vinyard.
In Nelsen, the attorney violated court orders by diverting at least
$141,335 of receivables to his clients and thereby knowingly aided and
abetted their conversion of bank funds. 807 N.W.2d at 261, 267. In
Vinyard, the attorney was convicted of fourteen counts of mail fraud and
twelve counts of money laundering. 656 N.W.2d at 128. The victims’
loss exceeded $2.8 million. Id. at 131. We noted Vinyard “engaged in a
lengthy pattern of misconduct . . . all for the sake of personal, pecuniary
gain.” Id. at 132. By contrast, Bieber’s discipline involves a single
transaction in which he merely collected a $400 fee. He was not
breaking the rules for personal gain, and he made the victim bank whole
by paying the restitution of $37,969.
Hall likewise involved aggravating circumstances not present here.
In that case, the lawyer entered into a series of business transactions
with his client over a four-year period despite their conflicting interests
and the absence of disclosure and consent. Hall, 463 N.W.2d at 33–35.
Some of the transactions were for the lawyer’s benefit alone, and most
were disastrous for the client, who lost several hundred thousand
dollars. Id. at 35–36. Hall lied to obtain a $350,000 bank loan and
29
“later gave false testimony in a sworn deposition regarding the incident,
and also when he made false representations to the Committee on
Professional Ethics and Conduct.” Id. at 35. Hall also had been
reprimanded for misconduct with another client three years earlier. Id.
at 36. By contrast, Bieber had a clean record, and his misconduct did
not harm his client. He cooperated throughout the disciplinary
proceedings and testified truthfully.
Littlefield is no closer to the mark. Littlefield was sentenced to
incarceration for one year in a Kentucky county jail for bank fraud and
then violated the terms of his probation by foregoing court-ordered
psychiatric treatment and fleeing to Iowa to practice law in willful
disobedience of the Kentucky court order. Littlefield, 244 N.W.2d at 825–
26. By contrast, Bieber honored the terms of his probation, complied
with court orders, and expressed appropriate remorse and contrition.
None of the other revocation cases relied on by the dissent is on
point here. Moreover, the dissent’s discussion of revocation cases from
other jurisdictions fails to mention that in most of those states,
revocation can be temporary, with readmission permitted. See James R.
Zazzali, The Whys and Hows of Permanent Disbarment: New Jersey’s
Wilson Rule, 21 Geo. J. Legal Ethics 311, 337 n.224 (2008) (listing Iowa
as one of approximately six states where license revocation is
permanent). Similarly, the dissent relies on the ABA standards without
noting disbarment may only be temporary. See ABA Model Rules for
Lawyer Disciplinary Enforcement R. 25 (2002) (permitting and setting
forth the criteria for readmission after disbarment). By contrast,
revocation of an Iowa law license is permanent.
I agree revocation is appropriate when a lawyer steals or helps
another person the lawyer knows is stealing. That is not what Bieber
30
did. His six-month suspension fits the crime and matches the six-month
suspension today for comparable misconduct in Iowa Supreme Court
Disciplinary Board v. Wheeler, 824 N.W.2d 505 (Iowa 2012).
Zager, J., joins this special concurrence.
31
#12–1203, Iowa Supreme Ct. Att’y Disciplinary Bd. v. Bieber
WIGGINS, Justice (dissenting).
It is almost axiomatic that we revoke the license of a lawyer who
steals. Comm. on Prof’l Ethics & Conduct v. Ottesen, 525 N.W.2d 865,
866 (Iowa 1994). There is no place in our profession for an attorney who
steals funds from another. Iowa Supreme Ct. Bd. of Prof’l Ethics &
Conduct v. Bell, 650 N.W.2d 648, 652 (Iowa 2002). Dishonesty is a trait
that disqualifies a person from the practice of law. Iowa Supreme Ct. Bd.
of Prof’l Ethics & Conduct v. Irwin, 679 N.W.2d 641, 644 (Iowa 2004).
We have an obligation to protect the public from theft and deceit.
Bell, 650 N.W.2d at 652. When a theft occurs, we need not address other
disciplinary violations to revoke an attorney’s license. See, e.g., Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Adams, 809 N.W.2d 543, 546 (Iowa
2012); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Earley, 774 N.W.2d 301,
309 (Iowa 2009). We do not diminish the seriousness of the violation for
stealing funds where the attorney’s misappropriation does not involve
client funds. Bell, 650 N.W.2d at 652. The amount of money converted
by the attorney also does not lessen the discipline. Iowa Supreme Ct. Bd.
of Prof’l Ethics & Conduct v. Anderson, 687 N.W.2d 587, 590 (Iowa 2004).
Neither does it matter that the attorney replaced the funds. Comm. on
Prof’l Ethics & Conduct v. Pappas, 313 N.W.2d 532, 533–34 (Iowa 1981).
We have done a decent job applying these principles when
disciplining attorneys involved in thefts. We revoked the license of
attorneys who misappropriated funds from their clients. See, e.g.,
Adams, 809 N.W.2d at 546; Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Wengert, 790 N.W.2d 94, 104 (Iowa 2010); Earley, 774 N.W.2d at 309;
Iowa Supreme Ct. Att’y Disciplinary Bd. v. D’Angelo, 710 N.W.2d 226,
236–37 (Iowa 2006); Iowa Supreme Ct. Att’y Disciplinary Bd. v. Reilly, 708
32
N.W.2d 82, 85 (Iowa 2006); Anderson, 687 N.W.2d at 590; Iowa Supreme
Ct. Bd. of Prof’l Ethics & Conduct v. Lett, 674 N.W.2d 139, 144–45 (Iowa
2004); Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Leon, 602
N.W.2d 336, 339 (Iowa 1999). We revoked the license of an attorney
when he knowingly assisted a client defraud a bank. Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Nelsen, 807 N.W.2d 259, 267–68 (Iowa 2011).
We revoked the license of an attorney who personally defrauded a bank
with a false loan application. Comm. on Prof’l Ethics & Conduct v. Hall,
463 N.W.2d 30, 35–36 (Iowa 1990). We revoked the license of an
attorney who gave false information to a bank to obtain a credit card.
Comm. on Prof’l Ethics & Conduct v. Littlefield, 244 N.W.2d 824, 826 (Iowa
1976). We revoked the license of an attorney who stole money from his
law firm. Irwin, 679 N.W.2d at 644–45; Iowa Supreme Ct. Bd. of Prof’l
Ethics & Conduct v. Carr, 588 N.W.2d 127, 129–30 (Iowa 1999); Comm.
on Prof’l Ethics & Conduct v. Hanson, 244 N.W.2d 822, 824 (Iowa 1976).
We revoked a lawyer’s license for stealing two credit cards and using
them without the owner’s authorization. Iowa Supreme Ct. Bd. of Prof’l
Ethics & Conduct v. Palmer, 563 N.W.2d 634, 634–35 (Iowa 1997). We
revoked a lawyer’s license for stealing from her employer. Iowa Supreme
Ct. Bd. of Prof’l Ethics & Conduct v. Williams, 675 N.W.2d 530, 533 (Iowa
2004). We revoked the license of a lawyer who helped his brother in a
scheme to defraud his brother’s employer. Iowa Supreme Ct. Bd. of Prof’l
Ethics & Conduct v. Vinyard, 656 N.W.2d 127, 132 (Iowa 2003). We
revoked the license of an attorney for stealing money from a nonprofit
association. Iowa Supreme Ct. Att’y Disciplinary Bd. v. Carroll, 721
N.W.2d 788, 791–92 (Iowa 2006). We revoked the licenses of husband-
and-wife attorneys for converting social security benefits erroneously
paid to the deceased mother of one of the attorneys. Iowa Supreme Ct.
33
Att’y Disciplinary Bd. v. Polsley, 796 N.W.2d 881, 886 (Iowa 2011). We
revoked the licenses of attorneys who commingled trust account funds
with their own monies. Comm. on Prof’l Ethics & Conduct v. Shaffer, 230
N.W.2d 1, 2–3 (Iowa 1975); Comm. on Prof’l Ethics & Conduct v. Rowe,
225 N.W.2d 103, 103–04 (Iowa 1975). The common thread running
through these license revocations is that the attorney did not have the
requisite character to practice law.
The facts in this case are undisputed. Bieber knowingly made a
false statement to the bank to assist his client in obtaining funds the
client would not otherwise be entitled to receive. In other words, Bieber
knowingly assisted his client in misappropriating money from the bank.
We revoked the law licenses of three other attorneys in three separate
matters for similar conduct. Nelsen, 807 N.W.2d at 267–68; Vinyard,
656 N.W.2d at 132; Hall, 463 N.W.2d at 35–36.
The majority avoids revoking Bieber’s license by suggesting this is
not a real theft. 11 This characterization is akin to putting lipstick on a
pig. The truth to this colloquialism is apparent: no matter how much
lipstick you apply, it is still a pig. Accordingly, no matter how the
majority characterizes Bieber’s conduct, he still assisted a client in
stealing money from the bank. Stealing is stealing.
On top of that, his conduct earned him the distinction of becoming
a convicted felon. Other jurisdictions have no hesitation in revoking an
attorney’s license when he or she participates in defrauding a bank and
11The majority relies on our decision in Iowa Supreme Court Board of
Professional Ethics & Conduct v. Gallner, 621 N.W.2d 183 (Iowa 2001), to characterize
Bieber’s conduct as a misrepresentation. We analyzed Gallner’s conduct as a
misrepresentation he made to the Social Security Administration and not as a theft.
Gallner, 621 N.W.2d at 187. Moreover, Gallner was not a convicted felon. Had we
analyzed Gallner’s conduct as a theft, I believe the outcome would have been different.
34
is subsequently convicted of a felony. At least twenty-one other states
will revoke the license of or disbar an attorney for similar conduct. 12 My
12See, e.g., Cambiano v. Ligon, 44 S.W.3d 719, 720–21 (Ark. 2001) (disbarring
attorney convicted of aiding and abetting the causing of a financial institution to file a
false currency-transaction report); People v. Hilgendorf, 895 P.2d 544, 544–45 (Colo.
1995) (disbarring attorney with a federal conviction for two counts of bank fraud); In re
Brewster, 587 A.2d 1067, 1067 (Del. 1991) (disbarring attorney who pleaded guilty to
one count of bank fraud); In re Lickstein, 972 A.2d 314, 316 (D.C. 2009) (disbarring
attorney convicted of conspiring to commit felony bank fraud through a scheme
involving mortgage financing); Florida Bar v. Forbes, 596 So. 2d 1051, 1051–53 (Fla.
1992) (ordering disbarment retroactively to the date of the felony suspension for
attorney who pleaded guilty to making false statements in financial documents); In re
Brannon, 291 S.E.2d 523, 523–24 (Ga. 1982) (accepting attorney’s voluntary surrender
of license to practice law after attorney pleaded guilty to making a materially false
statement to a bank); In re Dickson, 824 P.2d 197, 197–98 (Kan. 1992) (disbarring
attorney who made false statements to a bank); Ky. Bar Ass’n v. Matthews, 131 S.W.3d
744, 744–45 (Ky. 2004) (disbarring attorney convicted of seven counts of defrauding
financial institutions); In re Schneider, 707 So. 2d 38, 39–40 (La. 1998) (disbarring
attorney with convictions including mail fraud, conspiracy to commit mail fraud, and
intentionally submitting false statements to a financial institution); In re Kennedy, 697
N.E.2d 538, 541 (Mass. 1998) (disbarring attorney who pleaded guilty to eleven counts
of making false statements to a lender, mail fraud, and wire fraud); In re Discipline of
Peterson, 110 N.W.2d 9, 12–14 (Minn. 1961) (disbarring attorney for submitting false
statements to a bank); Miss. Bar v. Castle, 38 So. 3d 632, 633–34 (Miss. 2010)
(disbarring attorney for her involvement in a mortgage fraud operation, which resulted
in her convictions for crimes including conspiracy to defraud a bank and money
laundering); In re Ellis, 28 A.3d 1241, 1241 (N.J. 2011) (disbarring attorney who
pleaded guilty to bank fraud and conspiracy to commit bank fraud); In re Powder, 826
N.Y.S.2d 82, 82–83 (App. Div. 2006) (disbarring attorney convicted of defrauding a bank
after he submitted escrow letters containing false statements in order to obtain loan
proceeds); Office of Disciplinary Counsel v. Lowe, 662 N.E.2d 796, 796–97 (Ohio 1996)
(disbarring attorney convicted of using a false social security number in financial
transactions, making false representations in a loan application, defrauding a bank,
and transporting interstate fraudulent securities); State ex rel. Okla. Bar Ass’n v. Hobbs,
848 P.2d 551, 551–52 (Okla. 1993) (disbarring attorney who pleaded guilty to bank
fraud, money laundering, and embezzlement); In re Conduct of Griffith, 748 P.2d 86, 125
(Or. 1987) (disbarring attorney who participated in sham transaction with his partner to
circumvent federal banking laws and misrepresented his net worth to a bank); In re
Concemi, 706 A.2d 1318, 1318–19 (R.I. 1998) (disbarring attorney convicted of thirty-
five felony charges, including conspiracy to defraud a bank, bank fraud, and making
false statements to a bank); In re Walters, 735 S.E.2d 635, 636–37 (S.C. 2011)
(disbarring attorney who pleaded guilty to misprision of felony, bank fraud, and making
false statements to a lending institution); In re Holt, 492 S.E.2d 793, 793 (S.C. 1997)
(disbarring attorney after he pleaded guilty to one count of bank fraud); In re Looby, 297
N.W.2d 487, 489 (S.D. 1980) (disbarring attorney convicted of making false statements
to a financial institution); Searcy v. State Bar of Texas, 604 S.W.2d 256, 260 (Tex. 1980)
(disbarring attorney convicted of making false statements to a bank in a loan
application).
35
position is also consistent with the ABA Standards for Imposing Lawyer
Sanctions. The ABA Standards provide:
Absent aggravating or mitigating circumstances, upon
application of the factors set out in Standard 3.0, the
following sanctions are generally appropriate in cases
involving commission of a criminal act that reflects adversely
on the lawyer’s honesty, trustworthiness, or fitness as a
lawyer in other respects, or in cases with conduct involving
dishonesty, fraud, deceit, or misrepresentation:
5.11 Disbarment is generally appropriate when:
(a) a lawyer engages in serious criminal conduct a
necessary element of which includes intentional
interference with the administration of justice, false
swearing, misrepresentation, fraud, extortion,
misappropriation, or theft; or the sale, distribution or
importation of controlled substances; or the
intentional killing of another; or an attempt or
conspiracy or solicitation of another to commit any of
these offenses; or
(b) a lawyer engages in any other intentional
conduct involving dishonesty, fraud, deceit, or
misrepresentation that seriously adversely
reflects on the lawyer’s fitness to practice.
ABA Standards for Imposing Lawyer Sanctions §§ 5.1, 5.11 (1992).
We also have revoked the license of an attorney for substantially
similar conduct. Littlefield, 244 N.W.2d at 826. In Littlefield, a court
convicted Littlefield of the crime of attempting to commit a felony, which
is a misdemeanor under the laws of Kentucky. Id. at 825. The
underlying facts of the crime were that Littlefield made a false statement
regarding his financial condition to a bank in order to procure a credit
card. Id. Based on that misrepresentation, we found
[h]is dishonest and deceitful conduct in these regards
demonstrates his lack of the requisite good moral character
required of an individual before he is permitted to engage in
the practice of law in this state, and his actions permit of no
other sanction than the immediate and permanent
revocation of his license to practice the profession of law in
Iowa.
36
Id. at 826.
Had Bieber been convicted of this felony before he became a
lawyer, I doubt we would have allowed him to sit for the bar exam. See
Iowa Code § 602.10102 (2011) (“Every applicant for such admission shall
be a person of honesty, integrity, trustworthiness, truthfulness and one
who appreciates and will adhere to a code of conduct for lawyers as
adopted by the supreme court.”); Iowa Ct. R. 31.9(1) (requiring all
persons who apply for admission to the Iowa bar to have the requisite
moral character or fitness). The same test should apply to attorneys who
steal money or help others do so after they are licensed.
Ever since my appointment to the court, I have been troubled by
the court picking and choosing the types of fraud and stealing that will
result in the revocation or suspension of an attorney’s license. I initially
went along with this practice, because I felt it was important for the
court to speak with one voice when meting out attorney discipline.
In recent years, however, I have seen more and more attorneys
taking property from clients or knowingly aiding and abetting a client in
stealing property from others. Yet I held out hope that we would
abandon this inconsistent practice when we decided Nelsen. 807 N.W.2d
at 266–68. There, we revoked the license of an attorney who knowingly
aided and abetted his client in defrauding a bank of funds, even though
the attorney had no criminal conviction for his misconduct. Id.
Here, we have an attorney who knowingly helped his client obtain
funds from the bank. This constitutes the exact same conduct as in
Nelsen, but the case for Bieber’s license revocation is stronger. Bieber
pled guilty to this misconduct and has a felony conviction. Despite this,
the members of the court, once again, pick from their palate a rosier hue
37
of stealing and choose to impose a discipline inconsistent with our
precedent. For this reason, I can no longer remain silent. 13
It is the court’s obligation to protect the public from attorneys who
are unfit to practice law. Bieber’s law license gave him the privilege of
assisting clients with their legal matters—it did not pave the way for him
to aid a client in defrauding a bank and committing a felony. By
choosing to undertake these actions, Mr. Bieber has forfeited his
privilege to practice law in this state.
We, as a court and as the regulatory body for our profession, have
an obligation to protect the public from dishonest attorneys. I echo the
beginning of this dissent—dishonesty is a trait that disqualifies a person
from the practice of law. A person who uses his law license to steal
money or aids another to do so is per se unfit to practice law. Cases like
this give the public the perception that a license to practice law is a
license to steal. I have no hesitation in revoking Bieber’s license.
13This is not the first time a member of this court has written separately in a
discipline case. See Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Marcucci, 543
N.W.2d 879, 884 (Iowa 1996) (Neuman, J., dissenting).