Date: 02-03-2016

Case Style: United States of America v. Sarah E.K. Laux a/k/a “Sarah Kitzke”

Case Number: 2:14-cr-00229-CNC

Judge: Charles N. Clevert, Jr.

Court: United States District Court for the Eastern District of Wisconsin (Milwaukee County)

Plaintiff's Attorney: Scott J. Campbell

Defendant's Attorney: Mike Fitzgerald

Description: Milwaukee, WI - Milwaukee-Area Attorney Sentenced to Four Years in Prison for Defrauding Financial Institutions and Clients, Money Laundering, and Filing a False Tax Return

Sarah E.K. Laux a/k/a “Sarah Kitzke” (age 35) of Mequon, Wisconsin, was sentenced before Judge Charles N. Clevert, Jr. on charges of bank fraud, wire fraud, mail fraud, money laundering, and tax fraud. Laux was sentenced to 48 months in federal prison and was ordered to serve five years on supervised release.

The Court ordered Laux to pay a forfeiture of $2,072,276.48 and forfeited Laux’s interests in other properties, including her interests in her Mequon residence, another parcel of real property in Mequon, a Las Vegas timeshare property, $5,000 in currency, seven jewelry items, and two insurance businesses.

At sentencing, the Court also stated that it will soon enter an order requiring Laux to pay full restitution to the victims of her crimes of conviction, and will order Laux to repay the Internal Revenue Service all back taxes, penalties, and interest arising from her filing of a false 2010 personal income tax return in which she failed to report $200,000 in income.

Sarah E.K. Laux was indicted in December 2014 with defrauding four different clients – an entity and three individuals – to whom Laux had provided trust and estates advice and to whose funds Laux gained access through her solo-practice law firm. Laux defrauded those clients out of more than $2.2 million in funds that Laux then converted to her own use.

As set forth in the indictment, between 2010 and 2012, Laux engaged in a scheme to defraud his client by gaining access to their money and then, through misrepresentations and false pretenses, converting more than $1.6 million of their money to her own use. Laux used that money to buy residential real property and an insurance business and to pay Laux’s personal bills and bills of Laux’s law firm, Laux Law, LLC.

As also set forth in the indictment, Laux also defrauded Associated Bank, N.A., and its subsidiary Associated Trust, N.A., which served as trustee of a trust of which the previously mentioned client was a beneficiary, by falsely representing to those financial institutions that Carleen Guenther needed a distribution from the trust to buy a condominium in a retirement home; causing those financial institutions to distribute the $450,000 for that purpose; and then converting the $450,000 to her own use. Laux then prepared falsified documents and presented those falsified documents, and made false statements, to Associated Trust and Associated Bank to conceal that Laux had fraudulently converted the $450,000 in distributions from the trust to Laux’s own use.

In addition, during 2013, Laux defrauded two other estate-planning clients, a husband and wife, by embezzling approximately $584,000 of their investment monies after having promised to use their money to buy annuities.

According to the indictment, using the proceeds of these various fraud schemes, Laux engaged in money laundering transactions. She also filed a materially false and fraudulent personal income tax return for tax year 2010. Laux falsely stated that her and her husband’s income for 2010 was $104,249, when in fact the amount was in excess of that amount.

On October 6, 2015, Laux pleaded guilty to five counts of the 33-count indictment. Those counts charged her with bank fraud, wire fraud, mail fraud, money laundering, and filing a false tax return.

The case was investigated by Special Agents of the IRS Criminal Investigation and the Federal Bureau of Investigation.

Outcome: Laux was sentenced to 48 months in federal prison and was ordered to serve five years on supervised release. The Court also ordered Laux to pay a forfeiture of $2,072,276.48 and forfeited Laux’s interests in other properties, including her interests in her Mequon residence, another parcel of real property in Mequon, a Las Vegas timeshare property, $5,000 in currency, seven jewelry items, and two insurance businesses.

Plaintiff's Experts:

Defendant's Experts:

Comments: