United States v. Jarigese
| Decision Date | 02 June 2021 |
| Docket Number | No. 20-1485,20-1485 |
| Citation | 999 F.3d 464 |
| Parties | UNITED STATES of America, Plaintiff-Appellee, v. Michael JARIGESE, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Steven J. Dollear, Attorney, Office of the United States Attorney, Chicago, IL, for Plaintiff - Appellee.
Adam J. Sheppard, Attorney, Sheppard Law Firm, P.C., Kenneth L. Cunniff, Attorney, SmithAmundsen LLC, Chicago, IL, for Defendant - Appellant.
Before Rovner, Hamilton, and St. Eve, Circuit Judges.
A jury convicted Michael Jarigese of nine counts of wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346, and one count of bribery, in violation of 18 U.S.C. § 666(a)(2). The district court sentenced him to forty-one months' imprisonment and three years of supervised release. He challenges both his conviction and his sentence. We affirm.
Michael Jarigese was the vice president of Castle Construction Corporation ("Castle"), and the president of its successor company, Tower Contracting LLC ("Tower"), when he signed three contracts with the City of Markham for public construction projects. Castle and Tower were owned and operated by members of the Blum family. Each of the Markham contracts were designated by the City's mayor, David Webb, as "design-build" projects, which meant that they were not subject to a public bidding process. Instead, Mayor Webb had the authority to invite one or more contractors to submit a proposal, which was then presented to the City Council for approval before the Mayor signed the contract.
For the first project, Webb invited only Castle to submit a proposal to build a new city hall. In 2008, Markham awarded the city hall contract to Castle. Webb signed the $8.3 million contract on behalf of the City, and Jarigese, in his capacity as vice president, signed for Castle. In 2010, Webb invited only Tower to submit a proposal to build a senior living facility, and through the same process, Markham awarded a $10.5 million contract to Tower, with Webb again signing for Markham, and Jarigese signing this time as president of Tower. Tower's profit margin on the senior living facility contract was approximately $2.6 million, or twenty-four percent of the contract price. In 2012, again using the same process, Markham awarded another contract to Tower for the renovation and expansion of a park district building. Mayor Webb signed the $3.4 million contract on behalf of the City and Jarigese signed as president of Tower. Tower's profit on the park district project was approximately $1.2 million, or more than a third of the contract price.
In January 2012, when the senior living facility was near completion but before Markham awarded the park district building project to Tower, Mayor Webb met in person with Jarigese. Webb asked Jarigese to submit a proposal for the park district project so that Webb could use the contract price to determine the amount of money Markham would need to raise through bonds to finance the project. Webb pointed out to Jarigese that Tower (and Castle) had already been involved in two big projects (meaning the city hall and the senior living facility), and that a third project was coming up. Webb then solicited a bribe, asking Jarigese for $100,000. Jarigese replied that he would look into it and get back to him. Webb understood this to mean that Jarigese needed to consult with the Blum family before agreeing to the request. Robert Blum was Castle's president and chief executive officer. Robert's son, Anthony, was Tower's chief executive officer, and his other son, Philip, was Tower's vice president. Robert's wife, Nancy, was the controller of Tower, and the mother of Anthony and Philip.
A few days after Webb's request, Jarigese met with him again and asked who to make the check out to. Webb told him to write the check to KAT Remodeling, and provided a post office box as the address of the payee. Webb later testified that he had formed KAT Remodeling years earlier with the intention of starting a business with his children, whose names he used to form the acronym "KAT." The business, incorporated by one of his children, never got off the ground, however, and Webb instead used the company's bank account as a repository for the bribes he solicited. KAT Remodeling never performed any work of any kind, and the vast majority of the money in KAT Remodeling's bank account, which had been opened by one of Webb's children, came from Jarigese and another contractor who paid bribes to Webb.
In mid-February 2012, Jarigese hand-delivered to Webb a check made out to KAT Remodeling in the amount of $75,000. The check, which was signed by Anthony Blum, contained the address that Webb had given Jarigese for the business. At this same meeting, Jarigese showed Webb an invoice from KAT Remodeling, telling Webb it described the work that KAT completed for Tower. Webb understood Jarigese to mean that Jarigese had created the invoice to disguise the nature of the $75,000 payment. Webb assumed that the $75,000 check was a partial payment on the $100,000 that he had requested and considered it to be "a great start." Over the following months, Jarigese delivered cash to Webb on four or five occasions, concealing as much as $2500 in a coffee cup at each delivery. Jarigese obtained the cash from Nancy Blum, telling her multiple times that he was going to meet with Webb, and asking her to make out checks to cash. Anthony Blum approved the checks, which Nancy then cashed for Jarigese. Finally, in May 2013, after Tower completed the park building project, Jarigese delivered a $10,000 check to Webb, again payable to KAT Remodeling. Jarigese asked Tower employees to prepare the check and falsely accounted for it in Tower's business records as a donation to a Markham festival. Anthony Blum approved the check.
Jarigese was not the only person paying bribes to Webb related to contracts with the City of Markham. Evidence at trial showed that Webb also solicited a bribe from Thomas Summers, the owner of Alsterda Cartage & Construction, after awarding Alsterda a contract in 2008 for sewer and water main projects. Webb told Summers that Summers had a "big job here," and that Webb "needed some money." Summers subsequently paid Webb approximately $170,000 in checks and cash. The first payment was a personal check for $30,000 from Summers payable to KAT Remodeling. But KAT Remodeling never performed any work for Summers. After receiving the check, Webb used his mayoral authority to award additional public work to Alsterda. From 2009 through 2011, Summers gave Webb four additional checks totaling $106,245, payable to KAT Remodeling, "Kats [sic] Investments" and "Kats [sic]." None of these entities performed any work in exchange for these sums. Summers disguised another bribe payment by writing a check for $28,770 to Webb's son. On the memo line of the check, Summers indicated that the payment was for a Ford truck, but Summers never received a truck, and this was simply another way to hide the true nature of the transaction. Summers also supplied Webb with smaller cash payments of $2,000 or less in this same time frame.
Finally, Joseph Letke also paid bribes to Webb in exchange for work with Markham. Letke owned a company named Public Funding Enterprise, and also worked as a consultant and comptroller for Markham. Letke supplied cash to Webb and also a $15,000 check from Public Funding Enterprise to "Katz [sic] Investments." With Letke's assistance, Webb had formed a company called KAT Realty Investments and had his son and daughter open a bank account for the company. Like KAT Remodeling, the company never did any work, and Webb used the bank account to receive bribes from Letke and Summers.
As a result of this conduct, Webb was charged with wire fraud and filing a false tax return. Webb agreed to cooperate with the government and pleaded guilty to both counts. Jarigese and Tower were charged in a superseding indictment ("Indictment") with nine counts of wire fraud and one count of bribery. The Indictment charged that Tower and Jarigese participated with Webb, Summers and others in a scheme to defraud Markham of money, property, and the intangible right of Webb's honest services. In describing the scheme, the Indictment alleged that Webb solicited bribes in exchange for using his authority as mayor to award the park building project to Tower. The Indictment specified that Jarigese caused Tower to issue bribery payments to Webb disguised as payments to KAT Remodeling. Each of the nine wire fraud counts against Tower and Jarigese alleged that the defendants, for the purpose of executing that bribery scheme, caused payments to be sent from the accounts of the City of Markham to Tower's account at First Midwest Bank, in partial payment for the work Tower performed on the park building project. The tenth count, for bribery, alleged that Tower and Jarigese gave cash to Webb and a $10,000 check payable to KAT Remodeling with the intent to influence and reward Webb for using his authority in connection with the park building project.
Webb testified against Jarigese and Tower. The government also presented corroborating documentary evidence and additional witnesses. The jury found Jarigese guilty on all of the charged counts.1 The district court sentenced Jarigese to a term of forty-one months' imprisonment, at the low end of the guidelines range. Jarigese appeals.
Jarigese challenges both his sentence and his conviction on appeal. On the sentence, he argues that: (1) the district court failed to comply with Federal Rule of Criminal Procedure 32(i)(A)(1) when it did not verify that Jarigese had read the presentence report ("PSR") and discussed it with his attorney; (2) the court erred when it did not adopt the PSR at the sentencing hearing but later indicated that it had adopted the PSR in the written Statement of Reasons attached to the judgment; (3) the court relied on a clearly erroneous fact at sentencing;...
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