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7th Circuit upholds embezzlement convictions against ex-mayor

December 28, 2011

The 7th Circuit Court of Appeals has affirmed ex-East Chicago Mayor George Pabey’s convictions of embezzling government funds and conspiring to embezzle and found the District Court didn’t err when it sentenced him to 60 months in prison.

Pabey – along with East Chicago’s head of the Engineering Department, Jose Camacho – was convicted in September 2010 on the two embezzling counts. Pabey and Camacho used government funds and government employees to renovate a house Pabey and his wife, Hilda, purchased in Gary, Ind., in October 2007. Pabey claimed that he had no idea about the scheme to use city funds and employees. The District Court gave the jury a conscious avoidance instruction – also known as an ostrich instruction – that Pabey’s knowledge of the scheme can be inferred if they find he deliberately avoided the knowledge necessary for his conviction.

Pabey was convicted and sentenced to 60 months in prison and ordered to pay more than $70,000 in fines and restitution, which was above the United States Sentencing Guidelines. His sentence was also enhanced for obstruction of justice, for his leadership role in the offense, and for abuse of a position of trust.

Pabey challenged the jury instruction, but the 7th Circuit found the District Court did not abuse its discretion by giving it. In this case, the government presented both types of evidence – committing overt physical acts to avoid the knowledge and purely psychological avoidance – to show that if Pabey was unaware of the embezzlement scheme, then he deliberately avoided such knowledge.

The appellate court also found each of the sentencing enhancements were appropriate. Regarding the increased sentence, the District Court provided adequate support for its upward departure based on the 18 U.S.C. Section 3553(a) factors, and further supported its departure using the United States Sentencing Guidelines recommendations, wrote Judge Joel Flaum in United States of America v. George Pabey, No. 11-2046.

 

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