Iowa Supreme Court Attorney Disciplinary Bd. v. Lustgraaf, No. 10-0425.

CourtUnited States State Supreme Court of Iowa
Writing for the CourtTERNUS
Citation792 N.W.2d 295
Docket NumberNo. 10-0425.
Decision Date17 December 2010
PartiesIOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Complainant, v. Thomas E. LUSTGRAAF, Respondent.
792 N.W.2d 295

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Complainant,
v.
Thomas E. LUSTGRAAF, Respondent.


No. 10-0425.

Supreme Court of Iowa.

Dec. 17, 2010.

792 N.W.2d 297

Charles L. Harrington and David J. Grace, Des Moines, for complainant.

Thomas E. Lustgraaf of Lustgraaf Law Office, Council Bluffs, pro se.

TERNUS, Chief Justice.

This matter comes before us on the report of a division of the Grievance Commission of the Supreme Court of Iowa. See Iowa Ct. R. 35.10. The Iowa Supreme Court Attorney Disciplinary Board alleged the respondent, Thomas E. Lustgraaf, violated ethical rules by failing to file income tax returns for four years. The grievance commission found Lustgraaf violated our ethical rules and recommended a public reprimand. Upon our respectful consideration of the findings of fact, conclusions of law, and recommendation of the commission, we find Lustgraaf engaged in ethical violations as a result of his negligent failure to file tax returns, and therefore, we publicly reprimand him.

I. Standard of Review.

The supreme court reviews attorney disciplinary proceedings de novo. Iowa Supreme Ct. Att'y Disciplinary Bd. v. Wagner, 768 N.W.2d 279, 281 (Iowa 2009). The commission's findings and recommendations are given respectful consideration, but we are not bound by them. Iowa Supreme Ct. Att'y Disciplinary Bd. v. Casey, 761 N.W.2d 53, 55 (Iowa 2009). The board has the burden of proving attorney misconduct by a convincing preponderance of the evidence. Iowa Supreme Ct. Att'y Disciplinary Bd. v. Conrad, 723 N.W.2d 791, 792 (Iowa 2006). As frequently stated, " 'This burden is less than proof beyond a reasonable doubt, but more than the preponderance standard required in the usual civil case.' " Id. (quoting Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Lett, 674 N.W.2d 139, 142 (Iowa 2004)). Upon proof of misconduct, we may impose a lesser or greater sanction than that recommended by the commission. Id.

II. Factual Findings.

Lustgraaf was admitted to practice law in April of 2004. Thereafter, he practiced primarily criminal law in Council Bluffs. On September 3, 2009, the board filed a disciplinary complaint against Lustgraaf alleging he had failed to file income tax returns for the years 2002 through 2007. The board alleged that Lustgraaf's failure to file the returns violated Iowa Rules of Professional Conduct 32:8.4(b) ("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[.]"), 32:8.4(c) ("It is professional misconduct for a lawyer to ... engage in conduct involving dishonesty, fraud, deceit, or misrepresentation[.]"), and 32:8.4(d) ("It is professional misconduct for a lawyer to ... engage in conduct that is prejudicial to

792 N.W.2d 298
the administration of justice[.]").1 The board subsequently dropped the charges for tax years 2002 and 2003 because Lustgraaf was not licensed as a lawyer in those tax years.

The board contends Lustgraaf's failure to file tax returns violated 26 U.S.C. §§ 6012(a)(1)(A), 6017, and 6072(a) (2000). Under 26 U.S.C. § 6017, an individual who has net earnings from self-employment exceeding $400 must file an income tax return. Under 26 U.S.C. § 6072(a), a taxpayer is required to file tax returns based on a calendar year by April 15 of the following year, unless an extension is obtained. Schultz v. United States, 92 Fed.Cl. 213, 219 (Fed.Cl.2010). 26 U.S.C. § 6012(a)(1)(A) makes it a criminal offense for a taxpayer who has earned sufficient income to require him to file a federal income tax return to fail to do so.2 See United States v. Stierhoff, 549 F.3d 19, 25 (1st Cir.2008); see also United States v. Kahl, 583 F.2d 1351, 1355 (5th Cir.1978) (finding information properly notified defendant of alleged crime when it specifically stated "that the earnings of the accused were sufficient to require him to file a return and he failed to do so").

At the disciplinary hearing, Lustgraaf testified he had innocently and mistakenly believed that he had insufficient income to require the filing of the returns. He testified he was unaware of the requirement to file a return when self-employment income exceeds $400.3

Lustgraaf also presented the testimony of a certified public accountant from whom he had sought tax advice since 1996. This witness testified that he prepared tax returns for Lustgraaf in the years preceding Lustgraaf's law school years, but did not prepare any returns while Lustgraaf attended law school because Lustgraaf did not have any income during that time. The witness testified that, in each year subsequent to Lustgraaf's graduation from law school, Lustgraaf came to the witness's office to talk about Lustgraaf's income tax situation. On these occasions, the accountant would ask Lustgraaf whether Lustgraaf was "going to have a tax liability." Lustgraaf always responded that he "put out more money than [he] took in," and the accountant "never got into specifics on those years." The accountant testified that, if he had thought Lustgraaf was required to file income tax returns in the years in question, he would have told Lustgraaf to file.

By the time of the hearing, Lustgraaf had filed all tax returns and paid all required taxes. These returns showed that, in 2004, Lustgraaf's adjusted gross income was negative $6757. Although he owed no income taxes, he owed the federal government $2 in self-employment tax. Lustgraaf received a refund from the state of $16 in tax year 2004. In 2005, Lustgraaf's adjusted gross income was negative $23,833. He owed the federal government $93 in self-employment taxes and received a refund of $12 from the state. In 2006, Lustgraaf's federal adjusted gross income was negative $21,571. He owed no income

792 N.W.2d 299
tax on this amount, but did owe $1234 in self-employment tax. He received an $8 refund from the state. Lustgraaf had net operating business losses in 2006 that could be carried forward to 2007. These losses were sufficient to reduce his 2007 adjusted gross income to zero. Because Lustgraaf had prepared the 2007 return before he completed the return for 2006, he did not claim the net operating loss for 2006 in 2007. (He has three years to file an amended return.) Consequently, his tax returns for 2007 show an adjusted gross income of $33,043. He owed no federal income tax on this amount, but did owe $2339 in self-employment tax as well as penalty and interest of $899.37 on the self-employment tax. The record does not show whether taxes were owed to the state for the tax year 2007.

Lustgraaf was not charged with any criminal conduct by any governmental entity. He has no prior record of discipline, and two local attorneys testified that Lustgraaf had a good reputation in the legal community of Council Bluffs. Lustgraaf also presented evidence of significant pro bono work. It appears he fully cooperated with the disciplinary authorities and did not attempt to shift the blame for his conduct to anyone else.

The commission found that...

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17 practice notes
  • Iowa Supreme Court Attorney Disciplinary Bd. v. Bieber, No. 12–1203.
    • United States
    • United States State Supreme Court of Iowa
    • 7 Diciembre 2012
    ...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 factor); Iowa Supreme Ct. Att'y Disciplinary Bd. v. H......
  • State v. Ochoa, No. 08-0412.
    • United States
    • United States State Supreme Court of Iowa
    • 17 Diciembre 2010
    ...needs unrelated to general law enforcement that support a suspicionless search and interests involving enforcement of criminal laws792 N.W.2d 295that do not support a suspicionless search. In those cases involving mixed criminal and noncriminal interests, the government interests used to te......
  • Iowa Supreme Court Attorney Disciplinary Bd. v. Taylor, No. 16–0130.
    • United States
    • United States State Supreme Court of Iowa
    • 10 Noviembre 2016
    ...getting caught committing a crime, which constitutes a violation of this rule. See Iowa Supreme Ct. Att'y Disciplinary Bd. v. Lustgraaf, 792 N.W.2d 295, 299 (Iowa 2010). Thus, an attorney who commits a criminal act reflecting adversely on his or her fitness as a lawyer may be found to have ......
  • Iowa Supreme Court Attorney Disciplinary Bd. v. Bauermeister, No. 18-2219
    • United States
    • United States State Supreme Court of Iowa
    • 3 Mayo 2019
    ...of discipline. See Bieber , 824 N.W.2d at 527 ; Wheeler , 824 N.W.2d at 513 ; Iowa Supreme Ct. Att'y Disciplinary Bd. v. Lustgraaf , 792 N.W.2d 295, 301–02 (Iowa 2010) (considering prior ethical practices in fashioning sanction). Second, he self-reported his conduct. See Iowa Supreme Ct. At......
  • Request a trial to view additional results
17 cases
  • Iowa Supreme Court Attorney Disciplinary Bd. v. Bieber, No. 12–1203.
    • United States
    • United States State Supreme Court of Iowa
    • 7 Diciembre 2012
    ...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 factor); Iowa Supreme Ct. Att'y Disciplinary Bd. v. H......
  • State v. Ochoa, No. 08-0412.
    • United States
    • United States State Supreme Court of Iowa
    • 17 Diciembre 2010
    ...needs unrelated to general law enforcement that support a suspicionless search and interests involving enforcement of criminal laws792 N.W.2d 295that do not support a suspicionless search. In those cases involving mixed criminal and noncriminal interests, the government interests used to te......
  • Iowa Supreme Court Attorney Disciplinary Bd. v. Taylor, No. 16–0130.
    • United States
    • United States State Supreme Court of Iowa
    • 10 Noviembre 2016
    ...getting caught committing a crime, which constitutes a violation of this rule. See Iowa Supreme Ct. Att'y Disciplinary Bd. v. Lustgraaf, 792 N.W.2d 295, 299 (Iowa 2010). Thus, an attorney who commits a criminal act reflecting adversely on his or her fitness as a lawyer may be found to have ......
  • Iowa Supreme Court Attorney Disciplinary Bd. v. Bauermeister, No. 18-2219
    • United States
    • United States State Supreme Court of Iowa
    • 3 Mayo 2019
    ...of discipline. See Bieber , 824 N.W.2d at 527 ; Wheeler , 824 N.W.2d at 513 ; Iowa Supreme Ct. Att'y Disciplinary Bd. v. Lustgraaf , 792 N.W.2d 295, 301–02 (Iowa 2010) (considering prior ethical practices in fashioning sanction). Second, he self-reported his conduct. See Iowa Supreme Ct. At......
  • Request a trial to view additional results

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