United States v. Robert Cantrell ( 2010 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 09-1856
U NITED S TATES OF A MERICA,
Plaintiff-Appellee,
v.
R OBERT J. C ANTRELL,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Indiana, Hammond Division.
No. 2:07-cr-00044-RL-PRC-1—Rudy Lozano, Judge.
A RGUED M AY 24, 2010—D ECIDED A UGUST 11, 2010
Before E ASTERBROOK, Chief Judge, and P OSNER and
E VANS, Circuit Judges.
E VANS, 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
2 No. 09-1856
Russell” 1 during Michigan’s 1964 Final Four run, a long-
time 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 guide-
line and failed to address his arguments for leniency.
Cantrell also preserved a challenge to his four convic-
tions on the honest services fraud counts on the grounds
that 18 U.S.C. § 1346 is unconstitutionally vague. No chal-
lenge is lodged against the three insurance fraud or the
four tax counts under which he was convicted.
1
Russell went on to become the first pick in the 1966 draft and
spent twelve seasons in the NBA. He was on the 1970
Knicks team that beat the Lakers in the NBA finals.
http://en.wikipedia.org/wiki/Cazzie_Russell (last visited July 6,
2010).
No. 09-1856 3
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. ___, 2010 WL 2518587 (2010),
Black v. United States, 561 U.S. ___, 2010 WL 2518593 (2010),
and Weyhrauch v. United States, 561 U.S. ___, 2010 WL
2518696 (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, 2010 WL 2518587, at *27.
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 *28 n.44,
the Court ultimately held that, “[i]nterpreted to encom-
pass only bribery and kickback schemes, § 1346 is not
unconstitutionally vague.” Id. at *30.
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
2
North Township is a unit of government (the executive is the
township trustee) covering the cities of Hammond, East Chi-
cago, Whiting, Highland, and Munster. It is the second
largest township in the state and is responsible for poor
relief, among other things. North Township Trustee,
http://www.northtownshiptrustee.com (last visited July 6, 2010).
4 No. 09-1856
the proceeds from the contracts. By failing to fairly,
honestly, and candidly award contracts, Cantrell de-
frauded 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 cal-
culations at sentencing. United States v. Garrett, 528 F.3d
525, 527 (7th Cir. 2008). As a result, Cantrell must estab-
lish 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 Intan-
gible 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
No. 09-1856 5
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 em-
bezzlement, we held that the defendants could be con-
victed 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. (ex-
plaining 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 kick-
backs)”).
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
3
In arguing that his conduct did not involve kickbacks, Cantrell
trumpets the fact that the first contract between AFC and
North Township predated his employment with the latter.
This is immaterial, however, because the renewal contracts,
whose terms were engineered by Cantrell, postdated his hiring.
6 No. 09-1856
statute by arguing that McNally v. United States, 483 U.S.
350 (1987), which spurred Congress to enact § 1346, 4
primarily involved nondisclosure of a conflicting finan-
cial 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 gen-
erated by public contracts.
Skilling, 2010 WL 2518587, at *28 (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 sentencing procedures
were followed is a question of law subject to de novo
review. United States v. Mendoza, 510 F.3d 749, 754 (7th
Cir. 2007). Proper procedures include calculating the
4
In McNally, the Court held that the scheme at issue did not
qualify as mail fraud because § 1341 was limited to the pro-
tection of property rights. Congress responded by enacting
§ 1346, which overruled McNally. See Skilling, 2010 WL
2518587, at *25.
No. 09-1856 7
guidelines range, analyzing the § 3553(a) factors, basing
the sentence on accurate facts, and explaining the rea-
soning. United States v. Omole, 523 F.3d 691, 697 (7th Cir.
2008).
Cantrell argues that the district judge failed to address
certain factors he cited in favor of a below-guideline
sentence—mainly, his age and decorated military career.
Cantrell’s argument regarding his age is curious, as
the district judge explicitly considered that factor:
I considered the guidelines in this case. I find it to be
fair. If anything, I thought of a higher sentence, and
I did not go to the higher sentence or deviate higher
because of your age. I did take that into consideration.
. . . I also considered before making this sentence
the life expectancy of individuals as given by the
[actuarial] tables.
The judge also mentioned Cantrell’s accomplishments,
noting that he “had a good career at the University of
Michigan,” “got [him]self a doctorate degree,” “move[d]
up in the school systems,” “[was] a fairly good daddy,”
and “helped individuals.” Although the judge did not
specifically reference Cantrell’s military career, this was
not required. See United States v. Paige, ___ F.3d ___, 2010
WL 2652455, at *1 (7th Cir. July 6, 2010) (collecting cases
supporting the proposition that “we regularly affirm
sentences where the district judge does not explicitly
mention each mitigation argument raised by the defen-
dant”).
The district judge was required, however, to explain
why the sentence was appropriate in light of Cantrell’s
8 No. 09-1856
arguments. And that he did. The judge rejected Cantrell’s
argument that he was a good father noting that he put
his children in harm’s way by fraudulently procuring
health insurance on their behalf. The judge was also
bothered by the length of time (about six years) that
Cantrell was involved in criminal activity. And the
judge noted that Cantrell’s cut from AFC ($68,000) was
significant and could have been used by the township
to help the poor. Finally, the judge explained that
although Cantrell helped several individuals through-
out his life, it appeared that, in many cases, he did so to
further his own interests. Thus, there is no evidence
that the district judge committed procedural error or
otherwise acted unreasonably in imposing a within-
guideline sentence.
For these reasons, the judgment of the district court
is A FFIRMED.
8-11-10