Dorota Dyman & Associates Real Estate - A Davenport real estate lawyer who was convicted of helping buyers fraudulently secure inflated loans before the 2008 housing crash will lose his ability to practice law, the Iowa Supreme Court decided Friday.
The court revoked the law license of Marc Engelmann, saying his conduct caused large financial losses to lenders even if it did not enrich him. Engelmann, 62, is serving a three-year prison term after a federal jury convicted him in 2011 of wire fraud, bank fraud and conspiracy.
Engelmann represented a seller in nine different sales of residential properties to the same two buyers. In each transaction, Engelmann filed official forms that overstated the actual sales price by $30,000. The inflated price deceived lenders, who approved loans for the buyers that were larger than the actual prices. The seller received the higher price gave a $30,000 kickback to the buyers at closing. The buyers defaulted on the home loans after the 2008 market crash, causing a loss to the lenders of $393,000.
Engelmann testified that he believed it was appropriate, if unusual, for the deals to be structured with a "cash refund" to the buyers, and he denied committing fraud. But the high court rejected that argument Friday, as the jury did in 2011. A federal appeals court also has upheld his convictions.
Justice Thomas Waterman said Engelmann made repeated misrepresentations that deceived lenders. As a sophisticated real estate attorney, Engelmann knew or should have known that the deals were unethical and refused to take part, he wrote.
Engelmann collected only a $350 fee for each closing and did not otherwise benefit from the fraud. But Waterman said the crime nonetheless forced banks to suffer great losses.
Engelmann had practiced law since 1976 with an unblemished disciplinary record, handling thousands of real estate transactions in the Quad-City area of eastern Iowa and western Illinois. He is incarcerated at a prison in Terre Haute, Ind., with a projected release date of Oct. 14, 2014, according to the Federal Bureau of Prisons.
His attorney, David Treimer, did not immediately return a message seeking comment.