In the

United States Court of Appeals

For the Seventh Circuit

____________

Nos. 03-1110, 03-1113 & 03-1195

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

MICHAEL SPANO, SR., EMIL SCHULLO,

and JAMES INENDINO,

Defendants-Appellants.

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Appeals from the United States District Court for

the Northern District of Illinois, Eastern Division.

No. 01 CR 30—Ruben Castillo, Judge.

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ARGUED JANUARY 20, 2004—DECIDED MARCH 24, 2005

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Before CUDAHY, KANNE, and EVANS, Circuit Judges.

KANNE, Circuit Judge. A jury found Emil Schullo, the

Director of Public Safety for the Town of Cicero, Illinois,

guilty of accepting a bribe valued at $5000 or more in

violation of 18 U.S.C. § 666(a)(1)(B), and of the theft of at

least $5000 from a federally funded program in violation of

§ 666(a)(1)(A). His co-defendants, Michael Spano and James

Inendino, were charged and convicted of, among other

offenses, paying the bribe in violation of § 666(a)(2), and
2 Nos. 03-1110, 03-1113 & 03-1195

aiding and abetting the theft in violation of 18 U.S.C. § 2

and § 666(a)(1)(A). The jury also found all three men guilty

of conspiring to embezzle, steal, or obtain by fraud monies

owned by an organization receiving federal funds, namely,

the Town of Cicero, under 18 U.S.C. § 371 and

§ 666(a)(1)(A).

Schullo’s responsibilities as Cicero’s Director of Public

Safety included oversight of the town’s police, fire, and health

departments. The charges in this case arose out of a private

investigation initiated by Schullo to determine whether three

police officers lived outside of Cicero’s boundaries in

violation of a town ordinance. The ordinance required that

town employees, including police officers and firefighters,

live within the town limits. The investigation was allegedly

prompted by a formal labor grievance filed by the town’s

firefighters, who initially discovered that the three police

officers lived outside Cicero. The firefighters’ grievance

claimed that the residency requirement for town employees

was being applied disparately and that they too should be

allowed to live outside Cicero’s boundaries.

Evidence at trial showed that the Town of Cicero paid

$75,831.24 for the investigation commissioned by Schullo—

an investigation that in reality had only $34,456.90 of “legitimate” expenses associated with it and which apparently

was never used in resolving the firefighters’ grievance. The

remaining $41,374.34 paid by the town was divided up among

the various co-conspirators, including Schullo, Spano, and

Inendino.

The defendants in this consolidated appeal argue, as they

did below, that § 666 is unconstitutional, either on its face

or as applied to them, and thus their convictions must

necessarily be vacated.
Nos. 03-1110, 03-1113 & 03-1195 3

1 The parties here stipulated that the Town of Cicero received in

excess of $10,000 from the federal COPS (“Community-Oriented

Policing Services”) program, a program intended to help put more

police on the streets in Cicero. The defendants argue that the

theft/bribe at issue here had no impact on the COPS program

funding.

I. Analysis

At the heart of the defendants’ constitutional challenges

to § 666 is the contention that the statute is void for failure

to require a connection between the alleged theft/bribe and

the federal funds received by the town. Broadly stated, to

establish a case under § 666, the government need only

prove that an agent of an organization, state, local, or Indian

tribal government (or any agency thereof) was offered or

accepted a bribe worth $5000 or more (see § 666(a)(1)(B)) or

stole that amount (see § 666(a)(1)(A)) and that the organization, government, or agency received $10,000 under a

federal program in any one-year period (see § 666(b)).1

 We

previously have held, without addressing the constitutionality of § 666, that a plain reading of the statute requires no

nexus between the bribe and the federal funds received—in

other words, the bribe need not be linked to federal funds to

violate the law. See United States v. Grossi, 143 F.3d 348, 350

(7th Cir. 1998); United States v. Fernandez, 282 F.3d 500, 511

(7th Cir.), cert. denied, 537 U.S. 1028 (2002). With regard to

their as-applied challenge, the defendants assert that we

are wrong not to read a nexus requirement into § 666.

The defendants mount their facial challenge against § 666

under United States v. Lopez, 514 U.S. 549 (1995), and

United States v. Morrison, 529 U.S. 598 (2000), two cases

that struck down federal statutes regulating gun possession

near schools and gender-motivated violence, respectively.

The statutes at issue in those cases were enacted under the

Commerce Clause. Critical to the Supreme Court’s unconsti-
4 Nos. 03-1110, 03-1113 & 03-1195

2 The Supreme Court granted certiorari in Sabri during the briefing of this matter. The defendants acknowledged in their reply

brief that the issue to be answered in Sabri “expressly addresses”

the matters raised here on appeal. We note that the petitioner in

Sabri challenged only § 666(a)(2) and that the defendants challenge § 666 as a whole, having been convicted under, variously,

§§ 666(a)(1)(A), (a)(1)(B), and (a)(2). However, we see no reason for

any differentiation in analysis among the (a)(1) and (a)(2) charges,

which are basically two sides of the same coin (agents stealing

federal funds/accepting bribes versus giving bribes to agents), and

defendants do not argue otherwise. Further, nothing in the

Supreme Court’s Sabri opinion leads us to a different conclusion.

In particular we note that the Supreme Court stated it granted

certiorari to resolve a circuit split “over the need to require a

connection between forbidden conduct and federal funds” and then

goes on to list cases from various circuits demonstrating the split.

Sabri, 124 S. Ct. at 1945. Those cases all involved the application

(continued...)

tutionality determination in those two cases was the finding

that the effects on interstate commerce of the activities

Congress attempted to ban were too attenuated to warrant

federal oversight. See Lopez, 514 U.S. at 561; Morrison, 529

U.S. at 615-17. The defendants claim that the same is true

here: Congress, which purported to enact § 666 under the

Spending Clause, did not sufficiently tie the theft/bribe to

federal monies and, as a result, failed to supply the necessary

justification for federal criminalization of such actions.

Alternatively, the defendants argue that Congress, in enacting § 666, improperly exceeded its enumerated powers

under either or both the Spending Clause and the Necessary

and Proper Clause of the Constitution. U.S. CONST. art. I.

All of the defendants’ arguments were dispositively rejected by the Supreme Court in its recent decision, Sabri v.

United States, 124 S. Ct. 1941 (2004). Sabri held § 666(a)(2)

to be facially constitutional and found that no nexus between the bribe and federal funds is required.2

 Id. at 1945.
Nos. 03-1110, 03-1113 & 03-1195 5

2 (...continued)

of § 666(a)(1)(B)—agents demanding or accepting bribes—not

§ 666(a)(2), the provision under which petitioner Sabri was

indicted. See, e.g., Grossi, 143 F.3d at 348 (stating that Grossi

“demanded and received bribes,” a § 666(a)(1)(B) offense); United

States v. Lipscomb, 299 F.3d 303, 308 (5th Cir. 2002) (defendant

convicted under § 666(a)(1)(B)); United States v. Zwick, 199 F.3d

672, 675 (3d Cir. 1999) (same); United States v. Santopietro, 166 F.3d

88, 91 (2d Cir. 1999) (same), all cited in Sabri, 124 S. Ct. at 1945.

We therefore conclude that the Supreme Court did not intend to

limit its holding to § 666(a)(2), would find § 666(a)(1) constitutional on the same grounds, and would similarly find no nexus

requirement for § 666(a)(1) offenses.

In Sabri, the Supreme Court readily found, contrary to

the defendants’ position, that § 666(a)(2)’s enactment was

a valid exercise of Congress’s Article I powers:

Congress has authority under the Spending Clause

to appropriate federal monies to promote the general

welfare, Art. I, § 8, cl. 1, and it has corresponding authority under the Necessary and Proper Clause, Art. I,

§ 8, cl. 18, to see to it that taxpayer dollars appropriated

under that power are in fact spent for the general welfare, and not frittered away in graft or on projects

undermined when funds are siphoned off or corrupt

public officers are derelict about demanding value for

dollars. Congress does not have to sit by and accept the

risk of operations thwarted by local and state improbity.

Section 666(a)(2) addresses the problem at the sources

of bribes, by rational means, to safeguard the integrity

of the state, local and tribal recipients of federal dollars.

Id. at 1946 (internal citations omitted). The Court also

found that the legislative record confirmed Congress acted

appropriately within the Necessary and Proper Clause

when enacting § 666. Id. at 1947 (“Congress’s decision to

enact § 666 only after other legislation had failed to protect
6 Nos. 03-1110, 03-1113 & 03-1195

federal interests is further indication that it was acting

within the ambit of the Necessary and Proper Clause.”).

The Supreme Court also specifically rejected petitioner

Sabri’s reliance on the Lopez/Morrison line of cases, which

defendants here echo. The Court noted that the statutes at

issue in Lopez and Morrison failed because of their clear lack

of a direct connection to commerce or any sort of economic

enterprise and because the nexus articulated by Congress—

preservation of social prosperity and productivity—expanded Commerce Clause authority beyond limit. Sabri,

124 S. Ct. at 1947. The Court distinguished § 666(a)(2) from

the Lopez and Morrison statutes by finding a direct link

between § 666(a)(2) and congressional spending power:

No piling [of inferences] is needed here to show that

Congress was within its prerogative to protect spending

objects from the menace of local administrators on the

take. The power to keep a watchful eye on expenditures

and on the reliability of those who use public money is

bound up with congressional authority to spend in the

first pace, and Sabri would be hard pressed to claim, in

the words of the Lopez Court, that § 666(a)(2) “has

nothing to do with” the congressional spending power.

Id.

Finally, although Sabri involved a facial constitutional

challenge only, the opinion also forecloses the defendants’

as-applied challenge. The defendants argue that to be convicted under § 666, the government had to prove a connection between the theft/bribe and the COPS program funding

received by the town. In granting certiorari, the Court specifically noted our position, outlined in Grossi, that no nexus

is required between the forbidden conduct and the federal

monies to support a conviction under § 666. Sabri, 124 S. Ct.

at 1945. The Court subsequently approved our reasoning in

Grossi that no direct connection is necessary, because any

misuse of funds covered by the statute ultimately affects the

monies provided by the federal government:
Nos. 03-1110, 03-1113 & 03-1195 7

It is true . . . that not every bribe or kickback offered or

paid to agents of governments covered by § 666(b) will

be traceably skimmed from specific federal payments,

or show up in the guise of a quid pro quo for some

dereliction in spending a federal grant. But this possibility portends no enforcement beyond the scope of

federal interest, for the reason that corruption does not

have to be that limited to affect the federal interest.

Money is fungible, bribed officials are untrustworthy

stewards of federal funds, and corrupt contractors do

not deliver dollar-for-dollar value. Liquidity is not a

financial term for nothing; money can be drained off

here because a federal grant is pouring in there. And

officials are not any the less threatening to the objects

behind federal spending just because they may accept

general retainers.

Id. at 1946 (citations omitted); cf. Grossi, 143 F.2d at 350

(“Yet money is fungible and its effect transcends program

boundaries. The general assistance program has more to

spend on welfare (or dangle as a lure for bribes) if the federal government meets some of the Township’s other expenses.”). Therefore, the district court was correct in finding

that a nexus between the theft/bribe and the federal funds

received by the Town of Cicero was not an element of the

crimes with which the defendants were charged.

Based on the Supreme Court’s Sabri opinion, we find 18

U.S.C. § 666 constitutional on its face and as applied to

the defendants. Because the other issues raised by the

defendants hinge on a finding that § 666 is unconstitutional,

we need not address them.

One final matter we must address, however, is the effect

of the recent Court decision in United States v. Booker, 125

S. Ct. 738 (2005), on the defendants’ sentences. In Booker,

the Court reaffirmed the holding of Apprendi v. New Jersey,

530 U.S. 466 (2000), and extended its principles to the fed-
8 Nos. 03-1110, 03-1113 & 03-1195

eral Sentencing Guidelines, holding that “[a]ny fact (other

than a prior conviction) which is necessary to support a

sentence exceeding the maximum authorized by the facts

established by a plea of guilty or a jury verdict must be

admitted by the defendant or proved to a jury beyond a

reasonable doubt.” Booker, 125 S. Ct. at 756. In its remedial

holding, the Court excised the mandatory provisions of the

Guidelines. See id. at 757. As a result, district courts now

have the discretion to sentence outside the ranges set in the

Guidelines, and we review these sentences for reasonableness. See id. at 765-66.

The defendants failed to raise in the district court an

Apprendi-based objection to their sentences. Accordingly,

we review for plain error. “Under [the plain error] test, before an appellate court can correct an error not raised at

trial, there must be (1) error, (2) that is plain, and (3) that

affect[s] substantial rights.” United States v. Cotton, 535

U.S. 625, 631 (2002) (citation and internal quotation marks

omitted). “If all three conditions are met, an appellate court

may then exercise its discretion to notice a forfeited error,

but only if (4) the error seriously affect[s] the fairness, integrity, or public reputation of judicial proceedings.” Id.

The record discloses that all three defendants received

sentences mandated by the Guidelines and increased on the

basis of facts found by the judge, not the jury—in other

words, their sentences were imposed under a sentencing

scheme that we now know is unconstitutional. Their sentences, therefore, were imposed in error, and the error is

plain. See United States v. Paladino, No. 03-2296, 2005

WL 435430, at *7 (7th Cir. Feb. 25, 2005). We cannot

determine, however, whether the defendants would have received the same sentences had the district court been free

to exercise the broad sentencing discretion now afforded in

the wake of Booker. In short, we are unable to resolve

whether the defendants’ substantial rights were affected

when they received sentences imposed under the mandatory

Guidelines system.
Nos. 03-1110, 03-1113 & 03-1195 9

As we concluded in Paladino, the “only practical way . . .

to determine whether the kind of plain error argued in these

cases has actually occurred is to ask the district judge.”

Paladino, 2005 WL 435430, at *10. To that end, we “order

a limited remand to permit the sentencing judge to determine whether he would . . . reimpose his original sentence.”

Id. If the district court determines that the defendants

would have received the same sentences, we will conclude

that the defendants were not prejudiced and the plain error

challenge must fail. We will then affirm the original

sentences, provided they are reasonable. See id. (citing

Booker, 125 S. Ct. at 765).

On the other hand, if the district court decides that different sentences would have been appropriate in the exercise

of greater discretion, “we will vacate the original sentence

and remand for resentencing.” Paladino, 2005 WL 435430,

at *10. Regardless of whether the district court decides to

resentence the defendants, the court should abide by the

process we set forth in Paladino to provide an appropriate

explanation for its decision. See id.

II. Conclusion

For the foregoing reasons, we AFFIRM the defendants’

convictions. As to the defendants’ sentences, however, we

order a limited remand of this case in accordance with the

remedial procedure adopted by this circuit in Paladino. The

district court is directed to return this case to us at the

completion of its sentencing determination, pursuant to the

procedure set forth in Paladino.
10 Nos. 03-1110, 03-1113 & 03-1195

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—3-24-05