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United States v. Quiles

August 17, 2010

UNITED STATES OF AMERICA
v.
GERMAN QUILES, APPELLANT
UNITED STATES OF AMERICA
v.
GLORIA QUILES, APPELLANT



On Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Crim. Nos. 07-391-1 and 07-391-3) Honorable Jan E. DuBois, District Judge.

The opinion of the court was delivered by: Greenberg, Circuit Judge.

PRECEDENTIAL

Argued June 23, 2010

BEFORE: SMITH, FISHER and GREENBERG, Circuit Judges

OPINION OF THE COURT

I. INTRODUCTION

This matter comes on before this Court on appeal from judgments of conviction and sentence entered against two defendants in the District Court in which the government's case relied heavily on the testimony of an undercover informant. After the jury found defendants guilty at the trial, a state grand jury indicted the informant in an unrelated matter on charges of child rape and other heinous sexual crimes. Once defendants learned about the informant's indictment, they sought a new trial under Fed. R. Crim. P. 33. The District Court denied their request and they now appeal to this Court. For the reasons we give in this opinion, we will affirm the District Court's order denying the motions for a new trial. We also reject defendants' individual challenges to the sufficiency of the evidence, the procedure used in sentencing, and the substantive sentence imposed.

II. BACKGROUND

German Quiles and Maria Quiles, husband and wife, owned Aruba, Inc., a money-servicing business operating as "Aruba Check Cashing and Auto Tags" in North Philadelphia.*fn1 Their daughter Gloria Quiles also worked at Aruba Check Cashing and served as the company's secretary. The company offered services such as money wires, money orders, and check cashing. The business was subject to federal regulations relating to money laundering with German Quiles being responsible for its compliance with these regulations.

A. The Government's Investigation

In July of 2006, the government began an investigation into possible money laundering at Aruba Check Cashing. Immigration and Customs Enforcement Special Agent Steven Galambos, who relied on an undercover informant named Hector Ayala, led the investigation. Galambos instructed Ayala to enter Aruba Check Cashing and identify himself as a drug dealer's assistant who needed money laundered, making sure to ask for the name of the employee assisting him. For each visit, Galambos gave Ayala a bag full of small bills and told Ayala to request large bills, money orders, and wire transfers. Ayala could offer up to 10% of the money that Aruba was laundering as a "fee" in exchange for the laundering. After he exited the store, Ayala told Galambos what occurred, and Ayala's recitation would be confirmed by a recording device that Galambos had concealed inside Ayala's jacket or pants pocket. Ayala turned over the newly laundered bills, money orders, and wire transfer receipts to Galambos.

Operating under Galambos's instructions, Ayala entered Aruba Check Cashing as a confidential informant 30 different times.*fn2 On his first visit Ayala explained his criminal purpose, and on the remaining visits he brought money for laundering or picked up laundered money. Ayala reported that German Quiles, Maria Quiles, and Gloria Quiles all performed money laundering transactions for him while knowing that they were helping to launder drug money. Ayala also reported that the Quileses accepted "fees" well above normal for the type of transactions involved in their services.*fn3 When Ayala delivered the laundered money to Galambos he gave him a summary of the events that occurred in Aruba Check Cashing. Unfortunately, Ayala's recollection is the best evidence of what had taken place inside Aruba Check Cashing as the recordings produced from the hidden recording device are of extremely poor quality and entire sections of them in some instances are inaudible. However, there are some audible incriminating statements on the tapes. E.g., Supp. App. 75 (Ayala states that he has "drug money"); id. at 68 (man Ayala identifies as German Quiles asks if Ayala wants "money laundry, money" [sic]).*fn4

B. Trial and Conviction

After the government concluded its investigation, a grand jury charged German Quiles, Maria Quiles, and Gloria Quiles with conspiracy to commit money laundering in violation of 18 U.S.C. § 1956(h) (Count One) and 16 separate acts of money laundering or aiding and abetting money laundering in violation of 18 U.S.C. §§ 2, 1956(a)(3) (Counts Two through Seventeen). Defendants pled not guilty and the case proceeded to a jury trial.

At trial, the government's case rested primarily on the testimony of three witnesses. The first witness, IRS employee Ted Cunningham, explained the money laundering requirements that applied to Aruba Check Cashing. Galambos was the second witness and he recounted the details of his investigation and his interactions with the undercover informant. Galambos, however, could not testify about most of what had occurred inside of Aruba Check Cashing because he remained outside the business during Ayala's excursions. The government called Ayala as the third of these witnesses. Ayala described his actions and gave a step-by-step analysis of the events that his hidden device recorded. For example, Ayala explained where he was standing in the store and identified the voices heard on the recordings. He also testified to non-verbal actions that defendants took, such as smiling or nodding, and to unrecorded conversations such as his introduction to German Quiles at which Ayala explained that he was there to launder drug money.

It is obvious that Ayala's testimony was essential to the government's case. Without his explanations, the secret recordings would have been barely usable snippets of sounds and partial conversations. Understandably, therefore, defendants built their strategy around discrediting Ayala. Thus, in his opening statement, the attorney for German Quiles told the jury they would see an informant "run amok," by accusing innocent people in order to get paid. App. at 260. The government, in contrast, stated that Ayala had worked as a confidential informant for over 20 years, doing "good, old fashioned" undercover work. Id. at 252. The trial focused on this chasm.

The jury returned its verdict on January 17, 2008, convicting German Quiles and Maria Quiles on all the counts charged. The jury, however, found Gloria Quiles not guilty of conspiracy to commit money laundering (Count One) and of ten specific acts of money laundering (Counts Two through Eleven). But it convicted her of the remaining six specific acts of money laundering (Counts Twelve through Seventeen). Defendants moved for a judgment of acquittal or a new trial but the District Court denied their requests on August 13, 2008, in an order entered on August 14, 2008. United States v. Quiles, No. 07-391, 2008 WL 3561618 (E.D. Pa. Aug. 13, 2008).

C. Post-Trial Events

Soon after the District Court denied defendants' post-trial motions for acquittal or a new trial, a grand jury in Pennsylvania indicted Ayala on multiple counts of statutory sexual assault, involuntary deviate sexual intercourse with a minor under the age of 13 years, and other similar crimes.

After learning of Ayala's indictment, all three defendants moved for a new trial under Fed. R. Crim. P. 33.*fn5 On February 24, 2009, the District Court denied defendants' motions in an order entered on February 25, 2009, holding that the new evidence was inadmissible impeachment evidence. United ...


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