United States v. Sorich, Robert

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