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United States v. Solomon

United States Court of Appeals, Seventh Circuit

June 5, 2018

United States of America, Plaintiff-Appellee,
Gary Solomon, Defendant-Appellant.

          Argued December 5, 2017

          Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 15 CR 00620-2 - Edmond E. Chang, Judge.

          Before Wood, Chief Judge, and Rovner and Hamilton, Circuit Judges.

          WOOD, CHIEF JUDGE.

         Hard as it may try, Chicago has not yet managed to shake free from the scourge of public corruption. Gary Solomon, Thomas Vranas, and Barbara Byrd-Bennett have added another chapter to this inglorious history. As CEO of the Chicago Public Schools (CPS), Byrd-Bennett worked behind the scenes to assure that two companies headed by Solomon and Vranas would receive lucrative contracts. In exchange, Solomon and Vranas agreed that they would pay Byrd-Bennett a percentage of the revenue generated by those contracts when she came to work for them at the end of her tenure with CPS. After the fraudulent scheme was exposed, each participant pleaded guilty to committing wire fraud in violation of 18 U.S.C. §§ 1343 and 1346. Solomon was sentenced to 84 months' imprisonment, 30 months more than Byrd-Bennett received. Solomon's sentence also significantly exceeds Vranas's, though that gap is irrelevant for this appeal.

         Solomon wants a new sentencing hearing. He accuses the district court of incorporating the value of a contract unrelated to the criminal agreement into his advisory sentencing guidelines calculation. That alleged error resulted in an offense score that was four levels higher than Solomon believes it should have been. Additionally, Solomon believes that the disparity between Byrd-Bennett's sentence and his sentence is unwarranted, making his sentence substantively unreasonable. Because the record supports the court's decision to include the contested contract in the offense level calculation, and because dissimilar cooperation is a reasonable basis for a sentencing disparity, we affirm the district court's sentence.


         Before she joined CPS in May 2012, Byrd-Bennett briefly consulted for a pair of companies (The SUPES Academy, LLC, and Synesi Associates, LLC) to which we refer as SUPES. SUPES provided training services for educators. Solomon was its CEO, and Vranas its President. Byrd-Bennett's consulting role with SUPES entitled her to a percentage of the companies' revenue. When Byrd-Bennett assumed her public positions, first consulting for CPS and later as its CEO, her relationship with SUPES persisted, despite the fact that as an agent of CPS she was not allowed to have an economic interest in any vendor contracts. Byrd-Bennett used her authority as the head of CPS to ensure that SUPES won two lucrative contracts. The first, ultimately valued at $2.54 million, was awarded within two weeks of her taking over the top job for the school district. The second followed her ascension by eight months and was worth $20.5 million. Each was a sole-source contract-meaning it was a contract for which there could be only one bidder.

         In exchange for this largesse, Solomon and Vranas deposited a percentage of the revenue generated from those contracts into trusts for the benefit of Byrd-Bennett's two grandsons. The plan was that once she finished with her CPS service, she would return to SUPES and receive control of the trusts as a "signing bonus." SUPES also set aside revenue into a "development fund, " a portion of which was earmarked for Byrd-Bennett, again to be paid on her return to SUPES.

         As Robert Burns observed, "The best laid schemes o' mice an' men/Gang aft a-gley." So it was here. No more than a month after the second contract was awarded, the Inspector General for the Chicago Board of Education launched an investigation into Byrd-Bennett's relationship with SUPES. As Vranas would later admit, he and Solomon deleted emails sent between them and Byrd-Bennett when they learned about the investigation. Almost two years to the day of Byrd-Bennett's taking the reins as CEO, a grand jury returned a 23-count indictment against Solomon, Vranas, and Byrd-Bennett. They were charged with, among other things, a scheme to obtain public money through bribery and kickbacks. All three defendants pleaded guilty on one count.

         At Solomon's sentencing hearing, he and the government disagreed about the scope of the fraudulent arrangement. He argued that his agreement with Byrd-Bennett reached only the first of the two contracts SUPES received, while the government countered that the agreement remained in force through the second contract. If Solomon was right, the value of the monetary benefit he and Vranas received from the scheme, calculated as the profit earned from each contract, was $508, 000. If the government was right, the benefit was $2.9 million. This translated, for purposes of the U.S. Sentencing Guidelines, into a difference of four levels in the required enhancement to the baseline offense score of 12, see U.S.S.G. § 2C1.1(a)(2), from 12 additional levels to 16, see U.S.S.G. §§ 2B1.1(b)(1), 2C1.1(b)(2). Solomon did not dispute the government's benefit calculation if the second contract was found to be part of the agreement.

         The district court found that the evidence backed the government. After adding another four levels because the scheme involved a public official in a high-level position, U.S.S.G. § 2C1.1(b)(3), plus two more levels for obstruction of justice, U.S.S.G. § 3C1.1, and then subtracting three levels for acceptance of responsibility, U.S.S.G. § 3E1.1(a), (b), the court found a final offense level of 31. Together with Solomon's Criminal History Category I, this yielded an advisory sentencing range of 108-135 months. After weighing the sentencing factors outlined by 18 U.S.C. § 3553(a), the court selected a final sentence of 84 months' incarceration.

         Though Byrd-Bennett was still awaiting sentencing at the time of Solomon's hearing, the district court discussed her and Solomon's relative culpability. The government acknowledged that had all things been equal, it would have preferred that Byrd-Bennett receive a harsher sentence than Solomon. And indeed, the advisory guidelines sentence for Byrd-Bennett, which accounted for the fact that she was a public official, was 135-168 months. But the government advised the judge that it supported a higher sentence for Solomon. It did so in large part because of Byrd-Bennett's much more extensive cooperation with the investigation-cooperation that the government intended to reward through the filing of a motion under U.S.S.G. § 5K1.1 at the appropriate time. Moreover, Solomon profited immediately from the scheme. While ...

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