Iowa Supreme Court Attorney Disciplinary Board v. Marc R. Engelmann
840 N.W.2d 156
| Iowa | 2013Background
- Marc R. Engelmann, a long-practicing Iowa real estate attorney, was criminally convicted by a federal jury on nine counts (conspiracy, bank fraud, wire fraud) for preparing HUD-1/closing documents that overstated sales prices and concealed cash kickbacks in nine closings.
- The lenders suffered $392,937.73 in losses; the district court sentenced Engelmann to 36 months imprisonment and ordered restitution; convictions were affirmed on appeal after an evidentiary remand.
- The Iowa Attorney Disciplinary Board charged Engelmann with violations of 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); disciplinary proceedings were held in abeyance during the criminal appeal and his license was temporarily suspended.
- The Grievance Commission found violations of all charged rules, applied issue preclusion based on the criminal verdict, and recommended a six-month disciplinary suspension (in view of the criminal sentence and temporary suspension).
- Engelmann had told the commission through counsel he would surrender his license if his convictions were upheld; after the convictions were affirmed, he made no further mitigation submissions.
- The Iowa Supreme Court reviewed de novo, concluded Engelmann violated the listed rules (including knowingly making false material statements and assisting fraud), and revoked his law license.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Engelmann knowingly made false material statements and failed to disclose material facts (Iowa R. Prof. Conduct 32:4.1(a),(b)) | Board: HUD-1s and closing statements knowingly overstated prices and concealed kickbacks; material misrepresentations to lenders | Engelmann: believed closing agent/lender knew true prices and refunds; acted in good faith | Court: Issue preclusion from jury verdict; violated 32:4.1(a) and (b) |
| Whether Engelmann assisted client in criminal/fraudulent conduct and failed to withdraw (32:1.2(d), 32:1.16(a)(1)) | Board: preparing and delivering documents that misrepresented prices and continuing representation aided the fraud | Engelmann: client agreement preceded his involvement; believed structure was legitimate | Court: his repeated participation in nine closings knowingly assisted fraud; violated 32:1.2(d) and 32:1.16(a)(1) |
| Whether Engelmann’s criminal convictions reflect adversely on fitness to practice (32:8.4(b)) | Board: multiple felony convictions showing intent to defraud, victimized lenders, pattern of conduct — harms fitness | Engelmann: (no substantial mitigation presented) | Court: convictions and harm establish violation of 32:8.4(b) |
| Appropriate sanction (suspension vs. revocation) | Board: revocation appropriate given convictions and harm | Engelmann: previously indicated willingness to surrender license if convictions affirmed; commission recommended 6‑month suspension considering prison sentence | Court: revocation warranted — more serious than comparable six‑month cases (Bieber/Wheeler) due to multiple felonies, intent to cause lender loss, large restitution, pattern, and attorney’s experience |
Key Cases Cited
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Bieber, 824 N.W.2d 514 (Iowa 2012) (six‑month suspension for single‑transaction HUD false statements; distinguishing mitigation and lesser culpability)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wheeler, 824 N.W.2d 505 (Iowa 2012) (six‑month suspension where intent was to obtain loan, not to cause bank loss; mitigation considered)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Nelsen, 807 N.W.2d 259 (Iowa 2011) (revocation where attorney aided client in diverting significant bank funds)
- Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Vinyard, 656 N.W.2d 127 (Iowa 2003) (revocation for mail fraud and money laundering convictions involving client funds)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Stowers, 823 N.W.2d 1 (Iowa 2012) (discussing application of issue preclusion in disciplinary proceedings)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Clarity, 838 N.W.2d 648 (Iowa 2013) (deference to credibility findings of live factfinders and limits of appellate reexamination of such findings)