United States v. Quiel

1 WO — 2 — — 3 — — 4 — — 5 — 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA — 8 — 9 United States of America, No. CV-21-00094-PHX-GMS 10 Plaintiff, ORDER 11 v. 12 Michael L. Quiel, 13 Defendant. — 14 — — 15 — 16 Pending before the Court is the United States of America’s (“Plaintiff”) Renewed 17 Motion for Judgment as a Matter of Law or, in the alternative, Request for New Trial 18 (Doc. 140) and Motion to Review Clerk’s Taxation of Costs (Doc. 145). For the following 19 reasons, the Court denies Plaintiff’s Renewed Motion for Judgment as a Matter of Law or, 20 in the alternative, Request for New Trial (Doc. 140) and grants Plaintiff’s Motion to 21 Review Clerk’s Taxation of Costs (Doc. 145). 22 BACKGROUND 23 The facts of this matter are set forth in the Court’s prior orders and are well known 24 to the parties. (See Doc. 64.) The Court, thus, discusses only those facts pertinent to the 25 pending motions. The uncontested evidence shows that: (1) Quiel provided the names of 26 the account holders listed on the Swiss accounts at issue, (2) Quiel sent Rusch personal 27 identifying information that is needed to make an investment in Switzerland, (3) Quiel 28 traveled to Switzerland to meet individuals Rusch scheduled for him to meet, (4) the people 1 Quiel met in Switzerland were later listed Swiss bank account documents along with Quiel, 2 and (5) Quiel sought updates on the stock’s performance in the Swiss accounts. 3 Nevertheless, there is no evidence connecting Quiel to cash wires necessary to open 4 the four Swiss accounts at issue. Quiel testified that he never sent Rusch any cash to begin 5 a Swiss venture or open Swiss bank accounts, (Doc. 137 at 64, 74, 82, 140, and 141; Trial 6 Transcript (“TT”) TT 547:5–19, 557:7–25, 565:12–19, 623:20–624:2, 624:10–25), and 7 believes he contributed stock to invest in Rusch’s Swiss fund, not his own corporate 8 accounts, (Id. at 78 and 141; TT at 561:1–5, 624:22–625:2). Although not denied, Quiel 9 did not admit that his investment/stock was deposited in the three UBS accounts and one 10 Pictet account before the Court. The jury was not presented with testimony identifying in 11 which accounts Quiel placed his stock. 12 Furthermore, representatives from UBS and Pictet stated that the external asset 13 manager or financial intermediary listed Quiel as the ultimate beneficial owner, and the 14 banks relied on the external asset manager or financial intermediary’s identification of 15 Quiel. Merely because Quiel was listed on the ultimate beneficial owner of the account 16 does not mean that he was so. (Doc. 136 at 32, 35, 58-60 and 91-92; TT 263:9–13, 266:5– 17 8, 289:25–291:16, 322:21–323:2.) Neither Pierre Gabris, Daniel Noser, nor Arno Arndt 18 testified at trial. Quiel affirmatively denied that he was the beneficial owner of those 19 accounts. (Doc. 137 at 158; TT 641:4–10, 16–22.) Testimony was admitted at trial upon 20 which a reasonable jury could have rejected some or all of Rusch’s testimony. 21 A jury verdict (Doc. 128) and judgment (Doc. 129) was entered in favor of 22 Defendant Michael Quiel on January 12, 2024. Defendant filed a Bill of Costs (Doc. 132) 23 seeking $5,104.61 on January 23, 2024. Plaintiff did not file an objection. (Doc. 139 at 1.) 24 The Clerk of Court assessed costs in favor of Defendant and against Plaintiff in the amount 25 of $4,488.90 on February 9, 2024. (Doc. 139 at 2.) The same day, Plaintiff filed a Renewed 26 Motion for Judgment as a Matter of Law or, in the alternative, Request for New Trial 27 (Doc. 140). Plaintiff then filed a Motion to Review Clerk’s Taxation of Costs (Doc. 145) 28 on February 16, 2024. 1 DISCUSSION 2 I. Legal Standard 3 A. Renewed Motion for Judgment as a Matter of Law 4 A party may move for judgment as a matter of law under Federal Rule of Civil 5 Procedure 50(a) before a case is submitted to the jury. A Rule 50(a) motion for judgment 6 as a matter of law must “specify the judgment sought and the law and facts that entitle the 7 movant to the judgment.” Fed. R. Civ. P. 50(a)(2). 8 A party may renew a motion for judgment as a matter of law under Rule 50(b) no 9 later than 28 days after the entry of judgment in a jury trial. Fed. R. Civ. P. 50(b). A “party 10 cannot raise arguments in its post-trial motion for judgment as a matter of law under Rule 11 50(b) that it did not raise in its pre-verdict Rule 50(a) motion.” OTR Wheel Eng’g, Inc. v. 12 W. Worldwide Servs., Inc., 897 F.3d 1008, 1016 (9th Cir. 2018) (quoting Freund v. 13 Nycomed Amersham, 347 F.3d 752, 761 (9th Cir. 2003)). 14 The test on a Rule 50(b) motion is whether “the evidence, construed in the light 15 most favorable to the nonmoving party, permits only one reasonable conclusion, and that 16 conclusion is contrary to that of the jury.” Estate of Diaz v. City of Anaheim, 840 F.3d 592 , 17 604 (9th Cir. 2016) (quoting White v. Ford Motor Co., 312 F.3d 998, 1010 (9th Cir. 2002), 18 amended on denial of reh’g, 335 F.3d 833 (9th Cir. 2003)). In considering a Rule 50(b) 19 motion, the court “must view the evidence in the light most favorable to the nonmoving 20 party . . . and draw all reasonable inferences in that party’s favor.” Colony Cove Props., 21 LLC v. City of Carson, 888 F.3d 445, 450 (9th Cir. 2018) (alternation in original) (quoting 22 Ostad v. Or. Health Scis. Univ., 327 F.3d 876 , 881 (9th Cir. 2003)). In ruling on a Rule 23 50(b) motion, the court may (1) allow judgment on the verdict; (2) order a new trial; or 24 (3) direct the entry of judgment as a matter of law. Fed. R. Civ. P. 50(b). 25 B. Request for a New Trial 26 The court may grant a new trial only if the verdict is contrary to the clear weight of 27 the evidence or “it is quite clear that the jury has reached a seriously erroneous result.” 28 Venegas v. Wagner, 831 F.2d 1514, 1519 (9th Cir. 1987). On a Rule 59 motion, “the 1 district court can weigh the evidence, make credibility determinations, and grant a new trial 2 for any reason necessary to prevent a miscarriage of justice.” Experience Hendrix L.L.C. 3 v. Hendrixlicensing.com Ltd., 762 F.3d 829, 841 (9th Cir. 2014). “Unlike with a Rule 50 4 determination, the district court, in considering a Rule 59 motion for a new trial, is not 5 required to view the trial evidence in the light most favorable to the verdict.” Id. 6 II. Analysis 7 A. Renewed Motion for Judgment as a Matter of Law 8 During trial, Plaintiff orally moved for judgment as a matter of law pursuant to 9 Federal Rule of Civil Procedure 50(a). (Doc. 137 at 172; TT 655:2–4.) Plaintiff based its 10 motion on the following grounds: (1) Defendant admitted that he owned the stock in the 11 Swiss accounts, (2) the “account records identify [Defendant] as the beneficial owner,” and 12 (3) [a]ll of the accounts were in the name of an entity that was acting on [Defendant’s] 13 behalf with respect to the assets in the account . . . ,” and (4) Defendant exercised other 14 authority over the accounts. (Id. at 172, 174, 191; TT 655:5–16, 657:3–5, 674:11–14.) 15 Thus, according to Plaintiff, evidence established that Defendant had a financial interest in 16 all four Swiss accounts. (Id. at 172; TT 655:5–6.) 17 It is not contested that Quiel held valuable stocks in the Swiss accounts, and at least 18 some of the accounts themselves listed Quiel as the beneficial owner. Nevertheless, the 19 Court denied the motion. (Doc. 119; Doc. 137 at 190-192; TT 673:21–675:1.) It did so 20 because “whether or not the corporations were acting as a nominee of Quiel or whether 21 they were off on some sort of tear from Rusch remained an issue of fact.” (Doc. 137 at 22 190-191; TT 673:21–674:2.) Alternatively, whether Quiel could exercise power over an 23 account by communication directly with the bank, “either directly or through an agent, 24 nominee, attorney or some other capacity on behalf of” Quiel also remained an issue of 25 fact. See (Doc. 140-19 at 8; Doc. 137 at 173-175; TT 656:22–658:20.) Likewise, whether 26 Defendant exercised other authority remained a disputed issue of fact. (Doc. 137 at 191; 27 TT 674:11–25.) 28 Now, in Plaintiff’s Rule 50(b) renewed motion for judgment as a matter of law, 1 Plaintiff argues that the trial evidence shows (1) Defendant had a financial interest in the 2 Swiss accounts and (2) willfully failed to record his financial interest on the Report of 3 Foreign Bank and Financial Accounts (“FBAR”). (Doc. 140 at 3–12.) Again, Plaintiff 4 relies on the “nominee” or “in some other capacity” standard. (Doc. 140 at 3.) 5 Without any new argument or changed circumstances, the Court’s reasoning for 6 denying Plaintiff’s Rule 50(a) motion remains the same. There remains a basis in the 7 evidence upon which a reasonable jury could find that Rusch did not set up the accounts 8 for Quiel and merely falsely identified Quiel as the nominal owner. As such, Plaintiff Rule 9 50(b) motion is denied. And because the Court finds that a reasonable basis existed for the 10 jury to conclude that Defendant did not have a financial interest in a foreign financial 11 account in Switzerland during 2007 and 2008, the Court does not address Plaintiff’s 12 willfulness argument. 13 B. Request for a New Trial 14 Plaintiff requests the Court to grant a new trial because (1) “under the doctrine of 15 collateral estoppel, or issue preclusion, Quiel’s prior conviction for willfully filing false 16 tax returns establishes . . . that Quiel had a financial interest in at least one of the accounts 17 at issue; (2) Swiss account holders were Defendant’s nominees or acted in some other 18 capacity on behalf of Quiel; and (3) “the evidence at trial [] made clear that Quiel had 19 [other] authority over the Swiss accounts. (Doc. 140 at 3, 12–14.) 20 First, the Court previously ruled on Plaintiff’s collateral estoppel and issue 21 preclusion argument finding that Defendant’s conviction does not preclude Quiel from 22 denying he had a financial interest in any one or more of the several Swiss accounts. See 23 (Doc. 64 at 7–10.) Thus, the Court’s analysis in the order denying summary judgment 24 remains the same. For the evidence to clearly weigh in favor of the Plaintiff, the Plaintiff 25 would have to establish evidence that establishes a prima facie case against the Defendant. 26 Plaintiff did not introduce sufficient evidence showing the specific amounts of Quiel stock 27 in the various Swiss accounts, nor did it establish which one or more, if any of the accounts, 28 over which Quiel had control. 1 Second, the clear weight of the evidence does not show that Quiel had a financial 2 interest in, or other authority over, the Swiss accounts. While there is uncontested evidence 3 that leans in favor of Plaintiff’s theory, the jury was also presented evidence that supports 4 Defendant’s testimony that he (1) made an investment in Rusch’s investment accounts and 5 (2) does not have a financial interest in UBS accounts ending in -9732, -1090, or -2363, 6 nor the Pictet account ending in -2625. 7 1. On October 2, 2006, Rusch emailed Quiel a reminder regarding 8 Rusch’s “current intentions and Switzerland” and desire to use a 9 “bank and management company . . . [that] require[s] a minimum 10 account balance of $500,000 . . . per account.” Rusch also stated if it 11 was unacceptable “to keep this amount of money in the Swiss 12 bank . . . , I have “other sources.” (Tr. Ex. 34.) Quiel did not send 13 Rusch $500,000. (Doc. 137 at 64; TT 547:5–19.) 14 2. On October 12, 2006, Rusch email Quiel and Kerr stating “I pay all 15 the costs of incorporation, first year maintenance, etc. . . .” (Tr. Ex. 16 36.) Another email requests Quiel and Kerr to “wire in the corporate 17 capital of $50,000 CHF . . . .” (Tr. Ex. 37.) 18 3. On October 23, 2006, Rusch emailed Quiel and Kerr “to wire the 19 corporate capital of $100,000 CHF” and $500,000 USD to a Pictet 20 account. (Tr. Ex. 39.) Quiel did not wire any money, nor did Quiel 21 direct anyone to wire the funds on his behalf. (Doc. 137 at 73-74, 77; 22 TT 556:21–557:25, 560:21–23.) Quiel never sent “any large deposits 23 to UBS.” (Doc. 137 at 140-141;TT 623:2–624:2.) 24 4. On October 24, 2006, Rusch emailed Quiel and Kerr: “The corporate 25 accounts are open at UBS. Please wire $100,000 CHF in to each so 26 that we can complete the incorporation.” (Tr. Ex. 40.) Quiel did not 27 “wire any money into Switzerland.” (Doc. 137 at 79; TT 565:2–15.) 28 Quiel never wired money to UBS. (Doc. 137 at 141; TT 624:6–15.) 1 5. Quiel emailed his passport to Rusch because it was “common 2 practice” when making an investment. It was part of the “know your 3 customer” rule. (Doc. 137 at 143-144; TT 626:10–627:5.) 4 6. While Quiel was in Switzerland, he did not review banking or 5 brokerage accounts, (Id. at 92-93; TT 575:18–576:7), open any 6 accounts, (Id. at 93, 149; TT 576:18–19, 632:15–25), or sign corporate 7 documents, (Id. at 88; TT 571:5–17.) 8 7. The UBS account ending in -1090 received 100,000 Swiss francs from 9 another bank account. The account also listed Quiel as the ultimate 10 beneficial owner but did not list any of Quiel’s children as required. 11 (Doc. 136 at 92; TT 323:3–24, Tr. Ex. 57.) 12 8. The UBS account ending in -9372 opening deposit was 100,000 CHF. 13 (Tr. Ex. 58.) 14 9. The UBS account ending in -2363 shows that the first deposit into the 15 account was 750,000 Swiss francs from Cyril Capital, LLC. (Tr. Ex. 16 59.) 17 10. Antoine Salamolard, Pictet representative, testified that the “ultimate 18 beneficial owner has absolutely no access to the account . . . and 19 [Pictet has] no direct relationship with this person.” (Doc. 135 at 217; 20 TT 217:20–22.) While Quiel was “identified as the UBO, . . . a 21 fiduciary intermediary could submit a copy of anyone’s passport and 22 open an account,” including a juror’s passport. (Doc. 136 at 41-42; 23 TT 272:4–273:8.) 24 There is no evidence directly connecting Quiel to cash wires necessary to open the 25 four Swiss accounts at issue, that a jury would have to accept. Quiel testified that he never 26 sent Rusch any cash to begin a Swiss venture or open Swiss bank accounts, (Doc. 137 at 27 64, 74, 82, 140-141; TT 547:5–19, 557:7–25, 565:12–19, 623:20–624:2, 624:10–25), and 28 believes he contributed stock to invest in Rusch’s Swiss fund, not his own corporate 1 accounts. (Id.at 78, 141; TT 561:1–5, 624:22–25). Although not denied, Quiel did not 2 admit that his investment/stock was deposited in the three UBS accounts and one Pictet 3 account before the Court. The jury was not presented with testimony identifying in which 4 accounts Quiel placed his stock. 5 Furthermore, representatives from UBS and Pictet stated that the external asset 6 manager or financial intermediary listed Quiel as the ultimate beneficial owner, and the 7 banks relied on the external asset manager or financial intermediary’s identification of 8 Quiel. (Doc. 136 at 32, 35, 58-60, 91-92; TT 263:9–13, 266:5–8, 289:25–291:16, 322:21– 9 323:2.) Neither Pierre Gabris, Daniel Noser, nor Arno Arndt testified at trial. Quiel 10 affirmatively denied that he was the beneficial owner of those accounts. (Doc. 137 at 158; 11 TT 641:4–10, 16–22.) 12 Thus, this Court cannot conclude that the verdict is contrary to the clear weight of 13 the evidence. 14 III. Bill of Costs 15 A. Legal Standard 16 Federal Rule of Civil Procedure 54(d)(1) provides that “costs—other than attorney’s 17 fees—should be allowed to the prevailing party.” Fed. R. Civ. P. 54(d)(1). “By its terms, 18 the rule creates a presumption in favor of awarding costs to a prevailing party, but vests in 19 the district court discretion to refuse to award costs.” Ass’n of Mexican-Am. Educators v. 20 California, 231 F.3d 572 , 591 (9th Cir. 2000). Nevertheless, the Ninth Circuit has 21 recognized appropriate reasons for denying costs: “(1) the substantial public importance of 22 the case, (2) the closeness and difficulty of the issues in the case, (3) the chilling effect on 23 future similar actions, (4) the plaintiff’s limited financial resources, and (5) the economic 24 disparity between the parties.” Escriba v. Foster Poultry Farms, Inc., 743 F.3d 1236 , 25 1247–48 (9th Cir. 2014). The Escriba factors are “not ‘an exhaustive list of ‘good reasons’ 26 for declining to award costs’ but rather a starting point for analysis.” Id. at 1248 (quoting 27 Mexican-Am. Educators, 231 F.3d at 593). “[A] losing party need not demonstrate that all 28 five factors weigh against imposing costs” for the district court to properly deny costs to || the prevailing party. Draper v. Rosario, 836 F.3d 1072, 1087 (9th Cir. 2016). 2 B. Analysis 3 Plaintiff admits that factors three, four, and five of the Escriba factors are neutral, (Doc. 149 at 6), and Defendant does not address the issue, (Doc. 148). Regarding factor 5|| one, “there is undoubtedly a strong public interest in favor of the United States’s prompt 6|| collection of outstanding debts.” United States v. Kotzev, No. 1:18-CV-1409, 2022 WL 706949 , at *3 (E.D. Va. Mar. 9, 2022). Furthermore, this case presented difficult questions 8 || of fact, required close attention to detail, required the jury to make many credibility || judgments, and created language barriers with international witnesses and bank documents 10 || written in a foreign language. “Surviving summary judgment, though not determinative, is also evidence of a close and difficult issue.” Fox v. Arizona, No. CV-21-01089-PHX12} MTL, 2024 WL 1344449 , at *2 (D. Ariz. Mar. 28, 2024) 13 Therefore, in its discretion the Court finds that parties shall bear their own costs. 14 CONCLUSION 15 Accordingly, 16 IT IS THEREFORE ORDERED that Plaintiff's Renewed Motion for Judgment 17 || as a Matter of Law or, in the alternative, Request for New Trial (Doc. 140) is denied. 18 IT IS FURTHER ORDERED that Plaintiff's Motion to Review Clerk’s Taxation of Costs (Doc. 145) is granted. 20 IT IS FURTHER ORDERED that the Bill of Costs (Doc. 132) be modified to show an award of $0.00 in costs against Plaintiff and for Defendant. 22 Dated this 23rd day of August, 2024. 23 W 24 A Whacrsay Sooo) 25 Chief United States District Judge — 26 — — 27 — — 28 — -9-