904 N.W.2d 589
Iowa2017Background
- Jason Springer, an Iowa attorney admitted in 2002 with no prior discipline, assisted clients (2009–2011) in two-step short-sale real estate transactions that concealed funding sources.
- In seven transactions his clients lacked funds; Springer caused HUD-1 forms to state the clients paid cash and failed to disclose that proceeds of a second, prearranged sale would finance the first sale.
- Springer closed ~40 such transactions for these clients and had closed thousands of loans in his career; he stopped after learning the scheme violated federal law in 2011.
- In 2015 Springer was convicted of seven counts of bank fraud (18 U.S.C. § 1344) and sentenced to prison, probation, and a $15,000 fine; he stipulated to issue preclusion of the criminal findings in the disciplinary hearing.
- The Grievance Commission found violations of multiple Iowa Rules of Professional Conduct and recommended revocation; the Iowa Supreme Court reviewed de novo and imposed a two-year suspension (no reinstatement during that period).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Springer assisted clients in criminal or fraudulent conduct (Iowa R. Prof. Conduct 32:1.2(d)) | Board: Springer knowingly submitted false HUD-1 forms and closed transactions that hid the financing scheme. | Springer: He did not prepare fraudulent HUD-1s and lacked intent to cause bank losses; he believed banks got what they negotiated. | Held: Issue preclusion from criminal conviction; Springer violated 32:1.2(d). |
| Whether Springer should have withdrawn when representation would violate rules/law (32:1.16(a)(1)) | Board: Continued assistance over two years required withdrawal earlier. | Springer: Stopped after learning scheme violated federal law. | Held: Springer violated 32:1.16(a)(1) for not withdrawing sooner. |
| Whether Springer made or failed to disclose material false statements to third parties (32:4.1(a) & (b)) | Board: HUD-1 misrepresentations were material and concealed use of second-sale proceeds; banks would not have approved if fully informed. | Springer: Asserted he disclosed resale intent and did not intend harm to banks. | Held: Violations of 32:4.1(a) and 32:4.1(b); his nondisclosure assisted the fraudulent scheme (precluded by criminal findings). |
| Whether Springer’s criminal conviction reflects adversely on honesty, trustworthiness, or fitness to practice (32:8.4(b)) | Board: Conviction and repeated conduct show pattern, risk to institutions, and indifference to legal obligations. | Springer: Less culpable than attorneys whose licenses were revoked; no actual loss to banks and only fees were forfeited/fined. | Held: Violation of 32:8.4(b); conviction bears on fitness to practice. |
Key Cases Cited
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Engelmann, 840 N.W.2d 156 (Iowa 2013) (HUD-1 misrepresentations supporting fraud and license revocation)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Bieber, 824 N.W.2d 514 (Iowa 2012) (six-month suspension for a single HUD-1 misstatement; lesser culpability)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Nelsen, 807 N.W.2d 259 (Iowa 2011) (revocation where attorney knowingly participated in scheme that converted bank funds)
- United States v. Springer, 866 F.3d 949 (8th Cir. 2017) (affirming Springer’s bank-fraud convictions and describing material risk to lenders)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Wheeler, 824 N.W.2d 505 (Iowa 2012) (six-month suspension where false loan documents did not indicate intent to misappropriate funds)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Stoller, 879 N.W.2d 199 (Iowa 2016) (factors to consider when tailoring disciplinary sanctions)
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Haskovec, 869 N.W.2d 554 (Iowa 2015) (discussing when failure to disclose implicates rule 32:4.1(b))
- Iowa Supreme Ct. Att’y Disciplinary Bd. v. Boles, 808 N.W.2d 431 (Iowa 2012) (community service and corrective measures as mitigating factors)