Sheriff’s Bribery Convictions Partially Upheld: U.S. v. Buncich, Seventh Circuit Court of Appeals, Decided June 5, 2019

Sheriff John Buncich of Lake County, Indiana was convicted of honest services wire fraud and accepting bribes to guarantee business for tow companies. The Seventh Circuit Court of Appeals reversed three of the wire fraud convictions but affirmed two other wire fraud convictions and the bribery conviction.

What is “honest services wire fraud,” and what were the facts that led to a Sheriff’s conviction for bribery?

Although they held that it was harmless error, the Seventh Circuit also found that information presented at Buncich’s trial regarding unexplained money in his bank account was inadmissible “propensity evidence” under Rule 404(b). What is propensity evidence and how did it affect Buncich’s case?

How Does a Sheriff End Up in Prison for Bribery?

Sheriff Buncich was sentenced to 15 years and eight months in federal prison after a jury convicted him of taking bribes to secure “territories” for towing companies in his county, although his sentence could be reduced as a result of the three counts that the Seventh Circuit Court of Appeals reversed.

Timothy Downs, Buncich’s former second-in-command, was tasked with taking “contributions” from towing companies, sometimes in the form of fundraiser ticket sales and other times in the form of cash payments, to secure their territories where they would have exclusive rights to tow vehicles.

According to the appellate opinion, at other times Buncich personally accepted cash payments and communicated to Downs or tow truck companies that their territories would be guaranteed in exchange for the payments. In some cases, tow truck companies who refused to make cash payments would lose their territories which would then be given to other companies who made cash contributions.

At one point, Buncich assigned an officer to spend five days a week searching for cars that one of his largest contributors could tow, discussed replacing a code enforcement officer who was not calling in enough tows, and allowed his contributors to waive a 50$ franchise fee on tows that would have gone to the county.

Unbeknownst to Buncich, at least one tow truck company representative that he was communicating with and then Downs were approached by the FBI and became informants, video-recording transactions, statements made by Buncich, and even the exchange of cash payments.

What is Honest Services Wire Fraud?

Wire fraud is defined in 18 USC Section 1343, and requires proof that the defendant:

  1. Participated in a scheme to defraud;
  2. Intended to defraud; and
  3. Used interstate wire transfers to commit the fraud.

Section 1343 states:

Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both.

18 USC Section 1346 defines a “scheme or artifice to defraud” as a “ scheme or artifice to deprive another of the intangible right of honest services.”

Honest services fraud is intended to prohibit bribery of public officials or kickbacks in exchange for consideration – “the government must show that the bribe in question ‘entail[ed] a plan to change how the employee or agent does his job.’”

Without discussion, the Seventh Circuit reversed the first three wire fraud convictions because the government agreed on appeal that “the evidence presented to the trial court failed to establish the wire transfers that were the basis of Counts I‐III.”

Based on evidence including the recordings made by the codefendants and the testimony at trial, the Seventh Circuit found that there was sufficient evidence to prove that the payments made to Buncich were in exchange for official acts (granting territory to towing companies), and so they affirmed those convictions:

The jury concluded that the April 2014 check was a quid pro quo bribe for maintaining Jurgensen’s territory. It also concluded that the October 2014 check was given in exchange for expanding the heavy tow boundary for Szarmach. These conclusions were rationally based on the evidence presented, and the guilty verdict is affirmed as to Counts IV and V.

Rule 404(b) Propensity Evidence

Buncich also appealed the admission of “a chart showing that $58,100 in cash was deposited into Buncich’s jointly‐held account between April 2014 and September 2016,” along with an agent’s testimony that the source of the cash was illegal activity because the agent was unable to identify a legitimate source of the cash.

The Seventh Circuit found that, although evidence of unexplained wealth is admissible depending on the circumstances, in this case, the prejudicial effect of the evidence outweighed its probative value.

When is Unexplained Wealth Admissible?

The Seventh Circuit explains that:

Unexplained wealth evidence is admissible where (1) the evidence presented creates an inference that the defendant was involved with the crime; (2) the unexplained wealth was acquired during the period in which the crime allegedly occurred; and (3) the government presents other evidence to support the charge, including evidence that the income was not obtained through legitimate means.

Rule 404(b) prohibits the admission of evidence to show propensity – “to prove a person’s character in order to show that on a particular occasion the person acted in accordance with the character,” although propensity evidence may be admissible if there is a separate, legitimate reason for the evidence.

Even when there is another legitimate purpose, however, the evidence is prohibited by Rule 403 if its probative value is outweighed by the danger of “unfair prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or needlessly presenting cumulative evidence.” Prejudice in this context means the danger of a jury convicting a person for the wrong reasons…

The Court found that the evidence, even if it was appropriate evidence of unexplained wealth, was not admissible under Rules 404(b) and 403:

The prejudice substantially outweighed the probative value of the exhibit, particularly when considered in conjunction with Hatagan’s testimony that money in the account was derived from illegal sources. The government presented no evidence that the money in excess of the $26,000 described in the indictment was an illicit gain from criminal activity.

The Court found that the admission of the chart was “harmless error,” however, and did not justify reversing the remaining convictions:

The court’s mistake in admitting Exhibit 49.2 and Agent Hatagan’s testimony was, however, harmless. “The test for harmless error is whether, in the mind of the average juror, the prosecution’s case would have been significantly less persuasive had the improper evidence been excluded.” United States v. Stewart, 902 F.3d 664, 683 (7th Cir. 2018) (citations omitted). The other evidence presented to the jury was extensive. Buncich was videotaped receiving large cash payments from Jurgensen and Szarmach. He subsequently increased Szarmach’s heavy towing territory and directed his personnel to increase the amount of tows made under the “Gary ordinance towing” unit for the benefit of Jurgensen and Szarmach. Campaign records showed that the checks were deposited into campaign accounts, while the cash payments were not.

Although Buncich’s convictions for three of the six counts were affirmed, he may be resentenced to less time in prison when his case is remanded to the district court.

White Collar Criminal Defense Attorney in Columbia, SC

Elizabeth Franklin-Best is a federal white collar criminal defense and federal appeals lawyer located in Columbia, SC.

For more information, call us at (803) 331-3421 or send us an email to set up a consultation about your case.