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Untied States v. Dvorak

June 17, 1997




Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 95 CR 554 Ruben Castillo, Judge.

Before POSNER, Chief Judge, COFFEY and MANION, Circuit Judges.

COFFEY, Circuit Judge.



In April 1994, defendantappellant James Dvorak (Dvorak) pleaded guilty to accepting bribes and tax evasion while serving as Undersheriff of Cook County, Illinois from 1987 through 1989. Dvorak was sentenced on April 28, 1994 to forty-one months' incarceration. He appealed his sentence, and we affirmed. *fn1

Dvorak at the time of sentencing claimed that he was then admitting all of the illegal conduct in which he had engaged while serving as Undersheriff. *fn2 That statement has proven to be less than truthful, as Dvorak was subsequently indicted and in fact pleaded guilty to a one-count information charging him with mail fraud, which the defendant committed in the course of hiring "ghost payrollers" and hiring unqualified individuals while serving as Undersheriff during the same time frame (1987 through 1989). In this appeal Dvorak challenges the sixty months' sentence he received for mail fraud. We affirm.

I. Background

Dvorak successfully managed James O'Grady's 1986 campaign for Sheriff of Cook County, Illinois. After O'Grady's election, in January 1987 Dvorak was appointed Undersheriff, the second highest post in the Sheriff's Department. As Undersheriff, Dvorak was responsible for making the personnel decisions in the office, including the approving as well as the hiring and promotion of employees.

Commencing in February 1987, Dvorak, with the assistance of James Hogan (Hogan), who served as Dvorak's immediate subordinate in the position of Director of Personnel, devised a two-part fraudulent hiring scheme aimed at providing jobs to individuals who were favored, for personal or political reasons, by either Dvorak or Hogan. The scheme entailed the hiring of a number of individuals in various law enforcement positions within the domain of the Sheriff's Department, despite the fact that the applicants had failed to achieve passing scores on qualifying merit examinations. To execute the plan, Dvorak would review the list of applicants Hogan provided and determine which of the individuals should be given preferential treatment. Dvorak would mark the lists to indicate the individuals he wanted to hire, and return the list to Hogan, who would in turn select others he wished to receive preferential treatment. Hogan would deliver the list to lower-level employees in the office responsible for the grading of the exams, and these employees, under orders from Dvorak and Hogan, would assign passing grades to the designated individuals even if they failed the exams. These favored individuals would thus become eligible for positions within the Sheriff's Department despite having failed to qualify. According to the Government's version of the scheme submitted at sentencing (which Dvorak did not dispute), over 300 individuals were rated as qualified and received jobs despite having failed to pass the qualifying merit exam.

Another part of the defendant's scheme consisted of the hiring and placing on the Department's payroll of individuals whom Dvorak well knew would do little or no work in their designated positions. These "ghost payrollers" were usually either friends or relatives of people who had assisted Dvorak in his political career, or individuals who had worked for or supported O'Grady's campaign, and Dvorak put them on the Department's payroll to reward their political support. To facilitate the plan, Dvorak directed Hogan to place the names of the "ghost payrollers" on time sheets under the heading of "Security" or "Undersheriff," fill in fraudulent work hours, forge their signatures, and sign Hogan's name as verification. Dvorak arranged for seventeen individuals to be placed on the Sheriff's Office payrolls in this manner, and the individuals received a total of $550,545.87 in salary and benefits from 1987 through 1990, during which time they performed little or no work. *fn3

Dvorak resigned as Undersheriff in November 1989. Nonetheless, he continued to make recommendations concerning personnel decisions within the Sheriff's Office, including decisions relating to the "ghost payrollers," until November 1990, when Hogan resigned as Director of Personnel. Investigators from the FBI uncovered the fraudulent hiring scheme subsequent to the departure of Dvorak and Hogan from the Sheriff's Department. On September 20, 1995, some seventeen months after he was sentenced for bribery and tax evasion, Dvorak was charged by information with a single count of mail fraud in furtherance of the fraudulent hiring scheme, a charge premised upon the mailing, under Dvorak's direction, of a salary check to one of the "ghost payrollers," in violation of 18 U.S.C. sec. 1341 and sec. 1346. *fn4

In describing the fraudulent hiring scheme, the information alleged that Dvorak "hired individuals to work at jobs for which they were not qualified and [also] hired and retained 'ghost payrollers.'" Dvorak pleaded guilty to mail fraud, as charged in the information, without the benefit of a plea agreement.

At sentencing, the district court found that Dvorak's adjusted offense level under sec. 2F1.1 of the Sentencing Guidelines was twenty. *fn5 On motion of the Government, and over Dvorak's objection, the judge imposed a four-level upward departure based upon two findings. First, the judge found that "the risk of putting unqualified people on the payroll [of the Sheriff's Department]" warranted a twolevel upward departure. He based this finding on Application Note 10(a) to Guideline sec. 2F1.1, which states that an upward departure is appropriate when "the fraud caused or risked reasonably foreseeable, substantial non-monetary harm." Second, he found that the hiring of unqualified individuals caused "harm to the public's trust in the Cook County Sheriff's Department." The trial judge thus departed upward two more levels based on Application Note 10(e) to Guideline sec. 2F1.1, which authorizes a departure when "the offense caused a loss of confidence in an important institution."

The Government also sought an increase in Dvorak's criminal history category pointing out to the court his previous conviction and sentence for accepting bribes and tax evasion. As noted, Dvorak pleaded guilty in 1994 to two federal criminal counts, bribery and tax evasion, and was serving time for those offenses when he was charged with mail fraud in connection with the fraudulent hiring scheme. *fn6 The Government argued that the bribery and tax evasion offenses were separate and distinct criminal offenses unrelated to the fraudulent hiring scheme, and therefore the convictions could be counted in determining Dvorak's criminal history category. The defendant-appellant disagreed and claimed that the bribery and tax ...

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