United States v. Buncich

• Decision Date: 05 June 2019
• Docket Number: No. 18-1216,18-1216
• Citation: 926 F.3d 361
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. John BUNCICH, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

926 F.3d 361

UNITED STATES of America, Plaintiff-Appellee,

v.John BUNCICH, Defendant-Appellant.

No. 18-1216

United States Court of Appeals, Seventh Circuit.

Argued March 26, 2019

Decided June 5, 2019

Rehearing and Rehearing En Banc Denied July 3, 2019

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

Kerry Clementine Connor, Attorney, Highland, IN, for Defendant-Appellant.

Before Bauer, Rovner, and Brennan, Circuit Judges.

Bauer, Circuit Judge.

John Buncich was the Sheriff of Lake County, Indiana. He was charged by a grand jury with five counts of wire fraud and one count of accepting bribes. He was found guilty on all six counts. For the reasons that follow, we vacate his conviction on Counts I-III, affirm as to Counts IV-VI, and remand for resentencing.

BACKGROUND

John Buncich was elected Sheriff of Lake County, Indiana, and took office on January 1, 2011. He named Timothy Downs his Chief of Police, the highest ranking officer under the sheriff. The sheriff was responsible for providing the county police with towing services. Buncich created a list of twelve tow operators and assigned each to a defined territory. Some operators were assigned to specific police units and some were responsible for completing certain assignments such as heavy towing—the towing of semi trucks and other large vehicles. Buncich was the final decision maker regarding territories and assignments.

Buncich held an annual campaign fundraiser called "Summer Fest" and directed Downs and other subordinates to sell tickets to the event. Towing companies were specifically targeted by the individuals selling tickets.¹ Downs collected the ticket sales revenue and gave it to Buncich; he testified that he would not have kept his job if he refused to sell tickets.

The county’s second largest tower was Willie Szarmach of CSA Towing. Szarmach and CSA contributed to Buncich to ensure a spot on the tow list. During the campaign Szarmach gave $ 500 cash to Buncich through an intermediary and CSA gave the campaign a check for $ 2,000, the maximum allowed by Indiana law. (Szarmach also gave cash above that limit.) After the election, Buncich assigned Szarmach light and heavy towing territories near Gary, Indiana. CSA was assigned gang unit towing shortly after Szarmach gave $ 1,000 cash to Buncich; CSA was also given towing territory assigned to other companies whose owners either paid only by check or declined to buy tickets entirely.

Scott Jurgensen, who owned Samson Relocation & Towing, was assigned the auto theft towing detail. About five months after Samson began towing, Downs approached Jurgensen about making payments. The two largest towers told Jurgensen they were paying off Buncich.

On April 8, 2014, Jurgensen met with Downs at a restaurant. (Unbeknownst to Downs, Jurgensen had become a confidential informant for the FBI.) Jurgensen told Downs he would pay "five hundred cash, two thousand dollar check like I did last time." He asked Downs if he could get a rival company’s territory for another $ 2,500. Downs told him everything was "fair game" after the upcoming Democratic primary in May. Jurgensen gave him a check and cash; Downs said that he would "still need more after May."

In June, Jurgensen and Szarmach met with Downs and expressed an interest in increasing their territory. They asked if Buncich was planning on "trim[ming] down the flock." Downs said "some people that weren’t very friendly [will] probably bite the dust," but they would likely have to wait until after the November election to get more of the auto detail. Szarmach said he could provide $ 10,000 with no paper trail.

The trio met again on October 8, 2014, when Downs told Jurgensen he was selling Democratic fundraiser tickets. Downs said he did not "like to pressure anybody into anything" and that a purchase "don’t gotta be big." He also said he no longer sold tickets to S & S, another towing company, because he believed its owner tried to record him.

The next day Downs informed Jurgensen and Szarmach that Buncich had decided to take all heavy towing away from S & S and give it to Szarmach. He also showed them fundraiser tickets that Buncich was "real interested in" and they agreed to pay $ 2,500. On October 14, 2014, Jurgensen and Szarmach each gave Downs $ 500 cash and a check for $ 2,000 made out to the Lake County Central Democratic Committee. When they asked how much the county’s largest tower, Jerry Kundich had paid, Downs said that Kundich dealt with Buncich directly.

Buncich sent out an email regarding "CSA’s newly revised towing district" on June 1, 2015. Two days later Jurgensen provided Downs with $ 2,500 cash for twenty-five tickets to Buncichs’s campaign fundraiser. He asked if he would be "safe and left alone on the Lake County tow list" and Downs assured he would be until Downs himself ran for sheriff. After the meeting Downs was confronted by FBI agents and agreed to cooperate with the investigation.

A few days later Downs met with Szarmach and Kundich who each gave him $ 2,500 cash. On July 15, 2015, Downs gave $ 7,500 he had collected from Jurgensen, Szarmach, and Kundich to Buncich. When Downs asked Buncich about Jurgensen he responded that he "don’t have to worry about nothing."

In March 2016, Buncich met Jurgensen and Szarmach at the Delta Restaurant. Szarmach desired a newly available towing assignment related to Gary ordinance enforcement. Buncich said he was removing one of their competitors, DC Towing, from the list and that "[y]ou take care of your friends."

On April 22, 2016, Jurgensen and Szarmach paid Buncich for the Gary towing assignment. The men parked their trucks at Delta. After Buncich pulled into the parking lot Szarmach stepped out of his truck and left the door open with $ 3,500 cash resting on the driver’s seat. He asked Buncich, "Did you see my new truck?" and Buncich took the envelope off the seat. Jurgensen, less theatrically, handed Buncich an envelope with $ 2,500, which he pocketed. During lunch, Szarmach asked Buncich for a towing assignment with the Indiana University Northwest campus police. Buncich agreed and Szarmach was later informed that he was on the University tow list.

Jurgensen and Szarmach complained that the officer in charge of Gary code enforcement, Niko Zairis, had not called in many tows. Buncich told them they did not have to pay the county a $ 50 franchise fee on tows; Szarmach responded that not paying the fee would allow for more "sponsorship."

On July 21, 2016, the trio once again met at Delta where Jurgensen gave Buncich $ 2,500 cash. Buncich asked if they wanted any tickets; Szarmach asked for 25 and Jurgensen declined. Szarmach said he would also give Buncich a $ 1,000 check and $ 2,500 cash at the fundraiser. Szarmach asked what Buncich could do for Jurgensen in the New Chicago territory, which Jurgensen shared with Tow Central. Tow Central was soon removed from the New Chicago towing list, leaving the entire territory to Jurgensen. The trio also discussed replacing Zairis. Buncich addressed the money problem by assigning an officer to spend five days a week searching for cars to tow in Gary.

On September 2, 2016, Jurgensen met Buncich at Delta. He gave Buncich $ 7,500 cash and asked him to ensure that he remained the sole tow company on the New Chicago list. Buncich pocketed the envelope and said, "We’ll make it work. You got it." Buncich asked Jurgensen to "do 500" for a fundraiser for Indiana gubernatorial candidate John Gregg and to not say anything to Szarmach about the meeting.

On October 20, 2016, Buncich met with Jurgensen and Szarmach to sell them tickets to a Democratic fundraiser. When they said they were going to "do the right thing" Buncich said he was "gonna cut down the numbers here, the firms."

In November 2016 the FBI searched Buncich’s home and office, and Szarmach’s business locations. Agents found four used and thirteen unused money bands in denominations of $ 1,000, $ 2,000 and $ 5,000.

Buncich was charged and convicted of five counts of wire fraud pursuant to 18 U.S.C. § 1343 and § 1346. Counts I-III relied on "Federal Reserve payroll funds transfer[s]" dated May 5, 2014, November 17, 2014, and August 10, 2015. Counts IV and V relied on JP Morgan Chase wire transfers dated April 8, 2014, and October 21, 2014. The Chase wire transfers correspond to the two $ 2,000 checks paid by Jurgensen. Buncich was also convicted in Count VI, of bribery in violation of 18 U.S.C. § 666(a)(1)(B). The indictment stated that Buncich had deprived Lake County of the $ 50 franchise fees for the Gary ordinance tows.

Buncich argues on appeal that the government failed to introduce sufficient evidence to convict on the five wire fraud counts. Buncich also argues that the district court erred in admitting Exhibit 49.2, a chart showing $ 58,100 in cash deposits into Buncich’s jointly-held bank account. Buncich also appeals admission of the testimony of IRS Agent Gerard Hatagan in laying a foundation for the chart and testifying that deposits with no explained source were likely from criminal activity.

A. Honest Services Wire Fraud

1. Legal Standard

We will reverse a conviction only where the record, viewed in the light most favorable to the government, is "devoid of evidence from which a reasonable jury could find guilt beyond a reasonable doubt." United States v. Durham , 645 F.3d 883, 892 (7th Cir. 2011), cert. denied, 565 U.S. 1204, 132 S. Ct. 1537, 182 L.Ed.2d 175 (2012). To establish wire fraud under 18 U.S.C. § 1343, the government must prove the defendant (1) participated in a scheme to defraud, (2) intended to defraud, and (3) used interstate wires in furtherance of the fraud. United States v. Sheneman , 682 F.3d 623, 628 (7th Cir. 2012) citing United States v. Green , 648 F.3d 569, 577–78 (7th Cir. 2011). An honest services fraud scheme covers only bribery or kickbacks. United States v Hawkins , 777 F.3d 880, 882 (7th Cir. 2015). To prevail, the government must show that...