By Ron Lee
Judge James A. Teilborg
“The Court has carefully considered the filings of the parties as well as today’s hearing and the court finds for purposes of sentencing these defendants that the Government has failed to carry its burden of proof by a preponderance of the evidence, much less by clear and convincing evidence, that the tax loss exceeds zero.” – The Honorable James A. Teilborg, Judge
Phoenix, Arizona – It is unusual for a reporter to start a story simply quoting the trial court verbatim, but the ruling is the story. This was the sentencing in US v. Kerr and Quiel following a six-week long trial in Phoenix, Arizona where the defendants were charged with Income Tax Crimes, facing 35 years in prison for international tax conspiracies. The story ends with a finding that the Government did not prove beyond a preponderance that a tax debt was due and owing.
Neither the defense, represented by two of America’s top law firms, Mike Quiel by the Minns Firm, and Steve Kerr by Kimerer and Derrick, nor the Government, put their experts on the stand until the trial was over – at sentencing.
The two defendants were charged with conspiring with each other and their lawyer, Chris Rusch, who turned on them, plead guilty to conspiracy and testified against them. They were also indicted on two counts of failing to file a form, TDF 90-22.1 – that had to do with foreign bank accounts. Finally, they were charged with filing two incorrect tax returns, which totaled five counts against them.
Quiel, represented by the Minns Firm, including lawyers Michael Minns and Ashley Arnett, was found not guilty of conspiracy, and the charges were dismissed on both foreign bank account indictments, but guilty on the two incorrectly prepared tax returns.
Michael Minns and Ashley Arnett
Kerr, represented by Kimerer and Derrick, including Michael Kimerer and Rhonda Neff, was also found not guilty of conspiracy but guilty on the other four counts.
Michael Kimerer and Rhonda Neff
The entire case was primarily based on the word of their former lawyer Chris Rusch, whose website as of the date of this article is still up, and who, although suspended by the California state bar, after Minns filed a grievance against him, still lectured on tax law in San Antonio, Texas as late as September 2013.
Theoretically, because of the conspiracy, Mr. Rusch was allowed to testify against his own clients, violating sacred attorney-client privilege about the Swiss accounts he set-up.
Further, he received immunity for other crimes he committed, which ranged from felonies involving these very accounts, to even notary fraud.
So how is this possible? Mr. Rusch swore they were all guilty of conspiring and yet his clients were found not guilty of conspiracy – so, should he have been allowed to testify against them at all?
Mr. Rusch advertises as an expert in criminal tax work but fails to tell his prospective clients his only tax trial was as a criminal defendant – and his only time in front of a criminal tax jury was to snitch on his own clients for taking his advice.
Stay tuned. The Ninth Circuit will have to decide if a client can go to jail based on testimony from his own lawyer who made a deal with the Government to save himself.
With two tax returns admittedly wrong (the Government claims intentionally, the defense says they relied on attorney Rusch) the sentencing came down to one big question. Do they owe taxes? If so, how much?
The large tax claimed by the Government would require a sentencing of at least 51 months, but as much as 72 months. Far less than the 35 years they started with but still a huge hardship to the accused and their families.
The government’s argument rested on the testimony of IRS agent Deborah Saparata who claimed taxes owed in the millions.
Under Minns’ cross-examination Ms. Saparata admitted she was not a CPA, had never taken a test for any tax license, was not qualified to do banking taxation (this case dealt with Swiss Banks), had not seen the stock certificate the IRS case was based on, and had not given credit for money the lawyer Chris Rusch had stolen.
Following her, Michael Kimerer put on Sheri Betzer, a licensed and qualified CPA, who testified that Kerr owed no taxes. Michael Minns then put on Ron Braver, also a licensed and qualified CPA, with a masters degree in tax, who testified Mike Quiel owed no taxes. Minns also showed the court the government’s own computer record which showed Quiel owed no taxes.
Mrs. Edelstein cross-examined Mr. Braver.
Mr. Stockwell cross-examined Mrs. Betzer.
While this reporter was not surprised by the only reasonable decision, that the Government had not proven either defendant owed a tax, Edelstein and Stockwell appeared surprised. A short two weeks later they served notice that the Government was appealing the sentence.
“Notice is hereby given that the United States of America appeals to the United States Court of Appeals for the Ninth Circuit the sentence imposed in the court’s judgment entered on September 25, 2013.” – Submitted by John Leonardo, US Attorney Arizona, Timothy Stockwell, and Monica B. Edelstein.
The next day, October 10, 2013, they filed a joint motion with the crooked lawyer, Chris Rusch, to postpone sentencing him for the fourth time! Why is Mr. Rusch permitted to continue to sell his services as a confessed criminal? Is the Government involved in some sort of conspiracy with Mr. Rusch? We notice Mr. Rusch does not offer his “services” to “testify” against his own clients.
The court found against the defendants in favor of the government on only one key issue, that the Swiss Accounts and multiple corporations were sophisticated.
The court’s findings lowered the possible sentence from 35 years to a minimum of 10 months and a maximum of 16 months.
The court ordered the minimum 10 months but also ordered no imprisonment until the 9th circuit ruled on the case.
Presumably, the Ninth Circuit will decide if this lawyer Chris Rusch, had the right to testify against his clients, and if the Government had the right to use his testimony against his own clients for an immunity deal. If a crooked lawyer can trade his clients for his own personal deal with the Government – the U.S. Constitution is in jeopardy. The US~Observer can think of no better team to defend the constitutional right to counsel than the Minns Firm and Kimerer and Derrick.
This reporter also hopes the appellate court will examine the reasonableness of sending someone to trial in a tax case when the citizen likely does not owe a tax.
For now, both of the accused remain free pending this important appeal.
Mr. Rusch continues, without government interference, to solicit business as a tax attorney and is reportedly set to lecture in Panama for the organization known as Live and Invest Overseas, in November. If this is taking place with the permission of the Federal Government, are they using this as an opportunity to raid the clients of Mr. Rusch and the client’s of Live and Invest Overseas, perhaps with Mr. Rusch working with them on the inside? Do the owners of Live and Invest Overseas know they are sponsoring a convicted felon who testified under oath against his own clients? Do the people meeting with them in Panama next month know they are being taught taxation by an IRS snitch?
Time will tell…