White-Collar Crime

Lawyer Convicted of Hiding Bankruptcy Asset for Girlfriend Despite Defense Claim He's Not a 'Moron'

  • Print.

A Wisconsin lawyer and a former client who is now his girlfriend were found guilty in federal court there on Wednesday of crimes related to her bankruptcy.

Walter Stern III, did not represent Norma Leonard-Allen in the bankruptcy case and claimed he was unaware of it at the time even though he was by then involved with his former client. However, he was charged and convicted of money laundering for helping Leonard-Allen conceal a $95,000 marital settlement she received in 2005 while the case was ongoing, reports the Journal Sentinel.

Stern’s defense counsel, Gerald Boyle, argued that his client, who is now 66, would have had to have been a “moron” to leave a paper trail by putting $60,000 of the settlement into certificates of deposit in his name, as Stern did, calling the claimed money-laundering conspiracy one that “[m]aybe two 17-year-old dope smokers would commit.”

Leonard-Allen, who is now 65, initially was granted immunity to testify about Stern before a grand jury. But she was charged afterward in the Eastern District of Wisconsin when the government said she lied under oath to the grand jury about his involvement, claiming that Stern didn’t refer her to a bankruptcy lawyer. On an intake form, however, Leonard-Allen had written that she was referred by Stern, the newspaper recounts.

Following a three-day trial, she was convicted Wednesday of lying under oath. Leonard-Allen was previously convicted in 2010 of bankruptcy fraud and sentenced to three years of probation.

Sentencing on the new convictions is scheduled for September.

Give us feedback, share a story tip or update, or report an error.