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Lawyer accused of trying to ‘swindle’ taxpayers fights license revocation [1]

['Clark Kauffman', 'More From Author', '- August']

Date: 2023-08-10

A West Des Moines attorney accused of concocting a scheme to “swindle” the federal government is fighting the proposed revocation of his law license by citing his writings on ethics.

In January, the Grievance Commission of the Iowa Supreme Court recommended that the law license of David L. Leitner be revoked by the court. The recommendation was based on charges made by the Iowa Supreme Court Attorney Disciplinary Board in March 2022, accusing Leitner of 19 ethics violations related to four separate cases, and to an audit of client trust accounts.

In making that recommendation, the commission cited the potentially “criminal” act of helping a client hide assets from the federal government.

In recent months, Leitner has contested the commission’s recommendation that his license be revoked, arguing that the disciplinary board’s actions are “abusive” and have “gone way too far.” He has also argued that the board previously offered to resolve the case against him with a 60-day license suspension that he agreed to accept.

The board, however, has called this a “blatant misrepresentation” of the facts, and asserted that Leitner rejected the offer in writing, telling the board, “I cannot survive financially without income for 60 days.” The board also says Leitner deceptively omitted that correspondence when sharing with the commission information about the settlement offer.

In addition, the board says, new information about other ethics violations came to light after the offer was extended and so it notified Leitner in writing that the offer was withdrawn.

In contesting his proposed license revocation, Leitner has argued the Supreme Court should consider the fact that he has contributed to the legal profession by writing about ethics in various forums. The board counters that this claim is “particularly eyebrow-raising when his misconduct involves financial fraud.”

Board: Leitner ‘effectively swindled the federal government’

The board says that while Leitner stands accused of wrongdoing in four separate cases, his conduct in just one of those cases warrants a license revocation on its own.

Leitner, the board says, helped defraud the federal government by hiding a client’s assets and taking “active steps to keep the government from ever finding out the money existed.” Leitner, the board says, “effectively swindled the federal government out of money that it rightfully should have possessed.”

The case in question involves Leitner’s representation of Iowa seed dealer Marvin Mitchell and the creation of a limited liability company called Foodprairie. In 2007, Mitchell was convicted of bankruptcy fraud and sentenced to 18 months in prison after it was found that he had hidden assets from creditors by creating various business entities just before he declared bankruptcy.

In 2013, while still owing at least $70,000 to the U.S. Department of Agriculture, and with federal liens against his properties, Mitchell allegedly hired Leitner to create Foodprairie and had Leitner declare himself to be the managing member of the corporation. Mitchell was selling seed at that time and allegedly routed his income from the business to Foodprairie where he could access the money while concealing it from the federal government.

The creation of a company to hide assets “could be criminal and certainly fraudulent, dishonest (and) deceitful,” the disciplinary board said. “The whole point of Leitner’s Foodprairie scheme was to deprive the federal government of the funds to which it had rights.”

The other matters cited by the Attorney Disciplinary Board and the Grievance Commission include:

Altered documents: In a divorce case, Leitner allegedly made undisclosed alterations to a custody agreement. A district court judge then determined Leitner and his client had engaged in fraud by modifying the agreement, finding there was a specific “intent to deceive.” The board alleges various statements Leitner made to the district court in that case were knowingly false.

Conflict of interest: Leitner, at various times, represented both sides in a legal conflict that involved a contractual dispute. Leitner allegedly tried to conceal his involvement in one aspect of the case by preparing a document that he then had a client sign.

Violating court orders: In a civil case, a district court judge entered an order prohibiting Leitner from having any direct contact with a woman who had her own attorney and was subject to guardianship and conservatorship proceedings. Leitner allegedly violated that order and was sanctioned by the court for contacting the woman.

Client trust account: An audit of Leitner’s client trust account allegedly revealed negative balances of more than $5,000. Leitner allegedly collected $1,000 from a client as advance payment for legal fees, but did not deposit the money into the client’s trust account.

Leitner could not be reached for comment Thursday, but in filings related to the proposed license revocation, he argued he had been open and had “offered great assistance” to the disciplinary board’s investigators. “I was being as honest and open as I could be,” he told the Grievance Commission. “I know it’s foolish to try and make stuff up or hide things because then you just dig yourself a hole.”

His attorney has argued Leitner “should receive, at most, the 60-day suspension with automatic reinstatement, as offered by the board and accepted by him.”

The court has yet to rule on the Grievance Commission’s recommendation.

Leitner, 67, graduated from the University of Iowa Law School in 1979 and began practicing law that same year. He has no prior history of disciplinary action.

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