United States v. Michael Jarigese ( 2021 )

In the
United States Court of Appeals
For the Seventh Circuit
No. 20-1485
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
MICHAEL JARIGESE,
Defendant-Appellant.
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 1:17-cr-00656-2 — Robert W. Gettleman, Judge.
ARGUED JANUARY 19, 2021 — DECIDED JUNE 2, 2021
Before ROVNER, HAMILTON, and ST. EVE, Circuit Judges.
ROVNER, Circuit Judge. A jury convicted Michael Jarigese of
nine counts of wire fraud, in violation of 18 U.S.C. §§ 1343 and
1346, and one count of bribery, in violation of 18 U.S.C.
§ 666(a)(2). The district court sentenced him to forty-one
months’ imprisonment and three years of supervised release.
He challenges both his conviction and his sentence. We affirm.
2 No. 20-1485
I.
Michael Jarigese was the vice president of Castle Construc-
tion Corporation (“Castle”), and the president of its successor
company, Tower Contracting LLC (“Tower”), when he signed
three contracts with the City of Markham for public construc-
tion projects. Castle and Tower were owned and operated by
members of the Blum family. Each of the Markham contracts
were designated by the City’s mayor, David Webb, as “design-
build” projects, which meant that they were not subject to a
public bidding process. Instead, Mayor Webb had the author-
ity to invite one or more contractors to submit a proposal,
which was then presented to the City Council for approval
before the Mayor signed the contract.
For the first project, Webb invited only Castle to submit a
proposal to build a new city hall. In 2008, Markham awarded
the city hall contract to Castle. Webb signed the $8.3 million
contract on behalf of the City, and Jarigese, in his capacity as
vice president, signed for Castle. In 2010, Webb invited only
Tower to submit a proposal to build a senior living facility, and
through the same process, Markham awarded a $10.5 million
contract to Tower, with Webb again signing for Markham, and
Jarigese signing this time as president of Tower. Tower’s profit
margin on the senior living facility contract was approximately
$2.6 million, or twenty-four percent of the contract price. In
2012, again using the same process, Markham awarded
another contract to Tower for the renovation and expansion of
a park district building. Mayor Webb signed the $3.4 million
contract on behalf of the City and Jarigese signed as president
of Tower. Tower’s profit on the park district project was
No. 20-1485 3
approximately $1.2 million, or more than a third of the contract
price.
In January 2012, when the senior living facility was near
completion but before Markham awarded the park district
building project to Tower, Mayor Webb met in person with
Jarigese. Webb asked Jarigese to submit a proposal for the park
district project so that Webb could use the contract price to
determine the amount of money Markham would need to raise
through bonds to finance the project. Webb pointed out to
Jarigese that Tower (and Castle) had already been involved in
two big projects (meaning the city hall and the senior living
facility), and that a third project was coming up. Webb then
solicited a bribe, asking Jarigese for $100,000. Jarigese replied
that he would look into it and get back to him. Webb under-
stood this to mean that Jarigese needed to consult with the
Blum family before agreeing to the request. Robert Blum was
Castle’s president and chief executive officer. Robert’s son,
Anthony, was Tower’s chief executive officer, and his other
son, Philip, was Tower’s vice president. Robert’s wife, Nancy,
was the controller of Tower, and the mother of Anthony and
Philip.
A few days after Webb’s request, Jarigese met with him
again and asked who to make the check out to. Webb told him
to write the check to KAT Remodeling, and provided a post
office box as the address of the payee. Webb later testified that
he had formed KAT Remodeling years earlier with the inten-
tion of starting a business with his children, whose names he
used to form the acronym “KAT.” The business, incorporated
by one of his children, never got off the ground, however, and
Webb instead used the company’s bank account as a repository
4 No. 20-1485
for the bribes he solicited. KAT Remodeling never performed
any work of any kind, and the vast majority of the money in
KAT Remodeling’s bank account, which had been opened by
one of Webb’s children, came from Jarigese and another
contractor who paid bribes to Webb.
In mid-February 2012, Jarigese hand-delivered to Webb a
check made out to KAT Remodeling in the amount of $75,000.
The check, which was signed by Anthony Blum, contained the
address that Webb had given Jarigese for the business. At this
same meeting, Jarigese showed Webb an invoice from KAT
Remodeling, telling Webb it described the work that KAT
completed for Tower. Webb understood Jarigese to mean that
Jarigese had created the invoice to disguise the nature of the
$75,000 payment. Webb assumed that the $75,000 check was a
partial payment on the $100,000 that he had requested and
considered it to be “a great start.” Over the following months,
Jarigese delivered cash to Webb on four or five occasions,
concealing as much as $2500 in a coffee cup at each delivery.
Jarigese obtained the cash from Nancy Blum, telling her
multiple times that he was going to meet with Webb, and
asking her to make out checks to cash. Anthony Blum ap-
proved the checks, which Nancy then cashed for Jarigese.
Finally, in May 2013, after Tower completed the park building
project, Jarigese delivered a $10,000 check to Webb, again
payable to KAT Remodeling. Jarigese asked Tower employees
to prepare the check and falsely accounted for it in Tower’s
business records as a donation to a Markham festival. Anthony
Blum approved the check.
Jarigese was not the only person paying bribes to Webb
related to contracts with the City of Markham. Evidence at trial
No. 20-1485 5
showed that Webb also solicited a bribe from Thomas Sum-
mers, the owner of Alsterda Cartage & Construction, after
awarding Alsterda a contract in 2008 for sewer and water main
projects. Webb told Summers that Summers had a “big job
here,” and that Webb “needed some money.” Summers
subsequently paid Webb approximately $170,000 in checks and
cash. The first payment was a personal check for $30,000 from
Summers payable to KAT Remodeling. But KAT Remodeling
never performed any work for Summers. After receiving the
check, Webb used his mayoral authority to award additional
public work to Alsterda. From 2009 through 2011, Summers
gave Webb four additional checks totaling $106,245, payable to
KAT Remodeling, “Kats [sic] Investments” and “Kats [sic].”
None of these entities performed any work in exchange for
these sums. Summers disguised another bribe payment by
writing a check for $28,770 to Webb’s son. On the memo line of
the check, Summers indicated that the payment was for a Ford
truck, but Summers never received a truck, and this was
simply another way to hide the true nature of the transaction.
Summers also supplied Webb with smaller cash payments of
$2,000 or less in this same time frame.
Finally, Joseph Letke also paid bribes to Webb in exchange
for work with Markham. Letke owned a company named
Public Funding Enterprise, and also worked as a consultant
and comptroller for Markham. Letke supplied cash to Webb
and also a $15,000 check from Public Funding Enterprise to
“Katz [sic] Investments.” With Letke’s assistance, Webb had
formed a company called KAT Realty Investments and had his
son and daughter open a bank account for the company. Like
KAT Remodeling, the company never did any work, and Webb
6 No. 20-1485
used the bank account to receive bribes from Letke and
Summers.
As a result of this conduct, Webb was charged with wire
fraud and filing a false tax return. Webb agreed to cooperate
with the government and pleaded guilty to both counts.
Jarigese and Tower were charged in a superseding indictment
(“Indictment”) with nine counts of wire fraud and one count
of bribery. The Indictment charged that Tower and Jarigese
participated with Webb, Summers and others in a scheme to
defraud Markham of money, property, and the intangible right
of Webb’s honest services. In describing the scheme, the
Indictment alleged that Webb solicited bribes in exchange for
using his authority as mayor to award the park building
project to Tower. The Indictment specified that Jarigese caused
Tower to issue bribery payments to Webb disguised as
payments to KAT Remodeling. Each of the nine wire fraud
counts against Tower and Jarigese alleged that the defendants,
for the purpose of executing that bribery scheme, caused
payments to be sent from the accounts of the City of Markham
to Tower’s account at First Midwest Bank, in partial payment
for the work Tower performed on the park building project.
The tenth count, for bribery, alleged that Tower and Jarigese
gave cash to Webb and a $10,000 check payable to KAT
Remodeling with the intent to influence and reward Webb for
using his authority in connection with the park building
project.
Webb testified against Jarigese and Tower. The government
also presented corroborating documentary evidence and
additional witnesses. The jury found Jarigese guilty on all of
No. 20-1485 7
the charged counts.1 The district court sentenced Jarigese to a
term of forty-one months’ imprisonment, at the low end of the
guidelines range. Jarigese appeals.
II.
Jarigese challenges both his sentence and his conviction on
appeal. On the sentence, he argues that: (1) the district court
failed to comply with Federal Rule of Criminal Procedure
32(i)(A)(1) when it did not verify that Jarigese had read the
presentence report (“PSR”) and discussed it with his attorney;
(2) the court erred when it did not adopt the PSR at the
sentencing hearing but later indicated that it had adopted the
PSR in the written Statement of Reasons attached to the
judgment; (3) the court relied on a clearly erroneous fact at
sentencing; (4) the cumulative effect of these first three errors
requires remand for re-sentencing; and (5) the sentence was
substantively unreasonable. In challenging his conviction,
Jarigese contends that the evidence was insufficient to convict
him, and that the court erred in admitting certain evidence that
he characterizes as irrelevant and highly prejudicial.
A.
We begin with Jarigese’s objections to the admission of
certain evidence. We review the court’s decision to admit or
exclude evidence for abuse of discretion. United States v.
Chhibber, 741 F.3d 852, 855 (7th Cir. 2014); United States v.
Simon, 727 F.3d 682, 696 (7th Cir. 2013). We will reverse and
order a new trial only if any evidentiary errors are not harm-
1
Tower was also convicted on all counts. This appeal concerns only the
conviction and sentence of Jarigese.
8 No. 20-1485
less. Simon, 727 F.3d at 696. Jarigese contends that the district
court wrongly admitted evidence of Webb’s solicitation of
bribes from Summers and Letke, neither of whom was on trial.
Jarigese argues that evidence of Webb’s prior bad acts should
not have been admitted unless it met the standards set forth in
Federal Rules of Evidence 404(b) and 403. In general, evidence
of other bad acts is “not admissible to prove a person’s
character in order to show that on a particular occasion the
person acted in accordance with the character.” Fed. R. Evid.
404(b)(1). But it may be “admissible for another purpose, such
as proving motive, opportunity, intent, preparation, plan,
knowledge, identity, absence of mistake, or lack of accident.”
Fed. R. Evid. 404(b)(2). Rule 403 allows a court to exclude
relevant evidence if its probative value is substantially out-
weighed by a danger of unfair prejudice, among other reasons.
According to Jarigese, Mayor Webb’s scheme of extorting
money from contractors engaged in business with the City of
Markham was irrelevant to the issue of whether Jarigese bribed
Webb. Jarigese also argues that this evidence was not probative
of his motive, opportunity, intent, or any other purpose listed
in the rule. Instead, he contends, to the extent that it was
relevant, it was unfairly prejudicial because it suggested that
under Webb’s administration, contractors were routinely
expected to bribe the Mayor in order to obtain contracts with
the City.
The district court correctly concluded that evidence of
Webb’s solicitation of other bribes was not evidence of “other
bad acts” but rather was directly relevant to proving the
charged scheme. That is, the Indictment charged that Webb,
Jarigese, Summers and others were engaged in a scheme to
No. 20-1485 9
defraud the City of Markham of money through Webb
soliciting and the others paying bribes in exchange for con-
tracts with the City. As alleged in the Indictment, the defen-
dants took steps to conceal the scheme by directing that checks
be made payable to KAT Remodeling, KAT Realty Invest-
ments, and to Webb’s son supposedly in exchange for work
done or goods provided, when in fact no work was done and
no goods were provided. The evidence to which Jarigese
objected thus provided proof of a fact alleged in the Indict-
ment, that the schemers attempted to conceal their unlawful
actions using KAT Remodeling and other entities and persons
to transmit the bribes to Webb. “[E]vidence of one participant’s
actions in furtherance of a scheme to defraud is admissible
against the other participants in that scheme, just as it is in a
conspiracy case.” United States v. Warner, 498 F.3d 666, 701 (7th
Cir. 2007) (quoting United States v. Adeniji, 221 F.3d 1020, 1027
(7th Cir. 2000)). The district court did not abuse its discretion
by admitting direct evidence of the scheme charged; neither
Rule 403 nor Rule 404(b) required exclusion of this evidence.
Jarigese’s challenge to the sufficiency of the evidence is
similarly without merit. When a defendant challenges the
sufficiency of the government’s evidence in a Rule 29 motion
for a judgment of acquittal, as Jarigese did below, we review de
novo, viewing the evidence in the light most favorable to the
government. United States v. Cherry, 920 F.3d 1126, 1133 (7th
Cir. 2019); United States v. Cruse, 805 F.3d 795, 811 (7th Cir.
2015). We must affirm if any rational trier of fact could have
found the elements of the crime beyond a reasonable doubt.
Cruse, 805 F.3d at 811. Jarigese primarily complains that the
government’s case was based largely on the “self-serving”
10 No. 20-1485
testimony of Mayor Webb. He argues that Webb was moti-
vated to cast blame on Jarigese in order to reduce the sentence
for his own admitted criminal conduct.
Jarigese rightly concedes that the self-serving nature of
Webb’s testimony generally is not a sufficient reason for
rejecting testimony as not credible. Payne v. Pauley, 337 F.3d
767, 771–73 (7th Cir. 2003). He contends that rejecting testi-
mony as not credible requires specific evidence such as
contradictory accounts or other impeachment evidence, citing
a few summary judgment cases. He argues that he meets that
standard here because Webb was impeached at trial regarding
previous lies he told under oath, and with evidence of other
crimes involving dishonesty. But Jarigese confuses what is
necessary to defeat summary judgment with what is necessary
to overcome a jury’s finding on credibility. The jury was
certainly free to reject Webb’s testimony, but it was also free to
credit it, and apparently it chose the latter. We do not second
guess jury determinations on credibility unless the testimony
is so implausible that it cannot be trusted as a matter of law.
United States v. Calabrese, 572 F.3d 362, 369 (7th Cir. 2009). To
meet that standard, it must have been either physically
impossible for the witness to observe that which he or she
claims occurred, or impossible under the laws of nature for the
occurrence to have taken place at all. Cherry, 920 F.3d at 1139.
Nothing in Webb’s testimony comes close to meeting this
standard. Although Jarigese also complains that another
witness suffered similar credibility problems and that the
government’s documentary evidence was thin, the jury was
free to credit this evidence, and Jarigese offers no reason
sufficient to overturn the jury’s conclusions. In short, the
No. 20-1485 11
evidence was sufficient to support the convictions on all
counts.
B.
We turn to Jarigese’s claims that the district court’s errors
at sentencing require a remand for re-sentencing. Our review
of sentencing decisions generally is limited to whether they are
reasonable, applying the abuse of discretion standard. Gall v.
United States, 552 U.S. 38, 46 (2007). We first must ensure that
the district court committed no significant procedural errors,
such as incorrectly calculating the guidelines range, failing to
consider the section 3553(a) factors, selecting a sentence based
on clearly erroneous facts, or failing to explain adequately the
chosen sentence. Gall, 552 U.S. at 51. After United States v.
Booker, 543 U.S. 220 (2005), whether the district court followed
the proper procedures in imposing sentence is a question of
law that we review de novo. We review the district court’s
findings of fact for clear error. United States v. Knox, 624 F.3d
865, 870 (7th Cir. 2010). Sentences that are within the properly
calculated guidelines range are entitled to a rebuttable pre-
sumption of reasonableness. Rita v. United States, 551 U.S. 338,
341–49 (2007); United States v. Anobah, 734 F.3d 733, 736 (7th
Cir. 2013); United States v. Mykytiuk, 415 F.3d 606, 608 (7th Cir.
2005). If the district court erred in sentencing Jarigese, we will
apply the doctrine of harmless error in determining whether
re-sentencing is necessary. United States v. Olson, 450 F.3d 655,
683 (7th Cir. 2006). An error related to the validity of a defen-
dant’s sentence is harmless only if it did not affect the district
court’s choice of sentence. Olson, 450 F.3d at 683.
12 No. 20-1485
Jarigese first argues that the district court failed to comply
with Federal Rule of Criminal Procedure 32(i)(A)(1) at his
sentencing hearing. Rule 32(i)(A)(1) requires a court to directly
question the defendant about the PSR:
The district court at the sentencing hearing need
directly ask the defendant only three ques-
tions—whether he or she has had an opportunity to
read the report, whether the defendant and defense
counsel have discussed the report and whether the
defendant wishes to challenge any facts in the
report.
United States v. Rone, 743 F.2d 1169, 1174 (7th Cir. 1984). The
government concedes that the district court neglected this
important task but contends that the error was harmless. We
have advised district courts “to carry out this brief questioning
in the interest of ‘focused, adversarial development of the
factual and legal issues relevant to determining the appropriate
Guidelines sentence.’” United States v. Rodriguez-Luna, 937 F.2d
1208, 1213 (7th Cir. 1991) (quoting Burns v. United States, 501
U.S. 129, 134 (1991)). Nevertheless, we need not remand for re-
sentencing if the “defendant’s right to a fair sentencing process
was not compromised,” i.e., if the error was harmless.
Rodriguez-Luna, 937 F.2d at 1208; Olson, 450 F.3d at 683.
Jarigese asserts that the error was not harmless because he
did not have an opportunity to contest a factual error in the
PSR on which the district court relied in sentencing him. In
particular, the PSR stated that he was the president of Castle
when in fact he was only the vice president. Although Jarigese
is correct that the PSR erroneously stated that he was president
No. 20-1485 13
of both Castle and Tower, this error was harmless for two
reasons. First, both the government and defense counsel
correctly identified Jarigese as vice president of Castle and
president of Tower during the sentencing hearing. R. 237, at 9,
16–17, 27. Second, the district court did not rely on Jarigese’s
title at either company in determining his sentence, but rather
focused on his role in signing contracts on behalf of the
companies with the City of Markham, the level of responsibil-
ity he held at both companies, and the level of trust that the
owners of the companies placed in him.
Jarigese had signed the $8.3 million contract for the city hall
project when he was vice president of Castle, indicating that he
was in a position of great trust and responsibility at Castle. The
government argued, and the court agreed, that Jarigese was
aware that Castle and Robert Blum had been convicted of
fraud but he continued to work for Castle and then Tower, and
still made the decision to pay a bribe to Webb. In particular,
Robert Blum had been convicted of tax fraud in federal court
in 2010, related to funds he had taken from Castle for his own
use. And Robert Blum and Castle had also pled guilty in 2011
to state charges for fraudulently obtaining $18 million in public
money intended for minority-owned businesses. As a result,
Castle was suspended from entering into federal contracts and
barred from performing state or city public work for five years.
The government argued in the district court that Jarigese had
a “front-row seat for all of those sanctions,” but rather than
being moved to respect the law, he decided to pay the bribe for
Tower. Jarigese has not contested the accuracy of any of that
information, and has focused only on the PSR’s error in his title
at Castle. Because it is pellucid from the record that the court
14 No. 20-1485
did not base the sentence on Jarigese’s title but rather on an
accurate portrayal of his role, level of responsibility and
position of trust at Castle and Tower during this period of
unlawful activity, the error was harmless.
None of Jarigese’s other complaints about his sentence fare
any better. He asserts that the court erred by not adopting the
PSR at the sentencing hearing but later indicating that it had
adopted the PSR in the written Statement of Reasons attached
to the judgment. There is no requirement that a court adopt the
PSR, only that the court explain in open court the reasons for
imposing the particular sentence. 18 U.S.C. § 3553(c). It is true
that the oral pronouncement of the sentence takes precedence
over the written judgment. United States v. Thompson, 777 U.S.
368, 376 (7th Cir. 2015). That means that if the court had not
adequately explained its reasons for the sentence at the oral
pronouncement, adopting the PSR in the written judgment
would not have cured the error. But the court more than
adequately explained in the oral pronouncement the reasons
for the sentence. The only prejudice asserted by Jarigese is that
he does not know whether the court considered him president
or vice president of Castle, a fact that we have just concluded
was not of any consequence in determining the sentence. Any
error in adopting the PSR in the written judgment after not
expressly adopting it at the hearing was therefore harmless.
Jarigese also complains that the court relied on a clearly
erroneous fact at sentencing, incorrectly stating that he had
called Nancy Blum as a witness at trial, and then holding
against him that he had called a witness who had perjured
herself. He is correct that the court stated that Nancy Blum lied
during her testimony and that, “you sat there, of course, and
No. 20-1485 15
let it happen. You called her.” R. 237, at 45. But immediately
after the court pronounced the sentence, the government
corrected the court and pointed out that Nancy Blum had been
called by Tower, not Jarigese. The court then noted that she
was a “defense witness,” which was correct, and said:
I appreciate the correction. But the point I was
making is that I didn’t believe her either, and obvi-
ously, the jury didn’t believe her. I think that’s
pretty plain.
R. 237, at 51. In other words, the court did not rely on this
misapprehension in setting the sentence and the misstatement
was therefore harmless. In any case, Jarigese did rely on Nancy
Blum’s testimony in his closing argument when he contended
that the payments to KAT were for legitimate work completed
by KAT, a claim supported solely by Nancy Blum’s testimony.
So the first three asserted sentencing errors are without
merit and nothing about the cumulative effect requires remand
for re-sentencing. The only remaining issue is Jarigese’s claim
that his sentence was substantively unreasonable. The court
sentenced Jarigese to the bottom of the properly calculated
guidelines range, forty-one months. Sentences that are within
the properly calculated guidelines range are entitled to a
rebuttable presumption of reasonableness on appeal. Rita, 551
U.S. at 341–49; Mykytiuk, 415 F.3d at 608. The defendant bears
the burden of rebutting that presumption by demonstrating
that the sentence is unreasonably high in light of the section
3553(a) factors. Mykytiuk, 415 F.3d at 608. Jarigese asserts that
his sentence is substantively unreasonable under section
3553(a)(6), which requires courts to consider “the need to avoid
16 No. 20-1485
unwarranted sentence disparities among defendants with
similar records who have been found guilty of similar con-
duct[.]” He cites a number of cases involving persons con-
victed of public corruption who received sentences lower than
forty-one months’ imprisonment. Jarigese forfeited this
argument by failing to raise it below, and so we review it for
plain error only. United States v. Olano, 507 U.S. 725, 731 (1993);
Fed. R. Crim. P. 52(b). Jarigese fails to identify any error, much
less plain error:
Sentencing disparities are at their ebb when the
Guidelines are followed, for the ranges are them-
selves designed to treat similar offenders similarly.
That was the main goal of the Sentencing Reform
Act. The more out-of-range sentences that judges
impose after Booker, the more disparity there will be.
A sentence within a properly ascertained range
therefore cannot be treated as unreasonable by
reference to § 3553(a)(6).
United States v. Boscarino, 437 F.3d 634, 638 (7th Cir. 2006). See
also United States v. Serfling, 504 F.3d 672, 681 (7th Cir. 2007)
(under Boscarino, a sentence within a properly calculated
guidelines range cannot be treated as unreasonable by refer-
ence to section 3553(a)(6); valid reasons exist for sentencing
similar defendants differently, and only unwarranted dispari-
ties are problematic). Jarigese has failed to identify any
unwarranted disparity between his sentence and the sentences
that other defendants received. Indeed, his descriptions of the
No. 20-1485 17
other cases demonstrate a wide range of circumstances that
provide ample reasons for the variations in the sentences.
Nothing on this record requires a remand for re-sentencing.
AFFIRMED.