In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 06-4251, 06-4252, 06-4253 & 06-4254
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
ROBERT SORICH, TIMOTHY MCCARTHY,
JOHN SULLIVAN, and PATRICK SLATTERY,
Defendants-Appellants.
____________
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 05 CR 644—David H. Coar, Judge.
____________
ARGUED MAY 1, 2007—DECIDED APRIL 15, 2008
____________
Before RIPPLE, MANION, and WILLIAMS, Circuit Judges.
WILLIAMS, Circuit Judge. Despite the existence of a fed-
eral 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. These defend-
ants were key players in a corrupt and far-reaching
scheme, based out of the mayor’s Office of Intergovern-
mental Affairs, that doled out thousands of city civil
service jobs based on political patronage and nepotism. The
2 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
government alleged that the defendants concealed what
they were doing by falsely assuring city lawyers that
their hires were legitimate, and then shredding evidence
and hiding their involvement once a criminal investigation
began. After an eight-week jury trial, three of the defen-
dants were convicted of mail fraud and the fourth of
making materially false statements to federal investigators.
The centerpiece of their appeal is a challenge to the gov-
ernment’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 also argue that they did not
deprive the city or the people of Chicago of any money
or property, but the jobs that they wrongfully gave away
were indeed a kind of property, so we reject this argu-
ment. Individual defendants also challenge the suf-
ficiency of the indictment, the connection to the mails, and
the sufficiency of the evidence against them, while one
defendant argues that he was entitled to a sentencing
adjustment for playing a minor role. Finding none of
these arguments persuasive, we affirm on all counts.
I. BACKGROUND
The beating heart of this fraudulent scheme was the
mayor’s Office of Intergovernmental Affairs (IGA). For-
mally, the office serves as a liaison between the City of
Chicago and state and federal governments and has no
role in hiring for the city’s 37,000 or so civil service jobs.
Informally, the office coordinated a sizeable portion of the
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 3
city’s civil service hiring, ferreting out jobs to footsoldiers
in the mayor’s campaign organization and to other cronies.
The government introduced a substantial amount of
evidence describing both the contours and the details of
this long-running operation (it has likely been in place
since before any of these defendants came to work for the
city1). We view the evidence in the light most favorable
to the government since the jury found the defendants
guilty. It includes testimony from former department
heads, political campaign coordinators, personnel manag-
ers, and workers both hired and rejected; wiretaps of
conversations; and documentary evidence, including hir-
ing records, sham interview forms, and lists tracking job
applicants and their sponsors. The most dramatic docu-
ment is a spreadsheet showing all 5,700 patronage appli-
cants and their sponsors between 1990 and 1997. The
spreadsheet was kept on defendant Robert Sorich’s laptop
computer, and he attempted to destroy both the list and
the computer, but both were turned over to the FBI in 1997
pursuant to a grand jury subpoena. FBI analysts were
able to recover the spreadsheet.
Rather than describe this evidence in detail, we will
provide an overview here, and will supply any relevant
specifics in the analysis section below. Sorich was the
mayor’s so-called “patronage chief,” and held the title
Assistant to the Director of IGA. Defendant Timothy
McCarthy was Sorich’s deputy from 2001 to 2005 and
often stepped into his shoes. Campaign coordinators
would pass Sorich lists of campaign workers and volun-
1
See generally O’Sullivan v. City of Chicago, 396 F.3d 843, 847-50
(7th Cir. 2005).
4 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
teers, whose names he would then send to the heads of
various city departments—Aviation, Streets and Sanita-
tion, Sewers, Water, etc.—for jobs. Defendants Patrick
Slattery and John Sullivan held high positions in the
Department of Streets and Sanitation.
During both individual and mass-hiring sequences,
departmental managers like Slattery and Sullivan would
hold sham interviews and then falsify interview forms
in favor of the pre-selected “winners.” The interview
forms were often filled out weeks after the interviews,
with one pile for blessed applicants (to be given high
scores), and another for everybody else (to be given low
scores). Some positions, such as tree trimmer, required
merit tests but the results were frequently ignored. Evi-
dence showed that Sorich even pressured departmental
managers to hire applicants with drinking problems for
positions that involved overseeing workplace safety.
This all went on despite the existence of multiple laws
and personnel regulations forbidding the use of political
considerations in hiring for civil service jobs, and mandat-
ing the awarding of those jobs on merit. These laws largely
stem from the “Shakman Decrees,” which are two federal
consent decrees banning the use of politics in City of
Chicago hiring that came into being as a result of litiga-
tion in the 1970s and ‘80s. Members of the scheme falsely
signed “Shakman certifications,” attesting that particular
hiring sequences had not been influenced by political
patronage.
Early on, the defendants moved to dismiss the indict-
ment. The district court denied the motion, and many of
the arguments that it rejected form the basis of this appeal.
During trial the government moved to dismiss its first
count of mail fraud, which implicated all four defendants,
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 5
based on an insufficient connection to the mails. Sorich
was convicted of two counts of mail fraud and acquitted
of two counts. He received a sentence of 46 months’
imprisonment. McCarthy was also convicted of two counts
of mail fraud and sentenced to 19 months’ imprisonment.
Slattery was convicted of one count of mail fraud and given
a 27-month sentence, and Sullivan was convicted of one
count of giving a material, false statement to the FBI, and
acquitted of one count of the same. He was sentenced
to 60 days’ imprisonment.
II. ANALYSIS
A. Mail fraud
The indictment posited two theories of mail fraud: that
the defendants defrauded the city and the people of
(1) money and property, and (2) the intangible right to the
defendants’ honest services as city officials. The jury filled
out a general verdict form that did not specify under
which theory it convicted. If the defendants were mounting
a factual challenge to the sufficiency of the evidence,
then sufficient evidence to convict on either theory would
preserve the jury’s verdict. But both theories must be
legally sound—the honest services statute must be con-
stitutional, for instance—in order for the guilty verdict to
stand, and the defendants argue that the honest services
theory was fatally flawed. See Griffin v. United States, 502
U.S. 46, 59-60 (1991); Tenner v. Gilmore, 184 F.3d 608, 611
(7th Cir. 1999); United States v. Sun-Diamond Growers, 138
F.3d 961, 972 (D.C. Cir. 1998). We begin with that argu-
ment, and then consider the defendants’ narrower chal-
lenge to the money and property theory of mail fraud.
6 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
1. Honest services mail fraud
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.
a. Background and history
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 prom-
ises.” 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. The Supreme Court put
an end to this theory in McNally v. United States, 483
U.S. 350, 360 (1987), holding:
Rather than construe the statute in a manner that
leaves its outer boundaries ambiguous and in-
volves the Federal Government in setting stan-
dards of disclosure and good government for local
and state officials, we read § 1341 as limited in
scope to the protection of property rights. If Con-
gress desires to go further, it must speak more
clearly than it has.
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 7
Congress then spoke. The year after the McNally decision
it passed 18 U.S.C. § 1346, which reads in its entirety: “For
the purposes of this chapter, the term ‘scheme or artifice
to defraud’ includes a scheme or artifice to deprive another
of the intangible right of honest services.” The statute
superseded McNally and reinstated the line of cases
preceding it. See United States v. Rybicki, 354 F.3d 124, 136-
37 (2d Cir. 2003) (en banc).
Broadly speaking, honest services fraud cases come in
two types. In the first, an employer is defrauded of its
employee’s honest services by the employee or by another.
In United States v. George, 477 F.2d 508, 509-10 (7th Cir.
1973), for example, an employee of television manufacturer
Zenith granted a contract to another company to sup-
ply television cabinets in exchange for kickbacks. The
Zenith employee, the worker at the cabinet factory, and
a middleman all were convicted of depriving Zenith of
its employee’s honest services. In the second and more
common type of case, the citizenry is defrauded of its
right to the honest services of a public servant, again, by
that servant or by someone else. For instance, in United
States v. Warner, 498 F.3d 666 (7th Cir. 2007), the Illinois
Secretary of State channeled state contracts and leases to a
friend in return for paid vacations.
In both examples above, and in most honest services
cases, the defendant violates a fiduciary duty in return
for cash—kickbacks, bribes, or other payments. Not all
fraud cases follow this precise pattern, as we shall see, but
given the amorphous and open-ended nature of § 1346, see
United States v. Brown, 459 F.3d 509, 520-21 (5th Cir. 2006),
courts have felt the need to find limiting principles, and
ours has been that the “[m]isuse of office (more broadly,
misuse of position) for private gain is the line that separates
8 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
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) (emphasis added). We took our lan-
guage from McNally, which summed up the existing law
and characterized honest services mail fraud in this way.
See 483 U.S. at 355. The limitation not only cabins zealous
prosecutors by insuring that not every violation of a
fiduciary duty becomes a federal crime, but also reduces
the risk of creating federal common law crimes, which
are not permitted. Bloom, 149 F.3d at 654-55. Other
courts have crafted their own limiting principles to keep
§ 1346 from becoming too unwieldy. The Third and
the Fifth Circuits have adopted “a state law limiting
principle,” meaning that ordinarily, honest services mail
fraud only occurs when the defendant’s scheme to defraud
involves a violation of state law. See United States v.
Murphy, 323 F.3d 102, 116-17 (3d Cir. 2003); United States v.
Brumley, 116 F.3d 728, 734-35 (5th Cir. 1997) (en banc).
Courts have also crafted special requirements in the limited
context of honest services fraud in the private sector. See
generally Kristen Kate Orr, Note, Fencing in the Frontier: A
Look into the Limits of Mail Fraud, 95 Ky. L.J. 789, 797-99
(2007).
Our misuse-of-position-for-private-gain limitation has
not been adopted by other circuits, and in fact has come
in for its share of criticism. The Tenth Circuit, in rejecting
the limitation, characterized it as an effort “to judicially
legislate by adding an element to honest services fraud
which the text and structure of the fraud statutes do not
justify.” United States v. Welch, 327 F.3d 1081, 1107 (10th Cir.
2003). And the Third Circuit stated that the requirement
“adds little clarity to the scope of § 1346” and is, among
other things “under-inclusive” because it would not cover
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 9
a situation—such as an undisclosed conflict of inter-
est—that does not actually yield a benefit. United States v.
Panarella, 277 F.3d 678, 691-92 (3d Cir. 2002). The Tenth
Circuit expresses a legitimate concern, for the only ele-
ments of mail fraud are (1) a scheme to defraud (en-
tailing a material misrepresentation), (2) an intent to
defraud, and (3) the use of the mails. See 18 U.S.C. § 1341;
United States v. Henningsen, 387 F.3d 585, 589 (7th Cir. 2004).
Nevertheless, in setting out the private gain requirement
we have taken our cue from the Supreme Court’s own
characterization of honest services fraud in McNally, and
to that extent consider ourselves in good company. But
we also fear that both the Tenth and Third Circuits may
have misunderstood our position to some extent. Showing
misuse for private gain means showing an intent to reap
private gain; it is well established that a fraudulent
scheme that does not actually cause harm is still actionable.
See Durland v. United States, 161 U.S. 306, 313-14 (1896);
United States v. Tadros, 310 F.3d 999, 1006 (7th Cir. 2002).
b. Private gain
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” (emphasis added). The defendants
contend that the “or another” language misstates Bloom,
which, they say, teaches that only a scheme to enrich the
defendant or his co-schemers qualifies as a fraud—a
scheme to enrich a third party does not count. The distinc-
tion is critical, because here the defendants are charged
not with enriching themselves but with enriching (with
10 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
jobs) thousands of individuals who worked for the cam-
paigns of the defendants’ paymasters. The “winners” of
jobs were not charged with crimes, and it may not be fair to
characterize them as co-schemers; there certainly are a lot
of them. The government argues that if indeed the “or
another” language is a mistake, the error is harmless,
because here the defendants themselves achieved a
gain—job security for keeping the patronage machine
running. But our recent decision in United States v. Thomp-
son, 484 F.3d 877, 882 (7th Cir. 2007), holds that job
security is not a private gain, so if private gain by the
campaign workers-turned city employees is insufficient,
then the jury instruction does indeed present a problem.
The defendants’ argument that any private gain must go
to the defendants themselves is not without basis, for
we and other courts have not always been consistent
with our description of the requirement. Although
McNally itself and the key portions of Bloom refer to
“private gain,” Bloom also once uses the phrase “personal
gain,” 149 F.3d at 657, and in United States v. Hausmann,
345 F.3d 952, 956 (7th Cir. 2003), we used “personal gain”
exclusively. Other circuits have also described our re-
quirement as a “personal gain” or “personal benefit.” See
Brown, 459 F.3d at 520; Welch, 327 F.3d at 1106; Panarella,
277 F.3d at 692. The semantic difference between “private”
and “personal” gain may be insignificant, but to the extent
that “personal” connotes gain only by the defendant, it
is misleading. By “private gain” we simply mean illegiti-
mate gain, which usually will go to the defendant, but
need not.
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
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 11
helped his friends and takes no money. Or imagine sce-
nario (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 grati-
tude 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).
These cases are the exception to a rule of human nature
rather than of law: usually someone up to no good will be
out to enrich himself, not others. It is thus with a hint of
irony that we stated in United States v. Spano, 421 F.3d 599,
603 (7th Cir. 2005), that “[a] participant in a scheme to
defraud is guilty even if he is an altruist and all the bene-
fits of the fraud accrue to other participants.” The defen-
dants seize on Spano’s “other participants” language and
contend that fraud exists when private gain goes to other
12 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
schemers, as in the above three examples, but not when it
goes to third parties. We disagree. It is much less likely—but
no less culpable—that fraudulent schemers will share the
proceeds with third parties rather than amongst them-
selves. In Hausmann, 345 F.3d at 954, 956, an attorney
referred clients to a chiropractor friend in exchange for a
percentage of the business brought in by each referral; he
did not tell his clients about his take. The chiropractor
made good by paying the attorney’s creditors and his
favorite charities, and we affirmed the attorney’s convic-
tion. Id. But suppose the attorney had stated that he only
wanted the kickbacks to go to charities, or, for that matter,
to his estranged brother, about whom the attorney had
always felt guilty. Unlikely scenarios, maybe, but mail
fraud nevertheless. Robin Hood may be a noble criminal,
but he is still a criminal. “In the case of a successful
scheme, the public [or client] is deprived of its servants’ [or
attorney’s] honest services no matter who receives the
proceeds.” Spano, 421 F.3d at 603.2
Reading Bloom’s private gain requirement to include
gain by non-schemers does not, as the defendants warn,
2
The defendants contend that this discussion in Spano is
dictum, but an alternate ground for a holding is not a dictum.
Woods v. Interstate Realty Co., 337 U.S. 535, 537 (1949); Neiman v.
Rudolf Wolff & Co., 619 F.2d 1189, 1193 n.4 (7th Cir. 1980);
Medeiros v. Vincent, 431 F.3d 25, 34 (1st Cir. 2005). Although we
eventually concluded in Spano that the defendant arguably
did benefit personally, we mentioned that fact second and in a
single sentence after discussing the impact of a lack of personal
gain for over a paragraph. Spano, 421 F.3d at 602-03. In any case,
whether or not the discussion is binding precedent, it is con-
sistent with our case law and our understanding of the mail
fraud statute, and to that extent is persuasive authority.
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 13
“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. Indeed, here, the individuals who
received city jobs in return for political work may well have
known that the game was rigged, but the sheer scale of the
fraud (well over 5,000 jobs) might prevent a prosecutor
from pursuing them in addition to the ringleaders. More-
over, the true purpose of the private gain
requirement—and one that does not depend on who gets
the spoils—is to prevent the conviction of individuals
who have breached a fiduciary duty to an employer or
the public, but have not done so for illegitimate gain. Cf.
United States v. Czubinski, 106 F.3d 1069, 1077 (1st Cir. 1997)
(mail fraud conviction reversed where IRS employee
improperly accessed confidential tax records but did not
misuse them for gain in any way); see also Brown, 459 F.3d
at 522 (employees who engaged in fraudulent transaction
to inflate their company’s earnings statements did not
deprive employer of their honest services because em-
ployer encouraged the misbehavior).
The defendants also contend that United States v. Thomp-
son compels a decision in their favor. There we reversed the
mail fraud conviction of Wisconsin procurement officer
Georgia Thompson, who was in charge of awarding a
contract for the state’s travel needs. Thompson forced a
run-off between her boss’s contractor of choice, Adelman
Travel Group, and another bidder that came out slightly
ahead in a highly subjective scoring process. The two
companies tied in the run-off and Thompson broke the tie
in Adelman’s favor according to approved procedures.
Her boss was happy and she received a small raise
through normal channels, but we held that this was not
14 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
the sort of “private gain” that was necessary to sustain a
conviction for mail fraud. 484 F.3d at 884. We did not
expressly discuss the possibility that the benefit of the
contract to Adelman, a third party, could be construed as
the necessary private gain, but we needn’t have, for the
point that distinguishes Thompson from this case is the
absence of a scheme to defraud. Despite the government’s
zealous presentation of the case, we were not convinced
that Thompson engaged in fraudulent behavior, instead
characterizing her acts as “conduct that, as far as this
record shows, was designed to pursue the public inter-
est as the employee understood it.” Id.; see also United
States v. Segal, 495 F.3d 826, 834 (7th Cir. 2007) (“The case
against Thompson simply did not measure up.”).
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.
c. Constitutionality of 18 U.S.C. § 1346
The defendants next contend that the honest services
mail fraud statute is unconstitutionally vague as applied
to their case. They argue that they were not on notice that
their behavior was illegal, and that the government’s
interpretation of the statute is open to prosecutorial
overreaching. Again we must disagree.
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 15
It is hard to take too seriously the contention that the
defendants did not know that by creating a false hiring
scheme that provided thousands of lucrative city jobs to
political cronies, falsifying documents, and lying repeat-
edly about what they were doing, they were perpetrating
a fraud. Indeed, the specific intent requirement of mail
fraud seriously undercuts any claim to a lack of notice that
their behavior was criminal. See United States v. Hasner,
340 F.3d 1261, 1269 (11th Cir. 2003). And although the
defendants insist that this prosecution is “an unprece-
dented expansion” of honest services mail fraud, several
cases on the books provided them ample warning that
they risked prosecution. United States v. Dvorak, 115 F.3d
1339, 1341 (7th Cir. 1997), involved a similar patronage-in-
hiring scheme in which the Undersheriff of Cook County,
Illinois falsified records to cover his tracks. The defendants
argue that the defendant there pled guilty and his appeal
only concerned his sentence, but the fact remains that he
was prosecuted and convicted of mail fraud for acts
remarkably similar to theirs, and they should have taken
note. More recently, United States v. Fernandez involved
a sham system for awarding city contracts that closely
tracks these defendants’ system for awarding jobs: there
was a rigged bidding process, blank questionnaires filled
out after decisions had been made, and even the organiza-
tion of businesses after their owners had received con-
tracts. 282 F.3d at 503-05. These decisions provided suffi-
cient notice.
An en banc panel of the Second Circuit recently stated
that “[n]o circuit has ever held . . . that section 1346 is
unconstitutionally vague.” Rybicki, 354 F.3d at 143. That
statement involved an asterisk, because the Second Cir-
cuit had just a year earlier held that the provision was
16 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
unconstitutionally vague as applied to the facts of that case.
See United States v. Handakas, 286 F.3d 92, 112 (2d Cir.
2002). But Rybicki explicitly overruled that portion of
Handakas, Rybicki, 354 F.3d at 144, bringing the circuit into
line with the other circuits that have rejected vagueness
challenges to § 1346, including our own. See Warner, 498
F.3d at 697-99; Hausmann, 345 F.3d at 958 (7th Cir. 2003);
Hasner, 340 F.3d at 1269 (11th Cir. 2003); Welch, 327 F.3d at
1109 n.29 (10th Cir. 2003); United States v. Frega, 179 F.3d
793, 803 (9th Cir. 1999); United States v. Frost, 125 F.3d 346,
371 (6th Cir. 1997); United States v. Gray, 96 F.3d 769, 776-77
(5th Cir. 1996); United States v. Bryan, 58 F.3d 933, 941 & n.3
(4th Cir. 1995), abrogated on other grounds by United States
v. O’Hagan, 521 U.S. 642, 650 (1997). Section 1346 is not
unconstitutionally vague as applied to this case.
d. Source of fiduciary duty
The defendants next argue that the indictment and the
jury instructions impermissibly stated that the Shakman
consent decree was one of the sources creating a fiduciary
duty between the defendants and the citizenry. We re-
view this challenge de novo.
There are actually two Shakman decrees, one entered in
1972 and one in 1983, and both are the result of litigation by
Michael Shakman, an independent candidate for the
Illinois Constitutional Convention who felt locked out
of the campaign process because of the City of Chicago’s
patronage hiring system. See generally O’Sullivan v. City
of Chicago, 396 F.3d 843, 847-50 (7th Cir. 2005). Some-
what simplified, the decrees forbid the city from basing
its hiring decisions for civil servants on political factors.
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 17
Both the indictment and the jury instructions in this
case describe the Shakman decrees alongside other
sources of local and state law as potential sources of the
fiduciary duty running between the defendants as public
servants and the people of Chicago. Those sources include
a state law and a local ordinance criminalizing false
entries by local government officials intending to defraud,
720 ILCS 5/33E-15; Chicago, Ill. Code § 2-74-090(B),
and a local ordinance mandating the selection of civil
servants based on merit, Chicago, Ill. Code § 2-74-050(3).
On appeal the defendants do not contest that they vio-
lated these legal provisions.
The defendants nevertheless contend that the Shakman
decrees are an impermissible source of a fiduciary duty,
and that since the jury did not indicate which source it
relied upon, the verdict must be overturned. But we have
never held that only state law can supply a fiduciary
duty between public official and public or between em-
ployee and employer in honest services cases. See Bush,
522 F.2d at 646 n.6. Indeed, our case law, and the case
law of the vast majority of circuits, shows that other
sources can create a fiduciary obligation. E.g., George,
477 F.2d at 514 n.7 (employee handbook); United States v.
Williams, 441 F.3d 716, 723-24 (9th Cir. 2006) (power of
attorney agreement). It may well be that merely by virtue
of being public officials the defendants inherently owed the
public a fiduciary duty to discharge their offices in the
public’s best interest. See United States v. DeVegter, 198
F.3d 1324, 1328 (11th Cir. 1999).
The defendants invite us to adopt the minority “state
law limiting principle” shared by the Third and Fifth
Circuits, Murphy, 323 F.3d at 116-17; Brumley, 116 F.3d at
734, but we have already declined to add this limiting
18 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
principle to the private gain requirement that stems from
McNally. See Bloom, 149 F.3d at 654-55. Moreover, although
in United States v. Martin we remained open to an argument
on this front in the future, we also stated that “[a] litigant
who wants us to overrule our previous decisions must
do more than cite a recent decision of another court (unless
the Supreme Court!) that is to the contrary.” 195 F.3d 961,
967 (7th Cir. 1999). That is essentially all that the defen-
dants have done here. Given this fact, and the other
sources of a fiduciary duty, we decline to overturn the
verdict on this basis.
2. Traditional mail fraud
In addition to challenging the government’s theory of
honest services mail fraud, the defendants attack the
alternate theory that they committed what might be
called traditional mail fraud. We review de novo their
contention that the indictment insufficiently alleged a
deprivation of money or property. See United States v.
Moore, 446 F.3d 671, 676 (7th Cir. 2006).
By setting up a false hiring bureaucracy the defendants
arguably cheated the city out of hundreds of millions of
dollars. The defendants argue that since the city would
have filled these jobs and paid these salaries anyway, it
has not suffered a loss. But we rejected this argument
in United States v. Leahy, 464 F.3d 773, 787-89 (7th Cir.
2006), in which we upheld the conviction of a Chicagoan
who obtained millions of dollars in city contracts by
falsely certifying his businesses as minority-owned enter-
prises. We were unpersuaded by his contention that
since the city would have awarded the contracts to someone,
no harm was done: the “object was money, plain and
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 19
simple, taken under false pretenses from the city in its role
as a purchaser of services.” Id. at 788; see also Hausmann, 345
F.3d at 957 (the lawyer who referred clients to a chiroprac-
tor buddy in return for kickbacks “deprived his clients of
their right to know the truth about his compensation”);
Welch, 327 F.3d at 1108; Bush, 522 F.2d at 648. In Leahy the
city paid for, and was cheated out of, minority-owned
enterprises, and here the city paid for, and was cheated out
of, qualified civil servants.
Jobs are a lot like contracts. Neither is a bag full of money
but both are immensely valuable: a contract is a promise
to pay for services rendered, while a job is the exchange
of labor for a paycheck. Hence just as Leahy held that
fraudulently obtained contracts are property, courts
have found that salaries fraudulently obtained, United
States v. Doherty, 867 F.2d 47, 56, 60 (1st Cir. 1989) (Breyer,
J.), and job opportunities fraudulently denied, United States
v. Douglas, 398 F.3d 407, 417-18 (6th Cir. 2005); United States
v. Granberry, 908 F.2d 278, 280 (8th Cir. 1990), represent
property for purposes of mail fraud. The defendants
argue that the right to give out jobs is a mere regulatory
interest of the kind that Cleveland v. United States, 531 U.S.
12, 20-21 (2000), said cannot give rise to a property right.
But the Court in Cleveland held that a video poker license
granted by the state is not property, and we think the jobs
at issue here are much closer to contracts than poker
licenses.
The defendants also point to United States v. Walters,
997 F.2d 1219 (7th Cir. 1993), which they say counsels
that if the money or property doesn’t go to the defendants,
it doesn’t amount to mail fraud. In Walters, we reversed
the conviction of a sports agent who signed college ath-
letes, in contravention of NCAA rules. The theory of
20 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
prosecution for mail fraud was that since the agent caused
the players to become ineligible (college athletes aren’t
allowed to have agents), he committed mail fraud every
time the universities subsequently sent scholarship
checks to the athletes by mail. We stated that the universi-
ties “were not out of pocket to Walters; he planned to profit
by taking a percentage of the players’ professional incomes,
not of their scholarships.” Id. at 1224. But this was not a
requirement that the defendant receive the money or
property, but rather a way of illustrating a deeper prob-
lem with the case. The scholarship money that the univer-
sity sent the athletes was incidental, rather than the target
of the scheme. See id. at 1224-25 (mail fraud statute pun-
ishes “schemes to get money or property by fraud rather
than methods of doing business that incidentally cause
losses”). Here, however, getting the city to award jobs to
political workers and cronies was the very object of the
defendants’ scheme.
In sum, we hold that jobs are property for purposes
of mail fraud, and that the indictment sufficiently alleged
a deprivation of property.
3. Other matters pertaining to mail fraud and the
indictment
Sorich, McCarthy, and Slattery raise a host of other
challenges to their convictions. We find these arguments
unpersuasive, and briefly discuss those substantial
enough to warrant written comment.
a. Use of the mails
McCarthy contends that insufficient evidence ties the use
of the mails to his two counts of conviction. With respect
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 21
to count two, Dennis Henderson testified that he re-
ceived a job in the Sewers Department in return for politi-
cal work, and for count five, Jeffrey Harness, an ordinary
applicant, testified that he was passed over for a job as a
building inspector. Both Henderson and Harness testified
that they received their letters in the mail. McCarthy
challenges this point, suggesting that the letters may have
been hand delivered, but we will not overturn the jury’s
decision to credit Henderson’s and Harness’s testimony.
McCarthy also contends that the Harness letter was
insufficiently connected to the hiring scheme because
Harness received it after the illegitimate “winner” of the
position was found out and forced to resign in disgrace.
But the overall hiring scheme continued, and this paper-
work lent a false air of propriety and regularity to the
city’s hiring process. See Fernandez, 282 F.3d at 508.
b. Joining the scheme
Slattery argues that insufficient evidence shows that
he joined the fraudulent scheme and possessed the
specific intent to defraud. The argument has very
little merit. To start with, Slattery personally falsified
hundreds, if not thousands, of interview forms. He con-
tends that “the forms cannot be accurately described as
true or false,” but this is a bit too philosophical for us, as
we suspect it was for the jury. The forms contained numeri-
cal scores for such categories as, in a truck driver hiring
sequence, driving ability and past driving experience.
Although these criteria are perhaps subjective, filling them
out willy-nilly and dozens at a time—high scores for
blessed applicants, low scores for the rest, without even
an attempt to quantify their skills—can fairly be described
as falsification.
22 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
The government presented other damning evidence of
Slattery’s participation and his intent to defraud. A union
complained after its members did poorly in one hiring
sequence, and one of the city’s labor liaisons asked Slattery
for the interview forms to back up the city’s hiring deci-
sions. Only one problem: the interview forms had not
been completed yet. According to the liaison’s testimony,
after Slattery delivered this “shocking” news, she said,
“Pat, please tell me you had a legitimate business reason
for selecting the people that you selected. Did you base
it on performance, attendance, anything?” She testified
that Slattery replied, “no.” On appeal, Slattery attacks
her credibility, but we will not upset the jury’s decision
to believe her.
Slattery also pleads ignorance, saying that no juror
could have found that he even knew that a fraudulent
hiring system was afoot, let alone joined it. We think the
jury was well-supported in rejecting this contention.
Slattery and Sorich were good friends, and Daniel
Katalinic, a former deputy commissioner of Streets
and Sanitation who ran a political organization, testified
that he overheard Slattery complain that his own political
workers were not getting choice enough jobs, and that he
would talk to Sorich about the matter. Katalinic also
testified, as did Slattery’s boss Jack Drumgould, that
Slattery accompanied Drumgould to meetings in which
Sorich would hand out a group of blessed applicants,
and that Slattery sometimes took names directly from
Sorich and passed them on to Drumgould for hiring. A
reasonable jury could find beyond a reasonable doubt on
this evidence that Slattery joined the scheme with an
intent to defraud.
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 23
c. Sufficiency of indictment’s mail fraud counts
Sorich and McCarthy contend that the district court
abused its discretion by refusing to dismiss a portion of
the indictment that the government amended by super-
seding indictment thirteen days prior to trial. The govern-
ment contends that after reviewing its trial proof, it de-
cided to substitute one mailing for another on count two
in order to strengthen its case and to avoid having to rely
on a witness with shaky credibility. The defendants can
neither show that this minor change prejudiced them in
any concrete way—by demonstrating, for example, that
their attorney was unable to prepare in time—nor rebut
the government’s explanation that it simply wished to
tighten its case. They have failed to make out a due pro-
cess claim on this point. See United States v. McMutuary,
217 F.3d 477, 481-82 (7th Cir. 2000).
McCarthy argues that count five—which charged mail
fraud in the hiring of two unqualified union officials’
sons as building inspectors—was inconsistent with the
remainder of the indictment. The indictment charged a
scheme of false hiring exclusively for political campaign
work, he argues, whereas in this count, hiring was
based on nepotism. But as in United States v. Stout, 965
F.2d 340, 344 (7th Cir. 1992), McCarthy’s “interpretation
of the indictment is too narrow.” In the very first paragraph
of the indictment’s “overview of the scheme” section, this
text appears: “In addition, in some cases Sorich and others
rewarded other favored persons and groups with City jobs
and promotions.” Fairly read, the scheme set out in the
indictment is fraudulent hiring of cronies—usually polit-
ical cronies, but not always—and count five fits in this
scheme.
24 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
B. False statements
John Sullivan was charged with one count of mail fraud
and two counts of knowingly making materially false
statements to the FBI, 18 U.S.C. § 1001(a)(2). At trial, the
government moved to dismiss the mail fraud count—
which pertained to all four defendants—after discovering
that there was an insufficient connection to the mails. The
jury then found Sullivan guilty of one count of making
false statements and acquitted him of the other. He con-
tends that insufficient evidence supported the conviction,
that his answers were literally true if unresponsive, and
that a fatal variance existed between the indictment and
the proof at trial. We review whether the evidence, taken
in the light most favorable to the government, could
allow a rational jury to find guilt beyond a reasonable
doubt. See United States v. Orozco-Vasquez, 469 F.3d 1101,
1106 (7th Cir. 2006).
Sullivan was interviewed three times by Assistant United
States Attorneys and FBI agents. At that early point in the
investigation, the agents focused their questioning on the
city’s “hired truck” scandal, which turned out to be the
wedge that allowed prosecutors to split the log of fraudu-
lent city hiring. See generally United States v. Boyle, 484
F.3d 943, 944 (7th Cir. 2007). Nevertheless, they did
ask about patronage in hiring, and specifically about the
clout of Daniel Katalinic, who as mentioned above ran a
political organization and was the Assistant Commissioner
for the Department of Streets and Sanitation. Katalinic
was originally indicted with these four defendants, but
he pled guilty and cooperated with the government.
At trial the government elicited the specifics of Sullivan’s
February 18, 2005 interview through the testimony of FBI
Agent John Hauser, who was present and took notes:
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 25
Government: Now, sir, what, if anything, did he
say about Mr. Katalinic’s political
organization or getting preferential
treatment in the hiring process?
Hauser: He said that to his—he didn’t have
any knowledge about members of
Katalinic’s political organization
getting preferential treatment.
...
Government: What, if anything, did he say about
his knowledge of membership of
the Katalinic organization?
Hauser: He said he didn’t know who the
members of Mr. Katalinic’s organi-
zation were.
These two statements make up the count of conviction for
false statements. The indictment describes the false state-
ments as “A. Sullivan had never heard of members of
Katalinic’s organization getting preferential treatment;
and B. Sullivan did not know the identity of members of
Katalinic’s organization.”
During the cross-examination of Agent Hauser, the
defense emphasized that he did not record the conversa-
tion verbatim, but rather used his notes to refresh his
recollection on the stand, and that he did not write up his
formal report of the interview until five and a half
months later. (Hauser testified that it was not his usual
practice to wait so long, but that there “was an intense
amount of activity in the investigation at that point.”) The
defense also pinned Hauser down on what exactly his
notes—which were not introduced into evidence—said.
26 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
According to testimony, the notes read as follows:
Q: Never heard of DK’s political people getting
good treatment?
A: Doesn’t know who they are.
We reject Sullivan’s argument that there was insuf-
ficient evidence for the jury to find that he knowingly
and willfully made false material statements about his
knowledge of Katalinic’s organization. See United States v.
Humphrey, 34 F.3d 551, 556 (7th Cir. 1994). Sullivan says
he was unaware of a shadow hiring system, but the
testimony of several witnesses, including Katalinic and
Drumgould, showed that Sullivan complained about
various IGA picks, instructed others to interview and hire
certain individuals, passed on IGA candidates to those with
hiring authority, and discussed members of Katalinic’s
political organization, including Pat Foy, a close friend of
Sullivan’s and a member of Katalinic’s organization who
testified for the government. Thus it is telling that during
his three interviews with Assistant U.S. Attorneys and FBI
agents, Sullivan never mentioned IGA or the role of politics
in hiring decisions, despite ample opportunities to do so.
With particular regard to Katalinic’s political workers,
testimony tied Sullivan to a list of Streets and Sanitation
interviewees, complete with a color-coded key matching
favored applicants with powerful sponsors, including “Dan
K.” Foy testified that the key was in Sullivan’s handwrit-
ing. The jury was permitted to conclude that Sullivan knew
the identities of members of Katalinic’s organization, and
that Sullivan knew that they were getting jobs and promo-
tions.
Sullivan also contends that he was entitled to an instruc-
tion under Bronston v. United States, 409 U.S. 352 (1973),
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 27
which reversed the perjury conviction of a man who during
a bankruptcy application answered a question in a way
that was literally true but unresponsive. As discussed
above, the evidence was sufficient to allow a jury to find
that Sullivan’s statements were false rather than literally
true but misleading, so the district court did not err by
rejecting the instruction. As for there being a fatal variance
between the indictment’s description of the false state-
ments and the evidence given at trial, Sullivan argues that
“[t]here is an obvious and important difference between
‘having heard of’ something and ‘having any knowledge
about’ something.” (The indictment charged Sullivan
with saying he “had never heard of” Katalinic’s men
getting favorable treatment, while Hauser testified that
Sullivan said “he didn’t have any knowledge about” them
getting preferential treatment.) But Sullivan doesn’t say
what that “obvious and important difference” is. Only a
material variance between indictment and trial proof
warrants relief. See United States v. Bhagat, 436 F.3d 1140,
1146-47 (9th Cir. 2006); United States v. Shah, 44 F.3d 285,
296 (5th Cir. 1995). Finally, Sullivan argues that Hauser’s
questions were fundamentally ambiguous and untrustwor-
thy, given his reliance on his notes rather than a transcript
or recording of the interview. But there is no requirement
that a conversation be transcribed or recorded in order to
support a conviction under § 1001, see United States v.
Poindexter, 951 F.2d 369, 387-88 (D.C. Cir. 1991), and
Hauser’s trustworthiness was a matter for the jury, not a
reviewing court.
C. Sentencing
Only one defendant challenges his sentence. Slattery
argues that the district court clearly erred by refusing to
28 Nos. 06-4251, 06-4252, 06-4253 & 06-4254
grant him a two-point reduction for being a “minor
participant” in the hiring scheme. U.S.S.G. § 3B1.2(b). The
Sentencing Guidelines explain that to qualify for the
adjustment, the defendant must be “substantially less
culpable than the average participant,” and “less culpable
than most other participants.” Id. cmt. nn.3(A), 5. We
rarely accept such challenges, given that the district court
is in the best position to evaluate a particular defendant’s
role in a criminal scheme. See United States v. McGee,
408 F.3d 966, 988 (7th Cir. 2005); United States v. Rodriguez-
Cardenas, 362 F.3d 958, 959-60 (7th Cir. 2004).
We cannot agree with Slattery that he was substantially
less culpable than the average participant in the hiring
scheme. He was certainly less involved than Sorich, who
oversaw all hiring. But the fraud could not have suc-
ceeded without high-level players in each department
willing to organize sham interviews and hire the blessed
candidates. In other words, the scheme required both a
chief executive and mid-level management. See United
States v. Gallardo, 497 F.3d 727, 741 (7th Cir. 2007) (essen-
tial member of scheme not entitled to adjustment even
though others were more involved); United States v. Olivas-
Ramirez, 487 F.3d 512, 516 (7th Cir. 2007) (same). Slattery
protests that he only contributed to the scheme for part
of its duration, but that argument is tough enough
when one is involved for only two days, Olivas-Ramriez,
487 F.3d at 515-16, let alone the five years that Slattery
participated. We also note that Slattery was personally
responsible for providing false information on hundreds
if not thousands of interview forms, behavior that belies
a suggestion that he was a bit player. The district court
did not clearly err in denying his request for a minor-
role adjustment.
Nos. 06-4251, 06-4252, 06-4253 & 06-4254 29
III. CONCLUSION
For the foregoing reasons, we AFFIRM the convictions
and sentences of the defendants.
USCA-02-C-0072—4-15-08