2013 WI 46
SUPREME COURT OF WISCONSIN
CASE NO.: 2013AP149-D
COMPLETE TITLE: In the Matter of Disciplinary Proceedings
Against Walter W. Stern, III, Attorney at Law:
Office of Lawyer Regulation,
Complainant,
v.
Walter W. Stern, III,
Respondent.
DISCIPLINARY PROCEEDINGS AGAINST STERN
OPINION FILED: May 21, 2013
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:
SOURCE OF APPEAL:
COURT:
COUNTY:
JUDGE:
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
2013 WI 46
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2013AP149-D
STATE OF WISCONSIN : IN SUPREME COURT
In the Matter of Disciplinary Proceedings
Against Walter W. Stern, III, Attorney at Law:
Office of Lawyer Regulation, FILED
Complainant,
MAY 21, 2013
v.
Diane M. Fremgen
Clerk of Supreme Court
Walter W. Stern, III,
Respondent.
ATTORNEY disciplinary proceeding. Attorney's license
suspended.
¶1 PER CURIAM. We review, pursuant to SCR 22.17(2),1 the
report of the referee, Richard C. Ninneman, recommending the
1
SCR 22.17(2) states:
If no appeal is filed timely, the supreme court
shall review the referee's report; adopt, reject or
modify the referee's findings and conclusions or
remand the matter to the referee for additional
findings; and determine and impose appropriate
No. 2013AP149-D
court suspend Attorney Walter W. Stern, III's license to
practice law for a period of two years for professional
misconduct resulting in his federal criminal conviction for
conspiring to commit money laundering in violation of 18 U.S.C.
§ 1956(h).2 No appeal has been filed.
¶2 We approve and adopt the referee's findings of fact
and conclusions of law. We conclude that the seriousness of
Attorney Stern's misconduct warrants a two-year license
suspension. The Office of Lawyer Regulation (OLR) does not seek
costs. No costs will be imposed.
¶3 Attorney Stern has been licensed to practice law in
Wisconsin since 1974. He has been subject to a number of
previous disciplinary proceedings. In August of 1988, the Board
of Attorneys Professional Responsibility (BAPR), the predecessor
to the OLR, imposed a private reprimand on Attorney Stern for
professional misconduct consisting of communicating on the
subject of the representation with a party he knew to be
represented by a lawyer without the consent of the lawyer. In
September of 1992, BAPR publicly reprimanded Attorney Stern for
professional misconduct consisting of advancing a factual
position without a basis; failing to maintain the respect due
discipline. The court, on its own motion, may order
the parties to file briefs in the matter.
2
Title 18 U.S.C. § 1956(h) states: "Any person who
conspires to commit any offense defined in this section or
section 1957 shall be subject to the same penalties as those
prescribed for the offense the commission of which was the
object of the conspiracy."
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No. 2013AP149-D
courts of justice and judicial officers; violating the
Attorney's Oath; and engaging in offensive personality. Public
Reprimand of Walter W. Stern III, No. 1992-11. In November of
1993, Attorney Stern consented to a private reprimand for
professional misconduct consisting of failing to pay a third-
party lien from settlement proceeds after receiving notice of
the lien. BAPR Private Reprimand, No. 1993-25. In March of
2008, Attorney Stern consented to a private reprimand for
professional misconduct consisting of committing criminal acts
that reflected adversely on his honesty, trustworthiness, or
fitness as a lawyer. The discipline was a result of Attorney
Stern pleading no contest to a second and third offense of
Operating a Motor Vehicle While Under the Influence. OLR
Private Reprimand, No. 2008-08.
¶4 The disciplinary complaint now before us involves
allegations that Attorney Stern engaged in money laundering in
connection with funds received by a party, N.L.A., pursuant to a
marital settlement agreement (MSA). On or about June 1, 2005,
N.L.A. and her then-husband entered into an MSA under which
N.L.A. was to receive $95,000. On or about June 22, 2005,
N.L.A.'s divorce attorney deposited $29,000 toward the MSA in a
trust account.
¶5 Attorney Stern was acquainted with N.L.A. and referred
her to a bankruptcy attorney. On or about September 30, 2005,
N.L.A. filed a Chapter 7 bankruptcy petition. N.L.A. concealed
the MSA and the funds received and due under the MSA from her
bankruptcy attorney.
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No. 2013AP149-D
¶6 In October of 2005, N.L.A.'s divorce attorney received
a second MSA payment of $20,000.
¶7 On or about January 14, 2006, the bankruptcy court
determined N.L.A.'s petition to be a no-asset case and
discharged her debts.
¶8 On or about January 17, 2006, N.L.A.'s divorce
attorney received a third MSA payment of $20,000.
¶9 On or about March 3, 2006, N.L.A. gave the funds from
the three MSA payments to Attorney Stern. Attorney Stern then
purchased a certificate of deposit (CD) from a bank in his own
name, with the proceeds going to N.L.A. upon his death.
¶10 In April of 2006, N.L.A. received a fourth MSA payment
of $26,000.
¶11 In January of 2007, Attorney Stern used the proceeds
from the March 2006 CD and the fourth MSA payment to purchase
another CD, also in his name, payable to N.L.A. upon his death.
¶12 On December 20, 2011, a federal grand jury indicted
Attorney Stern for violating 18 U.S.C. § 1956(h) by knowingly
conspiring with N.L.A. to commit money laundering to conceal the
$95,000 N.L.A. received, thereby committing bankruptcy fraud.
¶13 On June 20, 2012, a federal jury found Attorney Stern
guilty of the money laundering charge. On January 9, 2013,
Attorney Stern was sentenced to federal prison for one year and
one day.
¶14 On January 22, 2013, the OLR filed a complaint
alleging that by engaging in conduct resulting in his federal
criminal conviction for conspiring to commit money laundering in
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No. 2013AP149-D
violation of 18 U.S.C. § 1956(h), Attorney Stern committed a
criminal act that reflected adversely on his honesty,
trustworthiness, or fitness as a lawyer in other respects,
contrary to SCR 20:8.4(b)3 and engaged in conduct involving
dishonesty, fraud, deceit, or misrepresentation, contrary to
SCR 20:8.4(c).4
¶15 On February 4, 2013, the parties filed a stipulation
and no contest plea agreement whereby Attorney Stern pled no
contest to the misconduct alleged in the complaint. Attorney
Stern agreed that the referee could use the allegations of the
complaint as an adequate factual basis for a determination of
misconduct and for the discipline requested. Attorney Stern
further agreed that it would be appropriate for this court to
impose the level of discipline sought by the OLR Director,
namely, a two-year suspension of Attorney Stern's license to
practice law in Wisconsin. The parties requested that the
referee approve the stipulation and file a report finding facts
and misconduct consistent with the stipulation and recommending
that Attorney Stern's license to practice law be suspended for
two years.
3
SCR 20:8.4(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; . . . ."
4
SCR 20:8.4(c) states it is professional misconduct for a
lawyer to "engage in conduct involving dishonesty, fraud, deceit
or misrepresentation; . . . ."
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No. 2013AP149-D
¶16 On February 20, 2013, the referee filed his findings
of fact, conclusions of law, and recommendation in which he
adopted the parties' stipulated findings of fact; found that the
OLR had proven by clear, satisfactory, and convincing evidence
that Attorney Stern violated SCRs 20:8.4(b) and (c); and
recommended that Attorney Stern's license to practice law be
suspended for two years. No appeal was filed from the referee's
report and recommendation.
¶17 This court will affirm a referee's findings of fact
unless they are clearly erroneous, but conclusions of law are
reviewed de novo. See In re Disciplinary Proceedings Against
Eisenberg, 2004 WI 14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747. This
court is free to impose whatever discipline it deems
appropriate, regardless of the referee's recommendation. See In
re Disciplinary Proceedings Against Widule, 2003 WI 34, ¶44, 261
Wis. 2d 45, 660 N.W.2d 686.
¶18 We adopt the referee's findings of fact and
conclusions of law and determine that a two-year suspension is
the appropriate discipline for Attorney Stern's professional
misconduct. The actions that led to Attorney Stern's federal
conviction of conspiring to commit money laundering are serious
failings that warrant a significant level of discipline.
¶19 As to costs, the OLR states that Attorney Stern's
prompt entry into a comprehensive stipulation avoided
expenditure of any significant amount of lawyer regulation
system resources. Consistent with the OLR's recommendation, no
costs will be imposed.
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No. 2013AP149-D
¶20 IT IS ORDERED that the license of Walter W. Stern,
III, to practice law in Wisconsin is suspended for a period of
two years, effective the date of this order.
¶21 IT IS FURTHER ORDERED that Walter W. Stern, III, shall
comply with the provisions of SCR 22.26 concerning the duties of
an attorney whose license to practice law has been suspended.
¶22 IT IS FURTHER ORDERED that compliance with all
conditions of this order is required for reinstatement. See
SCR 22.29(4)(c).
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