Cantrell Loses Appeal Of Honest Services Conviction
Law 360
August 13, 2010
Law360, New York (August 13, 2010, 3:36 PM EDT)
A federal appeals court has upheld the honest services fraud convictions of Robert J. Cantrell, a former municipal employee in Indiana who was found guilty in 2008 of taking kickbacks from a contractor in exchange for steering work to the company.
A three-judge panel of the U.S. Court of Appeals for the Seventh Circuit upheld Cantrell's convictions Wednesday on four counts of honest services fraud, saying the charge was appropriate despite a recent decision by the U.S. Supreme Court scaling back the kinds of cases to which the statute can be applied.
In a trio of public corruption appeals decided in June — in particular that of former Enron Corp. CEO Jeffrey Skilling — the high court ruled that the mail fraud statute's honest services fraud provision was too broad and that it should be applied only to cases of bribery and kickbacks.
The ruling overturned Skilling's honest services fraud conviction. On the same logic, the court also overturned convictions on the statute for former media magnate Conrad Black and former Alaska state Rep. Bruce Weyhrauch.
Later in June the high court also vacated honest services fraud convictions against former HealthSouth Corp. CEO Richard Scrushy and former Alabama Gov. Don Siegelman.
But in Cantrell's case, the appeals court did not buy his argument that the statute was unconstitutionally vague, finding that his conviction should stand.
“By failing to fairly, honestly and candidly award contracts, Cantrell defrauded North Township and its citizens of their right to his honest services,” Judge Terence T. Evans wrote for the panel. “This was clearly a kickback scheme, so [the honest services fraud statute] — even as paired down by Skilling — applies to Cantrell.”
A jury in the U.S. District Court for the Northern District of Indiana also found Cantrell guilty of filing false income tax returns and of insurance fraud for deceptively procuring coverage for two of his children.
Cantrell did not appeal those convictions. But he did appeal his 78-month sentence, arguing unsuccessfully that the trial judge applied an incorrect sentencing guideline and failed to properly consider mitigating factors — in particular his military service — that could have shortened the length of time he should serve in prison.
From about 2000 to 2006, Cantrell held various government positions for North Township in Lake County, Ind., including a job as an office manager and a position as a liaison to the township trustee.
He landed in hot water when he helped steer contracts to Addiction and Family Care Inc., a provider of counseling services.
The company received clients on referral through various local courts as part of sentencing and probation programs. The company also got a chunk of its business from contracts with local government entities to provide counseling to their employees and clients, according to the district court complaint.
For every client Cantrell helped AFC land through the court-referral program, Cantrell would get half of the fee that AFC charged the person for counseling sessions.
Cantrell also got a kickback on government referrals, receiving 50 percent of the contract amount, usually after the deduction of fees paid to counselors. One work release program run by a local sheriff paid Cantrell $2,000 per month, the complaint said.
A call for comment to Cantrell's attorney was not immediately returned.
The case was decided by Circuit Judges Evans and Richard A. Posner and Chief Judge Frank H. Easterbrook.
Cantrell is represented by Bertig & Associates.
The case is United States v. Robert J. Cantrell, case number 09-1856, in the U.S. Court of Appeals for the Seventh Circuit.
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