USA v. Robert Sorich, 06-4251.  Despite the existence of a federal consent decree and other measures that for decades have sought to bring more transparency and legitimacy to the City of Chicago’s civil service hiring, patronage appointments have continued to flourish. The centerpiece of this appeal is a challenge to the government’s theory of prosecution: they contend that their behavior, while dubious, is not criminal  and that the honest services mail fraud statute, 18 U.S.C. § 1346, is unconstitutionally vague.

We conclude that the defendants’ actions do constitute mail fraud, and that the statute is not unconstitutionally vague as applied to the facts of this case.

The defendants’ chief argument on appeal is that the district court’s jury instructions on honest services mail fraud impermissibly expand the scope of that crime beyond the statute. They also contend that the honest services mail fraud statute is unconstitutionally vague, and that only state law can supply the fiduciary duty that runs between public officials and the citizenry. Before turning to those arguments, we provide a bit of background on honest services mail fraud.

The mail fraud statute, 18 U.S.C. § 1341, criminalizes the use of the mails for carrying out a "scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises." The courts had long interpreted this statute as encompassing schemes to defraud another not just of money and property, but also "intangible rights," chief among them the right of citizens to the honest discharge of public duties by public servants.

In most honest services cases, the defendant violates a fiduciary duty in return for cash-kickbacks, bribes, or other payments.  The "[m]isuse of office (more broadly, misuse of position) for private gain is the line that separates run-of-the-mill violations of state-law fiduciary duty . . . from federal crime." United States v. Bloom, 149 F.3d 649, 655 (7th Cir. 1998).

The defendants’ chief argument centers on the "private gain" requirement. The district court’s jury instruction stated that a scheme to defraud requires an intent "to deprive a governmental entity of the honest services of its employees for personal gain to a member of the scheme or another".

Imagine scenario (A) in which a mayor surreptitiously channels city contracts to his cronies in the business community; they get a windfall whereas he has merely helped his friends and takes no money. Or imagine scenario (B) in which an attorney bribes a court in order to obtain favorable results for his clients in their lawsuits. Or scenario (C) where a union boss sells union property to a senator even though the senator did not offer the highest price, and in exchange receives the senator’s vote on a matter that concerns the union.

In all three scenarios the public has been defrauded of the honest services of its public servants: the mayor, the court, and the senator. Moreover, in all three scenarios the defendant-the mayor, the attorney, and the union boss-was not the one who stood to gain financially. Certainly the defendants all received something: in (A), the mayor received the gratitude of his friends; in (B), the attorney could boast to future clients of a high success rate, which is good for business; and in (C) the union boss curried valuable favor with the senator. But the money went to another party. All three scenarios have played out in the federal courts and have resulted in convictions for mail fraud.  See United States v. Fernandez, 282 F.3d 500, 503-05 (7th Cir. 2002), United States v. Silvano, 812 F.2d 754, 759-60 (1st Cir. 1987) (scenario A); Ginsburg v. United States, 909 F.2d 982 (7th Cir. 1990) (scenario B); Lombardo v. United States, 865 F.2d 155, 159-60 (7th Cir. 1989) (scenario C).

Reading Bloom’s private gain requirement to include gain by non-schemers does not, as the defendants warn, "effectively eliminate[ ]" this limit on the scope of honest services mail fraud. As we have noted, it will be a rare case when a party engaged in fraud directs the benefits to non-schemers. 

Unlikely scenarios, maybe, but mail fraud nevertheless. Robin Hood may be a noble criminal, but he is still a criminal.

The defendants also contend that United States v. Thompson, 484 F.3d 877 (7th Cir. 2007)
compels a decision in their favor. The point that distinguishes Thompson from this case is the absence of a scheme to defraud.

The present case, by contrast, features a massive scheme to defraud, complete with specific intent and material misrepresentations. The defendants created an illegitimate, shadow hiring scheme based on patronage and cronyism by filling out sham interview forms, falsely certifying that politics had not entered into their hiring, and covering up their malfeasance. These are the hallmarks of a fraud. See United States v. Bush, 522 F.2d 641, 647-48 (7th Cir. 1975). Thompson is miles away.

For the foregoing reasons, we AFFIRM the convictions and sentences of the defendants.

For the full opinions visit the 7th Circuit Court of Appeals Web Site.

For more about attorney Michael J. Petro, visit www.mjpetro.com .

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