### In the



# United States Court of Appeals

For the Seventh Circuit

No. 18

‐ 1216

U NITED S TATES OF A MERICA

, Plaintiff

‐ Appellee

,

v.

J OHN B UNCICH

, Defendant

‐ Appellant.

Appeal from the United States District Court for the

Northern District of Indiana, Hammond Division.

No. 2:16

‐ cr

‐ 00161

‐ JTM

‐ JEM

‐ 1

— James T. Moody

, Judge.

A RGUED M ARCH 26, 2019

— D ECIDED J UNE 5, 2019

Before B AUER

, R OVNER

, and B RENNAN

, Circuit Judges

.

B AUER

, Circuit Judge. John Buncich was the Sheriff of Lake

County, Indiana. He was charged by a grand jury with five

counts of wire fraud and one count of accepting bribes. He was

found guilty on all six counts. For the reasons that follow, we

vacate his conviction on Counts I

‐ III, affirm as to Counts IV

‐ VI,

and remand for resentencing.2 No. 18

‐ 1216

BACKGROUND

John Buncich was elected Sheriff of Lake County, Indiana,

and took office on January 1, 2011. He named Timothy Downs

his Chief of Police, the highest ranking officer under the sheriff.

The sheriff was responsible for providing the county police

with towing services. Buncich created a list of twelve tow

operators and assigned each to a defined territory. Some

operators were assigned to specific police units and some were

responsible for completing certain assignments such as heavy

towing—the towing of semi trucks and other large vehicles.

Buncich was the final decision maker regarding territories and

assignments.

Buncich held an annual campaign fundraiser called

“Summer Fest” and directed Downs and other subordinates to

sell tickets to the event. Towing companies were specifically

targeted by the individuals selling tickets. 1 Downs collected the

ticket sales revenue and gave it to Buncich; he testified that he

would not have kept his job if he refused to sell tickets.

The county’s second largest tower was Willie Szarmach of

CSA Towing. Szarmach and CSA contributed to Buncich to

ensure a spot on the tow list. During the campaign Szarmach

gave $500 cash to Buncich through an intermediary and CSA

gave the campaign a check for $2,000, the maximum allowed

by Indiana law. (Szarmach also gave cash above that limit.)

After the election, Buncich assigned Szarmach light and heavy

1 When Buncich was elected the Lake County Democratic Chairman in

2014, he also instructed Downs to sell tickets to Democratic party fund

‐

raisers.No. 18

‐ 1216 3

towing territories near Gary, Indiana. CSA was assigned gang

unit towing shortly after Szarmach gave $1,000 cash to

Buncich; CSA was also given towing territory assigned to other

companies whose owners either paid only by check or declined

to buy tickets entirely.

Scott Jurgensen, who owned Samson Relocation & Towing,

was assigned the auto theft towing detail. About five months

after Samson began towing, Downs approached Jurgensen

about making payments. The two largest towers told Jurgen

‐

sen they were paying off Buncich.

On April 8, 2014, Jurgensen met with Downs at a restau

‐

rant. (Unbeknownst to Downs, Jurgensen had become a

confidential informant for the FBI.) Jurgensen told Downs he

would pay “five hundred cash, two thousand dollar check like

I did last time.” He asked Downs if he could get a rival com

‐ pany’s territory for another $2,500. Downs told him everything

was “fair game” after the upcoming Democratic primary in

May. Jurgensen gave him a check and cash; Downs said that he

would“still need more after May.”

In June, Jurgensen and Szarmach met with Downs and

expressed an interest in increasing their territory. They asked

if Buncich was planning on “trim[ming] down the flock.”

Downs said “some people that weren’t very friendly [will]

probably bite the dust,” but they would likely have to wait

until after the November election to get more of the auto detail.

Szarmach said he could provide $10,000 with no paper trail.

The trio met again on October 8, 2014, when Downs told

Jurgensen he was selling Democratic fundraiser tickets. Downs

said he did not “like to pressure anybody into anything” and4 No. 18

‐ 1216

that a purchase “don’t gotta be big.” He also said he no longer

sold tickets to S & S, another towing company, because he

believed its owner tried to record him.

The next day Downs informed Jurgensen and Szarmach

that Buncich had decided to take all heavy towing away from

S & S and give it to Szarmach. He also showed them fundraiser

tickets that Buncich was “real interested in” and they agreed to

pay $2,500. On October 14, 2014, Jurgensen and Szarmach each

gave Downs $500 cash and a check for $2,000 made out to the

Lake County Central Democratic Committee. When they asked

how much the county’s largest tower, Jerry Kundich had paid,

Downs said that Kundich dealt with Buncich directly.

Buncich sent out an email regarding “CSA’s newly revised

towing district” on June 1, 2015. Two days later Jurgensen

provided Downs with $2,500 cash for twenty

‐ five tickets to

Buncichs’s campaign fundraiser. He asked if he would be “safe

and left alone on the Lake County tow list” and Downs

assured he would be until Downs himself ran for sheriff. After

the meeting Downs was confronted by FBI agents and agreed

to cooperate with the investigation.

A few days later Downs met with Szarmach and Kundich

who each gave him $2,500 cash. On July 15, 2015, Downs gave

$7,500 he had collected from Jurgensen, Szarmach, and

Kundich to Buncich. When Downs asked Buncich about

Jurgensen he responded that he “don’t have to worry about

nothing.”

In March 2016, Buncich met Jurgensen and Szarmach at the

Delta Restaurant. Szarmach desired a newly available towing

assignment related to Gary ordinance enforcement. BuncichNo. 18

‐ 1216 5

said he was removing one of their competitors, DC Towing,

from the list and that “[y]ou take care of your friends.”

On April 22, 2016, Jurgensen and Szarmach paid Buncich

for the Gary towing assignment. The men parked their trucks

at Delta. After Buncich pulled into the parking lot Szarmach

stepped out of his truck and left the door open with $3,500 cash

resting on the driver’s seat. He asked Buncich, “Did you see

my new truck?” and Buncich took the envelope off the seat.

Jurgensen, less theatrically, handed Buncich an envelope with

$2,500, which he pocketed. During lunch, Szarmach asked

Buncich for a towing assignment with the Indiana University

Northwest campus police. Buncich agreed and Szarmach was

later informed that he was on the University tow list.

Jurgensen and Szarmach complained that the officer in

charge of Gary code enforcement, Niko Zairis, had not called

in many tows. Buncich told them they did not have to pay the

county a $50 franchise fee on tows; Szarmach responded that

not paying the fee would allow for more “sponsorship.”

On July 21, 2016, the trio once again met at Delta where

Jurgensen gave Buncich $2,500 cash. Buncich asked if they

wanted any tickets; Szarmach asked for 25 and Jurgensen

declined. Szarmach said he would also give Buncich a $1,000

check and $2,500 cash at the fundraiser. Szarmach asked what

Buncich could do for Jurgensen in the New Chicago territory,

which Jurgensen shared with Tow Central. Tow Central was

soon removed from the New Chicago towing list, leaving the

entire territory to Jurgensen. The trio also discussed replacing

Zairis. Buncich addressed the money problem by assigning an6 No. 18

‐ 1216

officer to spend five days a week searching for cars to tow in

Gary.

On September 2, 2016, Jurgensen met Buncich at Delta. He

gave Buncich $7,500 cash and asked him to ensure that he

remained the sole tow company on the New Chicago list.

Buncich pocketed the envelope and said, “We’ll make it work.

You got it.” Buncich asked Jurgensen to “do 500 ʺ for a

fundraiser for Indiana gubernatorial candidate John Gregg and

to not say anything to Szarmach about the meeting.

On October 20, 2016, Buncich met with Jurgensen and

Szarmach to sell them tickets to a Democratic fundraiser. When

they said they were going to “do the right thing” Buncich said

he was “gonna cut down the numbers here, the firms.”

In November 2016 the FBI searched Buncich’s home and

office, and Szarmach’s business locations. Agents found four

used and thirteen unused money bands in denominations of

$1,000, $2,000 and $5,000.

Buncich was charged and convicted of five counts of wire

fraud pursuant to 18 U.S.C. § 1343 and § 1346. Counts I

‐ III

relied on “Federal Reserve payroll funds transfer[s]” dated

May 5, 2014, November 17, 2014, and August 10, 2015. Counts

IV and V relied on JP Morgan Chase wire transfers dated

April 8, 2014, and October 21, 2014. The Chase wire transfers

correspond to the two $2,000 checks paid by Jurgensen.

Buncich was also convicted in Count VI, of bribery in violation

of 18 U.S.C. § 666(a)(1)(B). The indictment stated that Buncich

had deprived Lake County of the $50 franchise fees for the

Gary ordinance tows.No. 18

‐ 1216 7

Buncich argues on appeal that the government failed to

introduce sufficient evidence to convict on the five wire fraud

counts. Buncich also argues that the district court erred in

admitting Exhibit 49.2, a chart showing $58,100 in cash

deposits into Buncich’s jointly

‐ held bank account. Buncich also

appeals admission of the testimony of IRS Agent Gerard

Hatagan in laying a foundation for the chart and testifying that

deposits with no explained source were likely from criminal

activity.

A. Honest Services Wire Fraud

1. Legal Standard

We will reverse a conviction only where the record, viewed

in the light most favorable to the government, is “devoid of

evidence from which a reasonable jury could find guilt beyond

a reasonable doubt.” United States v. Durham

, 645 F.3d 883,

892 (7th Cir. 2011), cert. denied, 132 S. Ct. 1537 (2012). To

establish wire fraud under 18 U.S.C. § 1343, the government

must prove the defendant (1) participated in a scheme to

defraud, (2) intended to defraud, and (3) used interstate wires

in furtherance of the fraud. United States v. Sheneman

, 682 F.3d

623, 628 (7th Cir. 2012) citing United States v. Green

, 648 F.3d

569, 577–78 (7th Cir. 2011). An honest services fraud scheme

covers only bribery or kickbacks. United States v Hawkins

, 777

F.3d 880, 882 (7th Cir. 2015). To prevail, the government must

show that the bribe in question “entail[ed] a plan to change

how the employee or agent does his job.” Id.8 No. 18

‐ 1216

2. Analysis

Both parties agree the evidence presented to the trial court

failed to establish the wire transfers that were the basis of

Counts I

‐ III. Buncich’s conviction on Counts I–III is hereby

reversed.

Sufficient evidence, however, supports Buncich’s wire

fraud convictions on Count IV and Count V. Buncich argues

that the wire transfers dated April 8, 2014, and October 21,

2014, were not proven to be “anything more than a campaign

contribution.” On the contrary, from the record here a rational

jury could conclude that these payments were made to Buncich

in exchange for official acts. “The exchange of an official act for

money violates federal law, no matter how the recipient uses

the cash.” United States v. Smith

, 816 F.3d 479, 480 (7th Cir.

2016).

Jurgensen testified that donating to the Buncich campaign

was necessary to maintain his towing assignments. After

Jurgensen gave the check in April 2014, Buncich assured

Downs that Jurgensen “don’t have to worry about nothing.”

Other towing companies who failed to buy their full allotment

of campaign tickets had territory taken away.

Downs told Jurgensen and Szarmach that Buncich intended

to remove towing companies and that those who “weren’t very

friendly” would “probably bite the dust.” Szarmach and

Jurgensen gave Downs $1,000 cash plus checks including the

one described in Count V. Buncich then moved the heavy tow

boundary, increasing Szarmach’s tows and the profits of both

men.No. 18

‐ 1216 9

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.

B. Rule 404(b) Evidence

1. Legal Standard

Rule 404(b) excludes evidence of other crimes, wrongs, or

acts if the purpose is to show a person ʹ s propensity to behave

in a certain way, but other

‐ act evidence may be admitted for

“another purpose” including, but not limited to, “proving

motive, opportunity, intent, preparation, plan, knowledge,

identity, absence of mistake, or lack of accident.” United States

v. Gomez

, 763 F.3d 845, 855 (7th Cir. 2014) (en banc). The Rule

excludes evidence if its relevance to “another purpose” is

established only through the forbidden propensity inference.

Id. at 856. The admission must be supported by some

“propensity

‐ free chain of reasoning.” Id. The district court

“should not just ask whether the proposed other

‐ act evidence is

relevant to a non

‐ propensity purpose but how exactly the

evidence is relevant to that purpose—or more specifically, how

the evidence is relevant without relying on a propensity

inference.” Id

.

If the proponent demonstrates that the evidence is relevant

to a legitimate purpose, the district court must then use

Rule 403 to determine “whether the probative value of the

other

‐ act evidence is substantially outweighed by the risk of

unfair prejudice,” taking into account “the extent to which the10 No. 18

‐ 1216

non

‐ propensity fact for which the evidence is offered actually

is at issue in the case.” United States v. Brewer

, 915 F.3d 408, 415

(7th Cir. 2019).

We review Rule 404(b) decisions for an abuse of discretion.

United States v. Norweathers

, 895 F.3d 485, 490 (7th Cir. 2018)

(citing United States v. Schmitt

, 770 F.3d 524, 532 (7th Cir. 2014)).

Under this standard we will defer to the district court “unless

no reasonable person could adopt its view.” Id

. Even if we

make such a finding, reversal is only warranted “if the average

juror would find the prosecution ʹ s case significantly less

persuasive without the improper evidence.” Id.

2. Analysis

Exhibit 49.2 was a chart showing that $58,100 in cash was

deposited into Buncich’s jointly

‐ held account between April

2014 and September 2016. Agent Hatagan laid a foundation for

the admission of the exhibit. Hatagan also reviewed Buncich’s

income and concluded that the source of the cash was illegal

activity—Hatagan could not find any legitimate source for the

cash.

The district court initially denied the government’s motion

to admit Exhibit 49.2. The court concluded that the deposits

into Buncich’s account were too “remote in time, that they

can’t possibly bear any relevance to the alleged bribes” and

“the amounts vary too wildly from the alleged bribes to be

probative.” The court also noted that “the danger of unfair

prejudice to the Defendant and the danger of misleading the

jury and causing them to speculate and concern themselves

with matters unrelated to this case, [is] just too great for me to

admit it.” The court then limited the allowed evidence to thoseNo. 18

‐ 1216 11

deposits related to the $26,000 paid by Jurgensen and

Szarmach between April 8, 2014, and September 22, 2016.

Buncich took the stand in his own defense. He denied ever

taking bribes and claimed that Downs never gave him cash

from Jurgensen or Szarmach. He also denied taking the $3,500

off the seat of Szarmach’s truck. The government filed a new

motion to admit Exhibit 49.2, seeking to introduce the chart to

rebut Buncich’s testimony regarding how he handled pay

‐

ments. The court granted the government’s motion and

admitted Exhibit 49.2 into evidence.

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. United States v.

Cardena

, 842 F.3d 959, 983 (7th Cir. 2016). Relying on a series

of cases mostly involving large scale drug conspiracies, the

district court concluded that “large unexplained amounts of

cash are indicative of criminal activity.” See United States v.

Hogan

, 886 F.2d 1497 (7th Cir. 1989), United States v. Penny

, 60

F.3d 1257 (7th Cir. 1995), United States v. Harris

, 536 F.3d 798,

811 (7th Cir. 2008). The court concluded that “the highly

probative value of this evidence for purposes of rebutting the

defendant’s self

‐ described practices regarding his handling of

cash is not outweighed by any danger of unfair prejudice to the

defendant.” We disagree.12 No. 18

‐ 1216

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. We

required such evidence in Cardena and it is of particular

importance here where the account at issue is a joint bank

account. As the deposits shown in the chart were well in excess

of the amount of bribes Buncich was charged with, the exhibit

and Hatagan’s testimony were propensity evidence not

submitted for any purpose permitted by Rule 404(b).

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 ʹ 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.

Buncich’s explanations were not persuasive. He claimed he

did not take the cash out of Szarmach’s truck, but only leaned

in to inspect it. Buncich claimed the $7,500 he received fromNo. 18

‐ 1216 13

Jurgensen was actually an improperly documented campaign

loan repayment, but other loan repayments were meticulously

documented. Buncich also claimed that another $2,500 was

paid by Jurgensen as a campaign donation, but that the cash

payment was deposited in separate transactions with Jurgen

‐

sen listed as an “anonymous” donor. The jury rejected these

explanations. Determinations of a witness ʹ s credibility are to be

made by the jury, and “we will not

... second

‐ guess the jury ʹ s

credibility determinations.” United States v. Lawson

, 810 F.3d

1032, 1039 (7th Cir. 2016)

.

The cash payments documented in Exhibit 49.2 and the

testimony of Agent Hatagan would not have significantly

altered the weight given to the rest of the evidence, nor would

it have changed the mind of the average juror. The other

evidence presented was sufficient to support the jury’s guilty

verdict.

CONCLUSION

The district court’s error in the admission of the Rule

404(b) evidence was harmless, and the jury’s guilty verdicts on

Counts IV

‐ VI are affirmed. The jury’s guilty verdicts on

Counts I

‐ III are reversed, and the case is remanded for further

action consistent with this opinion.