Lawyer's money laundering conviction is overturned because of excluded testimony

A federal appeals court has overturned the money laundering conviction of a Kenosha, Wis., lawyer accused of hiding assets in his girlfriend’s bankruptcy.

The Chicago-based 7th U.S. Circuit Court of Appeals cited error in the trial of the lawyer, Walter Stern III, according to the Milwaukee Journal Sentinel blog Proof & Hearsay. The July 30 opinion (PDF) said Stern should have been allowed to testify about why he bought certificates of deposit with money his girlfriend had received in a marital settlement. The trial court had excluded the testimony as hearsay.

“Because the trial court wrongly prevented Stern from testifying about his own conduct—testimony central to Stern’s defense that he did not intend to conceal assets—we reverse Stern’s conviction,” the court said.

The court said Stern’s statements about why he went to the bank to purchase the CDs were not hearsay, even if he repeated what his girlfriend had told him about why he should do so. The statements weren’t being introduced to prove the truth of the girlfriend’s statements, the court said. Rather they were being introduced to explain his thinking and motivation at the time.

Stern 67, was sentenced to a year and a day in prison after his conviction last year, according to the Journal Sentinel. His law license has been suspended for two years.

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