Iowa Supreme Court Attorney Disciplinary Board v. Anthony R. Johnson ( 2019 )

IN THE SUPREME COURT OF IOWA
No. 18–2113
Filed April 19, 2019
IOWA SUPREME COURT ATTORNEY DISCIPLINARY BOARD,
Complainant,
vs.
ANTHONY R. JOHNSON,
Respondent.
On review of the report of the Iowa Supreme Court Grievance
Commission.
Grievance commission recommends revocation of attorney’s license
to practice law for violations of disciplinary rules. LICENSE REVOKED.
Tara van Brederode and Wendell J. Harms, Des Moines, for
complainants.
Anthony R. Johnson, Ankeny, for pro se respondent.
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CADY, Chief Justice.
This case is before us on review from a report and recommendation
of a division of the Iowa Supreme Court Grievance Commission
concerning attorney Anthony R. Johnson. The report found Johnson
committed ethical violations and recommended revocation of his license
to practice law. We find Johnson violated the Iowa Rules of Professional
Conduct by engaging in criminal conduct involving fraud. We revoke his
license to practice law in Iowa.
I. Background Facts and Proceedings.
Anthony R. Johnson is an Iowa lawyer in Ankeny. He was
employed as an accountant for Saxton Motors, LC. In August 2016,
Johnson entered an Alford plea in the Iowa District Court for Polk
County to the felony offense of fraudulent practice in the first degree. 1
The charge was supported by evidence that Johnson embezzled
substantial sums of money from his employer by making false entries in
the records of the business for over a year. Essentially, Johnson
funneled income from the business into two secret, unauthorized
business accounts he established to receive the funds.
In October 2016, the district court sentenced Johnson to a
suspended ten-year term of incarceration and placed him on probation.
The sentence also imposed a fine and ordered him to pay restitution.
Johnson engaged in multiple instances of unethical conduct in the
past. His license was suspended in 2009 for abandoning his legal
practice in Ankeny. His license was never reinstated, and he has not
engaged in the practice of law since that time.
1An Alford plea allows a defendant to enter a plea without an admission of guilt.
North Carolina v. Alford, 400 U.S. 25, 39, 91 S. Ct. 160, 168 (1970).
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II. Board Complaint.
Based on the criminal conviction, the Iowa Supreme Court
Attorney Disciplinary Board filed a complaint against Johnson on
May 25, 2018. It alleged that his conduct resulting in the criminal
conviction violated Iowa Rule of Professional Conduct 32:8.4(b)
(committing a criminal act that reflects adversely on a lawyer’s honesty,
trustworthiness, or fitness as a lawyer) and rule 32:8.4(c) (engaging in
conduct involving dishonesty, fraud, deceit, or misrepresentation).
Johnson did not respond to the complaint after service of notice.
See Iowa Ct. R. 36.7 (providing allegations of complaint are deemed
admitted when respondent fails to timely answer the complaint). He also
did not appear at the hearing on the complaint.
The commission found Johnson violated rule 32:8.4(b) by
committing the crime of fraudulent practice in the first degree. It also
found the crime reflected adversely on Johnson’s fitness to practice law,
as well as the honesty and trustworthiness required of lawyers. It
further found Johnson violated rule 32:8.4(c) by knowingly and
intentionally defrauding his employer and that the dishonest conduct
also reflected adversely on his ability to practice law. The commission
recommended that Johnson’s license to practice law be revoked.
III. Standard of Review.
We review attorney disciplinary actions de novo. Iowa Supreme Ct.
Att’y Disciplinary Bd. v. Dolezal, 796 N.W.2d 910, 913 (Iowa 2011). We
give respectful consideration to the findings and recommendations by the
commission, but are not bound by them. Id. The Board must prove the
misconduct by a convincing preponderance of the evidence. Id.
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IV. Violation.
A. Rule 32:8.4(b). Rule 32:8.4(b) states, “It is professional
misconduct for a lawyer to . . . commit a criminal act that reflects
adversely on the lawyer’s honesty, trustworthiness, or fitness as a lawyer
in other respects.” Iowa R. Prof’l Conduct 32:8.4(b). Yet, not every
criminal act committed by attorneys reflects adversely on their fitness to
practice law. Compare Iowa Supreme Ct. Att’y Disciplinary Bd. v.
Templeton, 784 N.W.2d 761, 767–68 (Iowa 2010) (concluding the
attorney’s repeated window peeping raised serious doubt about whether
he understood the concept of privacy or had respect for privacy laws,
thus reflecting poorly on his fitness to practice law), with Iowa Supreme
Ct. Att’y Disciplinary Bd. v. Keele, 795 N.W.2d 507, 514 (Iowa 2011)
(finding the respondent’s federal gun possession conviction did not relate
to his ability to practice law). Instead, a nexus must be established in
each case between the criminal activity and the fitness to practice law.
Templeton, 784 N.W.2d at 767. The following factors are pertinent in
determining whether the criminal conduct of attorneys reflects adversely
on their fitness to practice law:
the lawyer’s mental state; the extent to which the act
demonstrates disrespect for the law or law enforcement; the
presence or absence of a victim; the extent of actual or
potential injury to a victim; and the presence or absence of a
pattern of criminal conduct.
Id. (quoting In re Conduct of White, 815 P.2d 1257, 1265 (Oregon 1991)
(en banc)).
In this case, each factor supports the conclusion that Johnson’s
criminal activity, resulting in the conviction of first-degree fraudulent
practice in violation of Iowa Code section 714.8 (2016), 2 reflected
2Johnson entered an Alford plea to fraudulent practice in the first degree in
violation of sections 714.8, 714.9, and 714.14(2). Section 714.8 establishes what
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adversely on his fitness to be a lawyer. Johnson made false entries in or
alterations to his employer’s business records by concealing deficiencies
resulting from his misconduct. See id. § 714.8(4) (providing a person is
guilty of a fraudulent practice when they “[m]ake[] any entry in or
alteration of any public records, or any records of any corporation,
partnership, or other business enterprise or nonprofit enterprise,
knowing the same to be false”). Over the course of a year, he deposited
the proceeds of automobile sales and insurance payouts belonging to his
employer into unauthorized bank accounts 3 for his own use.4
Additionally, he overpaid himself in excess of $6500. 5 His deliberate and
repeated acts resulted in the fraudulent acquisition of funds belonging to
his employer. His actions were systematic, targeted, and prolonged and
not the result of mere carelessness or misinformation. They
demonstrated a clear disrespect for Iowa law and were contrary to the
expectations, duties, and responsibilities of a legal professional.
Finally, Johnson’s criminal activity wrongfully deprived his
employer of funds and transformed his employer into a victim. He
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conduct constitutes fraudulent practice. Iowa Code § 714.8. Section 714.9 enhances
fraudulent practice to the first degree, a class “C” felony, when “the amount of money or
value of property or services involved exceeds ten thousand dollars.” Id. § 714.9.
Section 714.14(2) allows two or more fraudulent acts, attributable to a common scheme
or plan, to be combined so that the value in question is the “total value of all money,
property, and services involved.” Id. § 714.14(2).
3Johnson opened two unauthorized business accounts with Veridian Credit
Union. He named one of the accounts Saxon Motors SMQ, assumingly to make it
appear as if the account actually belonged to his employer, Saxon Motors, LC. He
named the other account Quixotica LLC, likely adding the “LLC” designation to limit the
suspicion that might accompany depositing the checks into a personal account.
4Johnson deposited three checks from insurance proceeds totaling $5905.96
and two checks from the company’s vehicle sales totaling $13,454.
5Johnson was employed as a part-time accountant with a salary of $350
per week. His authorized earnings for the duration of his employment were $23,310;
however, he paid himself $30,197.97, an excess of $6887.97.
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displayed a high disregard for honesty, morality, and trustworthiness.
Accordingly, we find Johnson violated rule 32:8.4(b).
B. 32:8.4(c). We next consider whether Johnson’s conduct
violated rule 32:8.4(c). This rule states it is professional misconduct for
an attorney to “engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation.” Iowa R. Prof’l Conduct 32:8.4(c).
The criminal act of fraudulent practice in the first degree is fraud,
which is identified specifically as misconduct under the rule. Johnson
committed this crime by knowingly making false entries in his employer’s
records to conceal deficiencies in the records in order to divert funds to
himself. Thus, while the conduct constituted criminal fraud, it also
involved dishonesty, deceit, and misrepresentation.
Rule 32:8.4(c) is broader than rule 32:8.4(b) in some respects
because it includes any conduct involving dishonesty, not just criminal
acts. 6 In this case, rule 32:84(c) not only captures the criminal conduct
engaged in by Johnson but also recognizes that the conduct also involves
specific behaviors abhorrent to the legal profession. His actions were
rooted in deception and secrecy and demonstrated an aversion to
truthful interaction with others. We find Johnson violated rule 32:8.4(c).
V. Sanction.
While Johnson has not practiced law for nearly a decade, his
dishonest and criminal conduct as an accountant now compels us to
revoke his suspended license to practice law. The stain he imposed on
the profession while he practiced law has now been darkened by his
actions as an accountant, and the time has come for the remaining
6Rule 32:8.4(b) allows us to consider acts that reflect adversely on a lawyer’s
honesty, trustworthiness, and fitness to practice law, but only in the context of their
criminal acts. See Iowa R. Prof’l Conduct 32:8.4(b). Rule 32:8.4(c) contemplates any
conduct involving fraud, deceit, or misrepresentation. See id. r. 32:8.4(c).
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thread that tethers him to the legal profession to be severed. The legal
profession is, and must always be, one of justice, honor, civility, and
service. It is a profession that requires lawyers to discharge their duties
faithfully and ethically. See Iowa Code § 602.10110. These words are
not hollow or superficial utterances for lawyers as they enter the
profession. Instead, they are the basic precepts that bind all lawyers
together and serve to sustain lawyers throughout a career. Our
profession expects no more of lawyers, but demands no less. Here,
Johnson not only gave less, his actions revealed him to be unfit to be an
Iowa lawyer. See Iowa Supreme Ct. Att’y Disciplinary Bd. v. Guthrie, 901
N.W.2d 493, 500 (Iowa 2017) (revoking attorney’s license for converting
client’s funds without a colorable future claim); Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Green, 888 N.W.2d 398, 405 (Iowa 2016) (concluding
revocation of attorney’s license to practice was the proper sanction for
his misappropriation and theft of client funds); Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Fields, 790 N.W.2d 791, 797, 799–801 (Iowa 2010)
(finding attorney’s misconduct resulting in two counts of second-degree
fraudulent practice warranted eighteen-month suspension); Iowa
Supreme Ct. Att’y Disciplinary Bd. v. Iversen, 723 N.W.2d 806, 809, 812
(Iowa 2006) (suspending attorney’s license for one year due to conduct
that resulted in a fraudulent practice conviction); Iowa Supreme Ct. Att’y
Disciplinary Bd. v. Carroll, 721 N.W.2d 788, 792 (Iowa 2006) (“[W]e [have
not] been deterred from revoking a lawyer’s license because the funds
converted were not client funds or because the attorney was not acting in
the capacity of an attorney at the time of the misconduct.”).
VI. Disposition.
Upon full consideration of this matter, we order Anthony R.
Johnson’s license to practice law be revoked effective with the filing of
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this opinion. Costs are assessed to respondent pursuant to Iowa Court
Rule 36.24.
LICENSE REVOKED.