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Ethics
Lawyer who wrote on ethics issues is suspended after he is accused of helping client hide assets
An Iowa lawyer has received a two-year suspension for helping a client hide money from creditors and for “furtively” inserting a provision into a custody agreement. (Image from Shutterstock)
An Iowa lawyer has received a two-year suspension for helping a client hide money from creditors and for “furtively” inserting a provision into a custody agreement.
The Iowa Supreme Court suspended 68-year-old lawyer David L. Leitner of Iowa in a Dec. 8 opinion, according to a March 4 story by the Iowa Capital Dispatch.
Leitner had argued that his ethics articles had contributed to the profession and should be taken into account by ethics regulators. The Iowa Supreme Court’s Attorney Disciplinary Board had responded that the assertion is “particularly eyebrow-raising when his misconduct involves financial fraud,” according to the Iowa Capital Dispatch.
The disciplinary board allegations against Leitner were deemed to be admitted because he did not respond to the initial complaint.
The hidden money case involved Leitner’s representation of an Iowa seed dealer who was convicted of bankruptcy fraud in 2007 for hiding assets. Leitner allegedly created a company for the seed dealer in 2013. Leitner made himself the managing member of the company, allowing the seed dealer to send part of his income to the company while hiding it from the government, which was owed about $71,000.
Although Leitner made himself the contact for the seed dealer’s corporation, neither he nor his client converted funds from anyone, the state supreme court acknowledged.
“Moreover, the record does not show that the federal government or any other creditor was actually trying to collect [the seed dealer’s] receivables,” the state supreme court said. “And so the record does not show that the federal government or any other creditor was actually deceived or otherwise hampered in its efforts to collect. At most, the record shows that [the client] and Leitner hoped to deceive any creditors who might
try to collect.”
Leitner was also accused in a second disciplinary count of “furtively” adding a stipulation to a custody agreement. An opposing lawyer had crafted a PDF of the agreement based on terms adopted in a mediation and had sent it to Leitner. Unbeknownst to the opposing lawyer, Leitner added a provision giving his client a “first right of refusal” to care for his minor child whenever his ex-wife couldn’t do so, according to the allegations.
Leitner’s client signed the modified agreement, and it was returned to the opposing counsel. The modified agreement was then filed with the district court.
Other counts in the disciplinary complaint alleged that Leitner violated rules regarding conflicts of interest, contact with represented parties and client trust accounts.
The Iowa Supreme Court cited two aggravating factors. Although Leitner acknowledged trust account issues, he had not taken responsibility “for his worst behavior,” the state supreme court said. He had also made misleading statements about reaching an agreement on a suspension.
In mitigation, Leitner had no disciplinary history. Leitner had also provided pro bono and reduced-fee representation and had accepted appointments for indigent criminal defendants.
A lawyer for Leitner, David L. Brown, did not immediately respond to an ABA Journal email requesting comment. The phone number for Leitner’s law office was not taking messages.
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