Attorneys for a Miami developer won a rare directed verdict in a criminal fraud case by showing the defendant relied on bad legal advice.
An Orlando federal judge granted a Rule 29 acquittal after the government rested its case, finding prosecutors failed to prove developer Rebecca Gheiler acted in bad faith when she offered condominium buyers incentives not disclosed in closing documents. The practice allegedly cost mortgage lenders more than $8.25 million.
Hundreds of emails between Gheiler and former Coral Gables attorney Angel Garcia-Oliver — who pleaded guilty for his role in the alleged scheme — showed she relied on his assurances that everything was legal, U.S. District Judge Paul Byron ruled.
Gheiler faced up to 30 years in prison if convicted, according to the U.S. Attorney’s Office in Orlando. Everyone else charged in the scheme pleaded guilty, but Gheiler headed to trial with a defense prepared by the Miami firm Markus/Moss. The firm’s roster of past clients includes NBA star Dwight Howard, professional baseball players Yasiel Puig and Manny Ramirez, and director Billy Corben.
Although they have won many jury verdicts and pretrial dismissals, the Sept. 7 decision was the only Rule 29 acquittal Gheiler’s attorneys, David O. Markus and Margot Moss, have won in their decades of experience. The drama of the moment was heightened by the approach of Hurricane Irma, Markus said.
“The storm was barreling down,” he said. “Everybody’s concerned. It was Thursday after lunch. Everybody was from Miami: the client, the lawyers, the witnesses. People were flooding into the [Orlando] hotel we were staying in, making reservations. … We drove south on the turnpike at like, 100 mph as it was a parking lot going north, so it was just a crazy moment.”
The trial had plenty of dramatic moments of its own. The defense team set out to prove Garcia-Oliver was lying when he testified he was acting as Gheiler’s closing agent, not her lawyer. But they also held one card close to the chest, telling the jury during opening statements there would be a surprise coming about Garcia-Oliver’s character.
Markus said he discovered Garcia-Oliver, who was disbarred in 2014 and faces sentencing Oct. 2, hid assets from the government after he pleaded guilty to conspiracy to commit bank and wire fraud. When defendants enter guilty pleas, they must also give a full financial accounting of their assets so they can pay restitution.
“Shortly before he pled guilty, he quitclaimed his $1.8 million Coral Gables home to his wife and he didn’t tell the government about that and didn’t disclose it in his financial affidavit,” Markus said. “We exposed that in the trial.”
Garcia-Oliver’s attorneys are Jane Moscowitz of Moscowitz & Moscowitz in Coral Gables and David M. Edelstein P.A. in Miami.
Edelstein said the quitclaim argument was false. Public records show the quitclaim deed was executed in 2014, and Garcia-Oliver pleaded guilty in 2016. Garcia-Oliver contacted his attorneys before he quitclaimed the house to make sure he wasn’t doing anything wrong, Edelstein said. They gave him the go-ahead, as the action would be publicly recorded and they didn’t believe the house was forfeitable.
“The characterization that he was hiding assets by quitclaiming the house to his wife in a publicly recorded document is laughable,” Edelstein said.
Furthermore, Edelstein said, the financial affidavit Garcia-Oliver filled out in December 2016 was truthful: “The affidavit was asking him about his current assets and liabilities, not about what his assets were years before he was arrested and charged.”
Edelstein congratulated Markus and Moss for their “excellent lawyering” and maintained that Garcia-Oliver testified truthfully.
“He accepted responsibility for his actions over seven years ago and is extremely remorseful about the role he played in this case,” Edelstein said in an email. “He knew better, but like so many others during the heyday of the real estate bubble, he got carried away thinking the old rules didn’t apply, or if they did, nobody really cared because the market was just going to continue to go up. Well, we know how that ended.”
Edelstein said the judge excluded at least one email from evidence that “clearly suggests Ms. Gheiler had to have been aware that it was illegal to conduct transactions in the way she was selling her company’s inventory.”
“I’m sure the judge had his reasons for excluding it, but the reality is that there was evidence that was not considered that would have corroborated Angel’s testimony,” Edelstein said. “Angel never attempted to curry any favor with the government. To the contrary, since our first meeting with the prosecutors way back in 2010, he has been resigned to the fact that he will have to accept his punishment for his role in this offense, and the only way for him to begin making amends is to be an open book.” After the acquittal, prosecutors Christopher Poor and Vincent Chiu even offered to let their adversaries stay with them during the hurricane, Moss said.
“These prosecutors were true gentlemen and disclosed everything along the way and were very upfront with us, so it ended up being a very pleasant experience,” Moss said.