Arizona businessman owes IRS nothing, still prison bound - Fox 2 News Headlines

Arizona businessman owes IRS nothing, still prison bound

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By Randy Wallace, Investigative Reporter - Bio

FOUNTAIN HILLS, Ariz. -- Before the IRS came knocking Michael and Vicki Quiel lived a charmed life.

High school sweethearts, married for 30 years.

Michael was in the navy, Vicki's late father was also a military man.

But the couples' respect and trust for the government is forever changed,

"You just don't do this to people is what I thought," Vicki Quiel said.

The reason behind the couple's recent trust issues with the government?

Three letters, I.R.S.

"I was having a real hard time imagining that you could go to jail when you don't owe taxes," Vicki said.

Even though a 6 week trial proved Michael Quiel owed the I.R.S. nothing , the way it stands now he must spend 10 months behind bars.

"It's not what it did to me it's the people around me," Michael Quiel said while chocking back tears. "It's real hard."

Before all the IRS press releases tarnished his reputation, Michael Quiel was known in Phoenix as a prominent businessman.

He donated thousands to charities, even taking a special interest in a young man's debilitating spinal cord injury.

But last year all of Quiel's success was overshadowed by the IRS.'s highly touted criminal case against him.

"I would never wish this on anybody actually," Vicki Quiel said.

In the high profile IRS prosecution the government accused Quiel of being involved in secret foreign bank accounts, willful million dollar tax evasion and multiple conspiracies.

"Anybody that didn't know Mr. Quiel and who read the IRS propaganda would believe he was a horrible human being," said Houston attorney Michael Minns.

"I invest in a lot of different companies, Quiel said. "I'm usually the first investor in the door."

Upon the urging of his tax attorney Christopher Rusch, Quiel says he opened up Swiss bank accounts.

"He starts seeing news reports that if you have any involvement with Swiss bank you're suppose to come forward," Minns said.

Those reports prompted Quiel to seek advice from Rusch.

He says the tax attorney advised him to do nothing, not even submit an IRS form that's required for anyone who has more than 10 thousand dollars in a foreign country account.

"Most people did not even know this form existed," Minns said. "Most CPA's didn't know it existed."

"Everything was represented to me in the beginning as being legal," Quiel said. "So I didn't think in the beginning it was any big deal."

Even if charges were filed Quiel said his tax attorney assured him he could turn himself in and avoid being arrested.

But on a bright Sunday afternoon while playing golf at his country club Quiel learned that was all a lie.

"The IRS agents showed up in the clubhouse showing badges and guns," Quiel said.

"There was no way he was going to get out until Monday," Vicki Quiel said.

His weekend arrest meant Quiel had to spend at least one night in the county jail.

"There were people bouncing off the walls," Quiel said. "It was crazy."

The Quiels soon discovered crazy had come to stay.

"Finding out about it was hard in the first place," Vicki Quiel said. "But going through the trial was probably the worst it had a huge affect on me and my family, mostly the kids."

One of the most shocking things to emerge from the 6 week federal trial was Christopher Rusch's role.

Remember he was Quiel's tax attorney.

Ever heard the term attorney client privilege?

"In this case it went into the trash can," Minns said.

When Minns got involved he had a real mess on his hands.

Turns out Quiel's own attorney, Chris Rusch turned into the governments' star witness.

"While he was representing Mike Quiel in this case he found himself indicted in this case," Minns said.

In a deal with the government Rusch pled guilty throwing client after client under the bus.

He's still awaiting sentencing.

We tried contacting Rusch for comment by email addresses and phone numbers. so far we've heard nothing back.

The government spent a lot of money on this case, according to Minns.

But did taxpayers get enough bang for their buck?

Probably not once you hear the end.

All of the most serious charges, the ones that had Quiel facing 35 years in prison ended in dismissals or not guilty.

He was convicted of filing incorrect tax returns.

The mistake, his attorney says didn't cheat the government it cost Quiel who ended up with less of a return.

Quiel's 10 month prison sentence is now on appeal.

"If you make a mistake on your tax return is it possible you could do time in prison even if you don't owe a tax? now the answer is yes," Minns said.

"Basically I had a nervous breakdown at the end of the trial when it was over," Vicki Quiel said.

Even though the government failed to prove the most damaging charges against him Quiel says the damage the government did to him, his family, his businesses is irreparable.

"Collateral damage I guess, Vicki Quiel said. "Why does anybody's family have to be collateral damage."

The government's case caused such havoc for his companies Quiel says a thousand people lost their jobs.

"To me it was like a disease because it affected so many other people, so many other lives," Quiel said. "It was so unnecessary."

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