Milwaukee, Wisconsin
A federal judge this week sentenced a 35-year-old attorney to four years in prison for stealing more than $2 million from clients and filing a false tax return, officials announced.
U.S. District Judge Charles N. Clevert Jr. sentenced Sarah E.K. Laux a/k/a “Sarah Kitzke,” of Mequon, Wisconsin, for bank fraud, wire fraud, mail fraud, money laundering, and tax fraud.
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.
The Court ordered Laux to forfeit $2,072,276 and 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.
The indictment states that between 2010 and 2012, Laux engaged in a scheme to defraud her client by gaining access to his money and then, through misrepresentations and false pretenses, converting more than $1.6 million of their money to her own use.
The judge also stated that it will soon enter an order requiring Laux to pay full restitution to the victims of her crimes of conviction.
In addition, the judge 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.
Also Laux also defrauded Associated Bank, N.A., and its subsidiary Associated Trust, N.A., which served as trustee of a trust for one of her clients.
She lied and said client Carleen Guenther needed a distribution from the trust to buy a condominium in a retirement home. The financial institutions to distribute the $450,000 for that purpose and Laux used the $450,000 for her own use.
Laux then prepared falsified documents and submitted it to the Associated Trust and Associated Bank to conceal her crimes.
During 2013, Laux defrauded two other estate-planning clients, a husband and wife, by embezzling approximately $584,000 of their investment monies and used the money to buy annuities.
According to the indictment, Laux engaged in money laundering transactions.
She also filed 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 plead 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.