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United States v. Bogdanov

United States Court of Appeals, Seventh Circuit

July 12, 2017

United States of America, Plaintiff-Appellee,
v.
Branko Bogdanov, Defendant-Appellant.

          Argued April 11, 2017

         Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 14 CR110-1 Andrea R. Wood, Judge.

          Before WOOD, Chief Judge, and Flaum and Easterbrook, Circuit Judges.

          WOOD, Chief Judge.

         Branko Bogdanov pleaded guilty to two criminal counts stemming from his family's multi-million dollar shoplifting scheme: one count for conspiring to transport stolen goods in interstate commerce, 18 U.S.C. § 2314, and one count for a substantive violation of the same law. The district court sentenced him to 48 months' imprisonment and entered a preliminary order of forfeiture in the amount of $2.8 million. Bogdanov now challenges both the sufficiency of the evidence supporting the forfeiture order and the total loss amount that supported his advisory sentencing guidelines range. Because we find no error in either calculation, we affirm the district court.

         I

         Bogdanov -along with his wife, Lela, and their adult daughter, Julia-ran a multi-state shoplifting operation for a decade. On their travels to shopping malls and retail stores, the trio stole consumer retail goods such as American Girl dolls, Lego blocks, and bags of Starbucks coffee. They then sold the stolen goods, either online through eBay accounts belonging to family members, or to another person (who later became a confidential informant known as "Individual A"), who in turn sold them through his own eBay account.

         One of the victim stores was Barnes & Noble. In response to reports of large quantities of missing retail items, a Barnes & Noble corporate investigator opened an investigation in the fall of 2013. The investigator's online queries led him to Julia Bogdanov's and Individual A's eBay accounts, which provided sales information and home addresses. With this in hand, the investigator eventually approached Individual A in person to question him about the goods. In later voluntary interviews with the investigator, Individual A revealed that Bogdanov (to whom he referred as "Franko Kalath") was the source of approximately 90-95% of the items that Individual A sold through his eBay account. Individual A claimed that Bogdanov had told him that he had a supplier for the goods in California.

         The corporate investigator eventually referred the matter to the U.S. Secret Service; the referral led federal and local law enforcement officers to begin investigating and tracking the Bogdanovs. Police officers surveilled the Bogdanovs on their travels to stores in Texas, Louisiana, and Mississippi, and they conducted pretextual traffic stops accompanied by searches that revealed vans full of consumer goods for which the Bogdanovs had no receipts. Store surveillance cameras also showed the Bogdanovs stealing goods at various locations.

         The government filed a criminal complaint against the three Bogdanovs in March 2014. After arresting them, law enforcement officers executed a search warrant for the family's home in Northbrook, Illinois, where all three resided. During the search, officers seized consumer goods such as Legos, baby monitors, headphones, and bags of Starbucks coffee. A grand jury indicted the Bogdanovs in April 2014; the indictment charged Branko Bogdanov with conspiracy to violate section 2314, and with one substantive violation of section 2314. (In the remainder of this opinion, we refer to him as "Bogdanov" and to Lela and Julia by their first names.) Bogdanov pleaded guilty in November 2015 pursuant to a plea agreement, in which he acknowledged that he and his co-conspirators stole goods with a value in excess of $5, 000 and that the conspiracy lasted more than ten years. Bogdanov also acknowledged that the family's home was subject to forfeiture because the property was derived from proceeds traceable to the offenses, and he agreed to the entry of a forfeiture judgment against the home.

         The plea agreement noted that Bogdanov and the government did not agree on the estimated loss amount: the governmerit calculated it to be more than $3.5 million, while Bogdanov asserted that it was a comparatively modest $15, 000 to $40, 000. To resolve the dispute, the district court held an evidentiary hearing at which the Barnes & Noble investigator and the Secret Service agent assigned to the case testified. Both described their interviews with Individual A. The investigator also laid out for the court the method he had used to calculate the loss: 1) he added up the dollar amounts of Individual A's items sold between 2007 and 2014 on eBay; 2) he reduced that total by 10% because Individual A estimated that 5 to 10% of the items he sold did not come from Bogdanov; 3) he added in the items sold on the Bogdanov family eBay accounts; and 4) he increased the adjusted total by 25% to account for the fact that the items had been sold online for prices below their retail value. This method yielded a total loss amount of just over $3.5 million, which resulted in an 18-level increase to the base offense level under the sentencing guidelines. U.S.S.G. § 2B1.1(b)(1)(J).

         Bogdanov did not testify at the hearing or present any witnesses on his behalf. Instead, he argued in his sentencing memorandum that the government had failed to establish that the goods sold on Individual A's eBay account were stolen or (if they were) that Bogdanov was the person who stole them. As for the goods sold through his individual family member's accounts, Bogdanov similarly argued that the government's evidence fell short of linking Bogdanov to the alleged thefts.

         The district court rejected Bogdanov's arguments. It ruled that the government was not required to trace each and every item to the source, that the government reasonably supported its estimate, and that sufficient circumstantial evidence supported the overall total. The government then requested, and the district court granted, a preliminary order of forfeiture in the amount of $2.8 million (for which the house was identified as a substitute asset in partial satisfaction of the money judgment). The difference between the forfeiture and loss amounts represented a 25% deduction from the $3.5 million loss amount calculation to account for "proceeds" made from the crime, rather than loss to the victims. Bogdanov opposed the forfeiture amount on the same grounds he had advanced against the loss amount.

         Bogdanov challenges the restitution and loss amounts on appeal, arguing principally that the government presented insufficient evidence to ...


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