Court Opinion

ID: 161925
Source: CourtListenerOpinion
Date Created: 2010-08-14 07:20:46+00
Date Added: 2024-06-11T17:24:38.740194
License: Public Domain

F I L E D
                                                                      United States Court of Appeals
                                                                              Tenth Circuit
                      UNITED STATES COURT OF APPEALS
                                                                              JAN 25 2002
                                    TENTH CIRCUIT
                                                                         PATRICK FISHER
                                                                                  Clerk

 SECURITIES AND EXCHANGE COMMISSION,

           Plaintiff-Appellee,

 v.                                                               No. 00-4176
                                                            (D.C. No. 99-CV-258-G)
 ANTHONY J. MARINO,                                                (D. Utah)

           Defendant-Appellant,

 and

 GREGORY C. JOHNSON; RICHARD AMES
 HIGGINS; MOUSA INTERNATIONAL; AJM
 GLOBAL; and CONSORTIO INTRANACIONAL,

           Defendants.

                                 ORDER AND JUDGMENT *

Before KELLY, Circuit Judge, BRORBY, Senior Circuit Judge, and MURPHY,
Circuit Judge.

       The Securities and Exchange Commission sued Anthony J. Marino alleging

       *
          This order and judgment is not binding precedent except under the doctrines of
law of the case, res judicata and collateral estoppel. The court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
Mr. Marino defrauded investors of approximately twenty-eight million dollars.

The district court granted summary judgment for the Securities and Exchange

Commission and permanently enjoined Mr. Marino from violating registration and

anti-fraud securities laws. Mr. Marino now appeals the district court’s ruling. He

argues (1) the district court lacked jurisdiction because Mr. Marino was never

properly served, and (2) the district court’s entry of summary judgment violated

Mr. Marino’s right to due process. We have jurisdiction to review the district

court’s injunction pursuant to 28 U.S.C. § 1291(a)(1). “In reviewing the

injunction, we may also address the summary judgment order that served as the

district court’s principal legal basis for granting the injunction because the district

court’s ruling on summary judgment was inextricably intertwined with [the

injunction].” Law v. National Collegiate Athletic Ass’n, 134 F.3d 1010, 1015

(10th Cir.), cert. denied, 525 U.S. 822 (1998). After careful consideration, we

affirm.

                                  BACKGROUND

      On April 20, 1999, the Securities and Exchange Commission filed a civil

suit alleging Mr. Marino engaged in “prime bank” securities fraud. “Prime bank”

fraud schemes involve appropriating the reputation of reputable banks to solicit

investment in sham “trading programs.” Typically, false promises of substantial

                                          -2-
profit induce investors into these frauds.

      The Securities and Exchange Commission served Mr. Marino by delivering

a copy of the summons and complaint to Mr. Marino’s adult daughter at Mr.

Marino’s Las Vegas home. Mr. Marino’s wife and daughter lived in the Las

Vegas home. At that time, Mr. Marino was in Costa Rica, where he also

maintained an apartment. After she received the service documents, Mr. Marino’s

daughter telephoned him. At his request, she immediately express mailed the

documents to Mr. Marino in Costa Rica. Mr. Marino admits he received the

service documents a few days later.

      On the day the complaint was filed, the district court entered a temporary

restraining order freezing Mr. Marino’s assets. 1 This order also required Mr.

Marino to provide an accounting of his assets and liabilities and repatriate his

funds held overseas. Although Mr. Marino had contacted counsel, neither Mr.

Marino nor the attorney appeared at an April 28, 1999 preliminary injunction

hearing. The district court entered a preliminary injunction continuing the asset

freeze and other relief granted under the temporary restraining order.

      Mr. Marino does not dispute he received the temporary restraining order with the
      1

summons and complaint.

                                         -3-
        After the district court entered the preliminary injunction, Mr. Marino

telephoned the law firm of Suitter Axland to request legal representation. Even

though Mr. Marino knew of the court orders freezing his assets, he subsequently

transfered nearly $100,000 to a Suitter Axland trust account to be used for his

defense. Attorneys from Suitter Axland then petitioned the district court to lift

the asset freeze on the money in the trust account so they could represent Mr.

Marino. In a well-reasoned order, the district court denied the petition. The

district court also ordered Suitter Axland to remit the trust account money to the

district court.

        At some point during the summer of 1999, Costa Rican authorities arrested

and incarcerated Mr. Marino for alleged violations of Costa Rican securities laws.

Max D. Wheeler, with the firm of Snow, Christensen & Martineau, contacted the

district court on August 3, 1999. Mr. Wheeler explained a family friend was

willing to supply $50,000 for Mr. Marino’s defense. However, Mr. Wheeler

would only enter an appearance if the district court agreed these new funds were

not subject to the asset freeze. After an investigation, the Securities and

Exchange Commission agreed to the fee arrangement in a letter dated October 20,

1999.

                                          -4-
      On February 9, 2000, counsel for the Securities and Exchange Commission

deposed Mr. Marino in Costa Rica. Although Mr. Marino’s local counsel chose

not to attend, two Costa Rican attorneys represented Mr. Marino at the deposition.

During the deposition Mr. Marino admitted to participating in “trading programs,”

which he claimed produced ten percent returns per week. Mr. Marino refused,

however, to identify his partners or the accounts still containing investors’ funds

citing “a nondivulge agreement” and explaining his cooperation would “not [be]

good for [his] well-being.” Mr. Marino admitted he was still in possession of

forty to fifty million dollars of investors’ money. When asked where the money

was located, Mr Marino refused to answer, explaining, “[y]ou guys would freeze

it.” Based on this deposition, along with other investigative materials, the

Securities and Exchange Commission moved for summary judgment. The district

court granted the motion on October 6, 2000.

                                   DISCUSSION

                                          I.

      Mr. Marino argues the Securities and Exchange Commission’s “purported

service upon Mr. Marino was defective as a matter of law.” Specifically, Mr.

Marino argues service was defective because “[a]t no time did the [Securities and

Exchange Commission] make any effort whatsoever to serve Mr. Marino in Costa

                                         -5-
Rica.” The determination of a defendant’s usual place of abode for purposes of

service of process is a mixed question of law and fact. Campbell v. Bartlett, 975
F.2d 1569, 1574 (10th Cir. 1992). Because this case involves the application of

undisputed facts to legal rules we apply de novo review. Id. at 1574 n.10.

      Service of process may be completed by leaving a copy of the summons and

complaint “at the individuals’s dwelling house or usual place of abode with some

person of suitable age and discretion then residing therein.” Fed. R. Civ. P.

4(e)(2). We have defined a person’s usual place of abode as the place where he

or she is “‘actually living, except for temporary absences, at the time service is

made.’” Rosa v. Cantrell, 705 F.2d 1208, 1214 (10th Cir. 1982) (quoting Federal

Procedure Lawyer’s Edition § 65:70 (1981)), cert. denied, 464 U.S. 821 (1983).

      “Service may be made on a traveling defendant by leaving papers at a
      place he has recognized as his legal residence, so long as he receives
      actual notice, even though his vocation takes him to other places on a
      regular basis and he returns to the place where process was delivered
      when he has the opportunity.”

Id. (quoting Federal Procedure Lawyer’s Edition § 65:71). Moreover, a

defendant’s extended travels do not change his usual place of abode “‘if he did

not intend to change his residence, as evidenced by his leaving his family

behind.’” Id. at 1215 (quoting Annotation, Allen E. Korpela, Construction of

phrase “usual place of abode,” or similar terms referring to abode, residence, or

                                          -6-
domicil, as used in statutes relating to service of process, 32 A.L.R. 3d 112, 140-

41 (1970).

       The record on appeal shows Mr. Marino’s Las Vegas home was his usual

place of abode. Even though Mr. Marino’s vocation took him on extended trips to

Costa Rica, he maintained his home and family in Las Vegas. Mr. Marino would

return to his family when he had the opportunity. In his words, “I didn’t leave

[Las Vegas] – I still have my house there, my family is there, I didn’t leave. I

would leave and go back and forth. I didn’t physically take off.” 2 Moreover, Mr.

       2
          Mr. Marino contends the Federal Rules of Civil Procedure prevent consideration
of this deposition because of irregularities in the deposition process. Mr. Marino argues
Securities and Exchange Commission counsel ended his deposition too soon depriving
him the opportunity to “ask any questions or clarify points.” Mr. Marino also notes he
was on blood pressure medication during the deposition. Moreover, Mr. Marino never
reviewed and signed the deposition. The district court held Mr. Marino waived these
objections by failing to move to suppress the deposition with reasonable promptness.
“The handling of depositions is vested within the sound discretion of the [district] court.”
Sims Consol., Ltd. v. Irrigation & Power Equip., 518 F.2d 413, 418 (10th Cir. 1975)
(quotation marks and citation omitted).

       Errors and irregularities in the manner in which the testimony is transcribed
       or the deposition is prepared, signed, certified, sealed, indorsed, transmitted,
       filed, or otherwise dealt with by the officer under Rules 30 and 31 are
       waived unless a motion to suppress the deposition or some part thereof is
       made with reasonable promptness after such defect is, or with due diligence
       might have been, ascertained.

Fed. R. Civ. P. 32(d)(4). Mr. Marino first questioned these technical defects in response
to the Securities and Exchange Commission’s motion for summary judgment. At this
point approximately five months had elapsed with “no effort whatsoever to challenge

                                             -7-
Marino admits he received actual notice when his adult daughter express-mailed

the documents to him in Costa Rica. Under these circumstances, service of

process was valid.

                                           II.

      Next, Mr. Marino contends the district court’s entry of summary judgement

violated his right to procedural due process. Specifically, Mr. Marino argues the

order freezing his assets unfairly delayed his attempt to hire counsel. Moreover,

Mr. Marino argues after hiring counsel he was not “able to consult with or assist

counsel” because he was incarcerated in Costa Rica. “We review de novo the

extent of constitutional rights.” United States v. Jones, 160 F.3d 641, 645 (10th

Cir. 1998).

      “The procedural aspect of the Fifth Amendment Due Process Clause

guarantees that government action may not deprive a person of life, liberty or

[the] deposition.” Two Costa Rican attorneys represented Mr. Marino at his deposition.
Also, Mr. Marino’s local counsel had access to the deposition transcript. Despite these
resources, Mr. Marino has never pointed to any factual errors in his deposed statements.
Moreover, Mr. Marino has not identified his blood pressure medicine or provided any
evidence the medicine would affect his ability to respond to questions. Under these
circumstances, we cannot say the district court abused its discretion in holding Mr.
Marino waived his objections.

                                           -8-
property unless the government affords a fair procedure to contest the

deprivation.” Id. “The fundamental requirement of due process is the

opportunity to be heard ‘at a meaningful time and in a meaningful manner.’” Id.

(quoting Armstrong v. Manzo, 380 U.S. 545, 552 (1965)). Accordingly, “a

defendant must be given a reasonable opportunity to employ and consult with

counsel.” Chandler v. Fretag, 348 U.S. 3, 10 (1954). However, the Fifth

Amendment does not create a right to use assets properly seized pursuant to drug

forfeiture laws to pay defense attorneys. Caplin & Drysdale, Chartered v. United

States, 491 U.S. 617, 633 (1989). Similarly, “a swindler in securities markets

cannot use the victims’ assets to hire counsel who will help him retain the

gleanings of crime.” Securities & Exch. Comm’n v. Quinn, 997 F.2d 287, 289

(7th Cir. 1993).

      The record on appeal shows Mr. Marino had a reasonable opportunity to

hire and consult with counsel. Two Costa Rican attorneys represented him. 3

Although Mr. Marino was prevented from paying his attorneys with tainted assets,

      3
          Mr. Marino argues “there is no evidence [his Costa Rican attorneys] ... were
licensed to practice law in the United States or the State of Utah.” However, Mr.
Marino’s Salt Lake City counsel, Mr. Wheeler, was licensed in Utah. Mr. Marino cites
no authority indicating the due process clause requires every member of a defendant’s
international team of counsel must be licensed to practice in the venue jurisdiction.

                                           -9-
he nevertheless also retained local defense counsel. Mr. Wheeler, a Salt Lake

City attorney, expressed his intention to represent Mr. Marino on August 3, 1999.

On October 20, 1999, a Securities and Exchange Commission investigation

cleared $50,000 provided by a family friend to pay for Mr. Marino’s defense.

This left almost an entire year before entry of summary judgment for Mr. Marino

to submit any accounting, affidavit, or deposition that would establish an issue of

fact requiring a trial. Although Mr. Marino’s records were seized by federal

authorities, Mr. Marino does not dispute the records were available for review in

preparing his defense. At times, Mr. Wheeler was able to consult with Mr.

Marino via mobile phone in his Costa Rican prison. Mr. Marino’s Costa Rican

attorneys were able to visit Mr. Marino. Mr. Wheeler could relay messages to and

from Mr. Marino through his Costa Rican counsel. Mr. Wheeler also had the

option of traveling to Costa Rica to meet with Mr. Marino. However, when

Securities and Exchange Commission attorneys traveled to Costa Rica to take Mr.

Marino’s deposition, Mr. Wheeler chose not to attend. 4 It was the fact of Mr.

      4
          Mr. Marino also argues he “never attended any witness depositions or
declarations upon which the summary judgment was based.” He asserts this deprived him
of “the opportunity to cross-examine any of these witnesses or follow up on the
declarations.” However, the only deposition relied upon by the district court was Mr.
Marino’s own deposition, where he was represented by two Costa Rican attorneys. The
district court did consider the declaration of Robert D. Mulford, Vice President and
General Counsel to the Federal Reserve Bank of San Francisco. We have held such
statements taken under oath by the Securities and Exchange Commission “are equivalent
to affidavits in terms of the quality of the evidence involved.” Securities E Exch.

                                        -10-
Marino’s fraudulent activities, rather than the asset freeze or his incarceration,

that encumbered his case. We are satisfied Mr. Marino had a meaningful defense

in accord with Constitutional demands of due process.

       For these reasons we AFFIRM the district court’s judgment.

                                           Entered by the Court:

                                           WADE BRORBY
                                           United States Circuit Judge

Comm’n v. American Commodity Exch. Inc., 546 F.2d 1361, 1369 (10th Cir. 1976). Mr.
Marino was free to submit affidavits contesting this witness statement. Mr. Marino’s
counsel was also at liberty to depose Vice President Mulford or other witnesses who
might establish an issue of fact. We are satisfied the district court’s consideration of Vice
President Mulford’s declaration for purposes of summary judgment did not violate Mr.
Marino’s due process rights.

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