Case Title: Office of Lawyer Regulation v. Walter W. Stern, III

Citation: 2013 WI 46

Docket Number: 

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2013-05-21T00:00:00Z

Document:
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, 
 
          Complainant, 
 
     v. 
 
Walter W. Stern, III, 
 
          Respondent. 
 
FILED 
 
MAY 21, 2013 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
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   
 
2 
 
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." 
No. 
2013AP149-D   
 
3 
 
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.  
No. 
2013AP149-D   
 
4 
 
¶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 
No. 
2013AP149-D   
 
5 
 
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; . . . ." 
No. 
2013AP149-D   
 
6 
 
¶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. 
No. 
2013AP149-D   
 
7 
 
¶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).