U.S.A v. Cantrell

• Decision Date: 11 August 2010
• Docket Number: No. 09-1856.,09-1856.
• Citation: 617 F.3d 919
• Parties: UNITED STATES of America, Plaintiff-Appellee,v.Robert J. CANTRELL, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

617 F.3d 919

UNITED STATES of America, Plaintiff-Appellee,v.Robert J. CANTRELL, Defendant-Appellant.

No. 09-1856.

United States Court of Appeals, Seventh Circuit.

Argued May 24, 2010.

Decided Aug. 11, 2010.

Rehearing and Rehearing En Banc Denied Nov. 10, 2010.

Daniel L. Bella, argued, Office of the United States Attorney, Hammond, IN, for Plaintiff-Appellee.

Bryan M. Truitt, argued, Bertig & Associates, Valparaiso, IN, for Defendant-Appellant.

Before EASTERBROOK, Chief Judge, and POSNER and EVANS, Circuit Judges.

EVANS, Circuit Judge.

During his lifetime, which spans almost 70 years, Robert Cantrell accomplished many things. In a brief on this appeal, his attorney writes that “Cantrell is an Indiana legend and hero.” The brief goes on (for many pages) noting that Cantrell was a college baseball and basketball star “feeding assists to Cazzie Russell” ¹ during Michigan's 1964 Final Four run, a longtime teacher, a decorated war veteran, a beloved husband, father, and grandfather, a mentor to needy students, and a well-known public servant in Indiana. Unfortunately, during the past decade, Cantrell also got into some serious trouble. Specifically, a jury found that he committed honest services fraud, using his position in public office to steer contracts to a third party in exchange for kickbacks (a cut of the proceeds from the contracts), in violation of 18 U.S.C. §§ 1341 and 1346. He also committed insurance fraud, deceptively procuring coverage for two of his children, in violation of 18 U.S.C. § 1341. And he filed false income tax returns, failing to report the kickbacks, in violation of 26 U.S.C. § 7206(1). As punishment for his eleven counts of conviction, Cantrell received concurrent sentences of 78 months' imprisonment. The sentence was within the guideline range for his convictions. He now appeals, arguing primarily that his sentence was improper because the district judge applied an incorrect guideline and failed to address his arguments for leniency. Cantrell also preserved a challenge to his four convictions on the honest services fraud counts on the grounds that 18 U.S.C. § 1346 is unconstitutionally vague. No challenge is lodged against the three insurance fraud or the four tax counts under which he was convicted.

Although this is primarily a sentencing appeal, we begin by briefly addressing Cantrell's preserved argument regarding his § 1346 conviction. While this case was pending on appeal, the Supreme Court decided Skilling v. United States, 561 U.S. ----, 130 S.Ct. 2896, 177 L.Ed.2d 619 (2010) Black v. United States, 561 U.S. ----, 130 S.Ct. 2963, 177 L.Ed.2d 695 (2010), and Weyhrauch v. United States, 561 U.S. ----, 130 S.Ct. 2971, 177 L.Ed.2d 705 (2010), all of which involved the honest services statute. In Skilling, the most comprehensive of the three opinions, the Court observed that “[t]he ‘vast majority’ of the honest-services cases involved offenders who, in violation of a fiduciary duty, participated in bribery or kickback schemes.” Skilling, --- U.S. ----, ----, 130 S.Ct. 2896, 2930, 177 L.Ed.2d 619. Based on this observation and a desire to avoid “taking a wrecking ball to a statute that can be salvaged through a reasonable narrowing interpretation,” id. at 2931 n. 44, the Court ultimately held that, “[i]nterpreted to encompass only bribery and kickback schemes, § 1346 is not unconstitutionally vague.” Id. at 2933.

The indictment charged Cantrell with using his position as a public official of North Township of Lake County, Indiana,² to secure contracts for Addiction and Family Care, Inc. (AFC), a counseling company owned by an acquaintance, Nancy Fromm, in exchange for a share of the proceeds from the contracts. By failing to fairly, honestly, and candidly award contracts, Cantrell defrauded North Township and its citizens of their right to his honest services. This was clearly a kickback scheme, so § 1346-even as pared down by Skilling-applies to Cantrell. As he presents no other challenge to his convictions, they will not be disturbed.

Cantrell primarily raises two sentencing issues, which involve the district judge's application of U.S.S.G. § 2C1.1 and his consideration of Cantrell's arguments for leniency. Our review of the former is only for plain error, as Cantrell failed to object to the guideline calculations at sentencing. United States v. Garrett, 528 F.3d 525, 527 (7th Cir.2008). As a result, Cantrell must establish that the district judge committed error, that is plain, and that affected his substantial rights. United States v. Baretz, 411 F.3d 867, 875 (7th Cir.2005).

Cantrell claims that the district judge should have applied U.S.S.G. § 2B1.1, entitled, “Larceny, Embezzlement, and Other Forms of Theft; ...,” instead of U.S.S.G. § 2C1.1, entitled, “Offering, Giving, Soliciting, or Receiving a Bribe; ... Fraud Involving the Deprivation of the Intangible Right to Honest Services of Public Officials; ...,” because his conduct was more akin to simple theft than honest services fraud. He justifies his position almost exclusively on our decision in United States v. Orsburn, 525 F.3d 543 (7th Cir.2008). There, Teresa Orsburn-who was appointed to keep records and write checks by the township's trustee, her husband, Michael-wrote checks to her husband using erasable ink. After the checks had been deposited and mailed back to the office, Teresa replaced Michael's name with that of a legitimate payee. While Orsburn involved nothing more than embezzlement, we held that the defendants could be convicted under 18 U.S.C. § 1341 because the checks were mailed. Id. at 545. But we concluded that applying U.S.S.G. § 2C1.1 was erroneous because the defendants' actual conduct did not include bribery or any closely related offense. Id. at 546.

In contrast, and as we previously noted, Cantrell did not just steal money from North Township. Rather, he used his position at North Township to steer contracts and renewals to a third party, AFC, which compensated Cantrell with proceeds from the contracts.³ This is a kickback scheme under 18 U.S.C. § 1346 and therefore comes within the ambit of U.S.S.G. § 2C1.1. See id. (explaining that § 1346 was not necessary to the Orsburns' conviction but rather “was devised to deal with people who took cash from third parties (via bribes or kickbacks)”).

Nor did Cantrell merely fail to disclose a conflicting financial interest. Our conclusion here is supported by a discussion in Skilling. There, the government attempted to preserve the full breadth of the honest services statute by arguing that McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987), which spurred Congress to enact § 1346, ⁴ primarily involved nondisclosure of a conflicting financial interest. The Skilling Court rejected that argument, observing that McNally actually involved a “classic” kickback scheme:

A public official, in exchange for routing Kentucky's insurance business through a middleman company, arranged for that company to share its commissions with entities in which the official held an interest. This was no mere failure to disclose a conflict of interest; rather, the official conspired with a third party so that both would profit from wealth generated by public contracts.

Skilling, --- U.S. ----, ----, 130 S.Ct. 2896, 2931, 177 L.Ed.2d 619 (citations omitted). The conduct here is analogous to the description of McNally. Accordingly, we find no error in the application of U.S.S.G. § 2C1.1.

Lastly, we turn to Cantrell's complaint that the district judge failed to consider his arguments for leniency at sentencing. Whether appropriate...