CHICAGO (CN) - A former mayor convicted of embezzling government funds to remodel his daughter's Gary, Ind., home cannot reduce his prison sentence, the 7th Circuit ruled.
George Pabey, a former police chief, served as mayor of East Chicago, Ind., from 2004 to 2010 after 22 years on the police force.
In late 2007, Pabey bought a Gary home worth $67,000 for his daughter. After five months of renovations under the direction of Pabey's longtime friend, Jose Camacho, the city's engineering supervisor, the home was worth $135,000.
Though Camacho had helped Pabey with home improvements before, prosecutors claimed that this project included a scheme to pass the bill onto the city. Camacho was indicted for charging project materials to the city's credit at a local Menards and Joseph's Hardware and for using on-the-clock city workers to complete the project.
Pabey denied knowledge of the scheme at trial, saying that Camacho must have pocketed the cash payments he made. The government then attempted to prove that Pabey deliberately attempted to avoid the truth behind the embezzlement scheme by showing that he acted differently with this project than in his past dealings with Camacho.
At trial, U.S. District Judge James Moody gave a standard conscious avoidance instruction - commonly known as an "ostrich instruction" - which informs jurors that the legal definition of knowledge includes deliberate avoidance of knowledge.
On Sept. 24, 2010, the jury convicted Pabey of conspiring to embezzle government funds, causing the mayor to automatically lose his office under Indiana law as a city official convicted of a felony.
Judge Moody imposed a five-year prison sentence, $60,000 fine and $14,000 in restitution. The sentence is nearly double the 27- to 33-month range recommended by the U.S. Sentencing Guidelines.
Pabey appealed his conviction and sentence, arguing that the instruction was improper and that the above-guidelines sentence was unfair.
The 7th Circuit affirmed last week, agreeing that the ostrich instruction was necessary, given the government's argument.
"Pabey claimed a lack of guilty knowledge at trial, so the only question to answer regarding this issue is whether the government presented sufficient evidence for a reasonable jury to find that Pabey deliberately avoided the truth behind the embezzlement scheme," Judge Joel Flaum wrote for a three-member panel.
"All these red flags, along with the court's finding that Pabey was usually a 'hands-on mayor,' suggest that Pabey deliberately avoided incriminating knowledge while reaping numerous benefits."
The judges also agreed that Moody's did not abuse his discretion in making the upward adjustment.
Pabey is currently incarcerated in a minimum security facility in Duluth, Minn.
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