Iowa Supreme Court Attorney Disciplinary Bd. v. Wheeler

• Decision Date: 07 December 2012
• Docket Number: No. 12–0632.,12–0632.
• Citation: 824 N.W.2d 505
• Parties: IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Complainant, v. Ronald Lee WHEELER, Respondent.
• Court: Iowa Supreme Court

824 N.W.2d 505

IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD, Complainant,

v.Ronald Lee WHEELER, Respondent.

No. 12–0632.

Supreme Court of Iowa.

Dec. 7, 2012.

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

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

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. SeeIowa 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 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 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 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.” SeeIowa 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 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. See18 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 mortgage applications, this claim is contrary to his guilty plea wherein he admits that he “knowingly” made a false statement or report. See18 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, 795 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...