Lawyer accused of trying to ‘swindle’ taxpayers gets license suspension

The Iowa Supreme Court has suspended for two years the license of an attorney accused of dishonest behavior and attempting to swindle federal taxpayers.

In January 2023, Grievance Commission of the Iowa Supreme Court recommended that the law license of David L. Leitner, now 68, be revoked by the court. That recommendation was based on charges made by the Iowa Supreme Court Attorney Disciplinary Board in March 2022, accusing Leitner of ethics violations related to four separate cases, and to an audit of client trust accounts.

In making that recommendation, the commission cited Leitner’s potentially “criminal” act of helping a client hide assets from the federal government, and to what the commission called Leitner’s “long pattern of deliberate misconduct and dishonesty.”

Leitner contested the commission’s recommendation that his license be revoked, arguing that the disciplinary board’s actions were “abusive” and had “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 showed evidence that Leitner had rejected the offer in writing, telling the board, “I cannot survive financially without income for 60 days.”

In contesting his proposed license revocation, Leitner 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.”

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

Leitner, the board alleged, had 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.”

Other matters cited by the Attorney Disciplinary Board and the Grievance Commission included a divorce case in which 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 with a specific “intent to deceive.”

In deciding what sanctions to impose, the Iowa Supreme Court found that two aggravating factors in the case against Leitner were his refusal to admit wrongdoing and his attempt to mislead the commission about his actions.

“He takes no responsibility for his worst behavior,” the court stated. “Leitner has repeatedly breached his duty of honesty by assisting his client’s efforts to mislead creditors, making false statements to the court, defrauding opposing counsel in a dissolution matter, knowingly providing a false answer on (a questionnaire), and trying to mislead the commission. This ‘pattern of deceit’ raises an inference that Leitner is ‘unfit to practice law.’”

The court, however, ruled that Leitner was more deserving of a two-year license suspension than a license revocation, citing his lack of prior disciplinary history. The court also noted that while Leitner took steps to thwart the government’s efforts to recover the money it was owed, there was no evidence to suggest anyone in the government had made such an effort. At worst, the court reasoned, Leitner had merely “hoped” to deceive the government should any collection efforts take place.

Leitner could not be reached for comment, 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.”

Leitner is a 1979 graduate of the University of Iowa Law School. He began practicing law in Iowa later that same year.