A federal judge has sentenced a Greenfield-based lawyer to four years in federal prison and five years of supervised release for stealing millions from clients.
A sentencing memorandum filed Tuesday in the case of US v. Sarah E.K. Laux contends that the defendant, “abused her privileged position as a fiduciary to swindle two elderly clients who were on their deathbeds — as well as their families — out of more than $2.2 million.” It also states that Laux took part in three different fraud schemes and that she used money she obtained to buy a house in Mequon and an insurance company, among other things.
At the same time, the memo states that the Laux case is “about an attorney who, after being confronted with evidence of her fraud scheme, engaged in extraordinary acceptance of responsibility by cooperating — and securing her non-defendant husband’s cooperation — in asset disclosure, asset forfeiture, and restitution matters.”
The judge overseeing the case, Charles Clevert of the Federal Court for the Eastern District of Wisconsin, has also indicated he will order Laux to pay nearly $2.1 million in restitution in the case, an amount consistent with a stipulation federal prosecutors had filed Monday.
Defense attorneys argued the damage to Laux’s career and reputation served as punishment.
Laux was indicted in December 2014 on 33 criminal charges, including 20 counts of money laundering and nine counts of wire fraud. She pleaded guilty in October to five of the charges – one count each of bank fraud, mail fraud, money laundering and filing a false tax return.
Laux was the subject of an FBI and IRS investigation into her law practice, in which she provided trust and estate planning.
The Wisconsin Supreme Court revoked her license to practice law in June and ordered her to pay any restitution the federal court had ordered, in addition to $626,515 in restitution to several of her clients. The discipline mainly stemmed from complaints from attorneys who had worked with Laux. Additionally, the Office of Lawyer Regulation filed a complaint in October 2014, alleging Laux had committed 23 instances of misconduct.
A lawsuit filed in Milwaukee County, meanwhile, alleges Laux misappropriated more than $1.6 million from a trust account and committed fraud, theft and conspiracy, among other things.
Laux’s insurance license was also revoked in January 2014. The state insurance commissioner’s office ordered her to pay more than $584,000 in restitution to a client, $60,000 in forfeitures that represents the money she is suspected of profiting from after stealing from that client, and $32,000 for violating 32 insurance laws. Follow @TDR_WLJDan