469 F.3d 1064 (7th Cir. 2006), 05-1548, United States v. De La Cruz

Docket Nº:05-1548, 05-1549.
Citation:469 F.3d 1064
Party Name:UNITED STATES of America, Plaintiff-Appellee, v. Joe DE LA CRUZ and Edwardo Maldonado, Defendants-Appellants.
Case Date:November 29, 2006
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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469 F.3d 1064 (7th Cir. 2006)

UNITED STATES of America, Plaintiff-Appellee,


Joe DE LA CRUZ and Edwardo Maldonado, Defendants-Appellants.

Nos. 05-1548, 05-1549.

United States Court of Appeals, Seventh Circuit.

November 29, 2006

Argued May 31, 2006.

Appeals from the United States District Court for the Northern District of Indiana, South Bend Division No. 03 CR 91—Robert L. Miller, Jr., Chief Judge.

David E. Hollar (argued), Office of the United States Attorney, Hammond, IN, for Plaintiff-Appellee.

Kevin E. Milner, Palatine, IL, Bryan M. Truitt (argued), Tsoutsouris & Bertig, Valparaiso, IN, for Defendants-Appellants.

Before Kanne, Evans, and Sykes, Circuit Judges.

Kanne, Circuit Judge.

Defendants Joe De La Cruz and Edwardo Maldonado were each convicted on a single count of misapplying public funds in violation of 18 U.S.C. § 666(a)(1)(A). On appeal, the defendants argue that they

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could not have misapplied funds in violation of § 666(a)(1)(A) because the expenditures in question were properly approved by the city government. Defendants also argue that an evidentiary ruling constitutes reversible error and that their sentences are the result of clear error. We disagree and affirm the convictions and sentences.


De La Cruz and Maldonado were both public officials in the city of East Chicago, Indiana. De La Cruz was a member of the City Council. Maldonado was the City Controller, which made him the chief fiscal officer for the City. His signature appeared on all checks paid with City money. Maldonado was also a member of the Board of Works, which was responsible for approving all public works projects.

In 1998, the Board of Works began soliciting bids for specific work to be done on the City's sidewalks. Under Indiana law, any project estimated to cost more than $75,000 must be publicly bid. A flat bid of $454,155 was received for the project from a company called Reith-Riley in June. Given the amount of work solicited, that bid came out to $5.08 per foot. No action was taken on this bid. Instead, the City Engineer at that time ordered the work to be done on a piecemeal basis, in amounts lower than $75,000.

A. The 1999 Sidewalk Program

In February of 1999, Maldonado attended a meeting of the Board of Works along with a new City Engineer, Pedro Porras.1 Prior to that meeting, Maldonado asked Porras to ask the Board to advertise bids for work on public sidewalks. Porras obliged, even though he had no such plans before the meeting. The Board approved, and even hired an engineering consultant to oversee the prospective sidewalk plan. But the plan never got off the ground, and in March of 1999 it was postponed indefinitely.

Despite the absence of an approved plan, sidewalks were being poured in East Chicago. Several contractors were at work, despite the fact that many of them had never worked on sidewalks before. The contractors were operating without the formal approval of the Board of Works and without complying with the procedural requirements necessary to begin a city project. The orders to pour concrete came from a number of sources, including De La Cruz and Frank Kollintzas, president of the City Council.2

The work was not limited to sidewalks. Contractors also poured new driveways, patios, basketball courts, boat pads, and swimming pools—all on private property. A number of private businesses had their parking lots redone. Other residents had their trees trimmed for free.

All of this work was done against the backdrop of a primary election scheduled for May 4, 1999. Kollintzas, De La Cruz, and the Mayor of East Chicago all faced primary battles. Kollintzas would knock on doors in his district, introduce himself as a councilman and then offer free concrete. Residents openly supporting Kollintzas, the Mayor, and their political allies were provided free services, while those supporting the political opposition were refused. Millions of dollars worth of work was performed in a ten-week period between March and May of 1999. In the

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days leading up to the election, contractors were working 10 to 15 hours a day, 6 to 7 days a week.

Despite the fact that he was City Engineer, Porras was first informed about the concrete work through citizen complaints and from Kollintzas. Kollintzas directed Porras to provide concrete work to specific contractors. Porras did so only after conferring with Maldonado and being assured by Maldonado that the City would handle all the bills. From March to May of 1999, Maldonado's office issued millions of dollars worth of checks to pay for the work, including work done on private property.

De La Cruz frequently authorized and supervised concrete work. He, in fact, had work done at his home, including a driveway, steps, and a walkway. One East Chicago resident, who had campaign signs up for the political opposition, witnessed work in her neighbor's yard and asked De La Cruz if she too would receive new concrete. De La Cruz told her she had the wrong sign up.

After the election, the City was faced with the daunting prospect of paying all the contractors and finishing up the work. On the day of the election, the City's bank account was overdrawn by...

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