In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 16‐4106
UNITED STATES OF AMERICA,
Plaintiff‐Appellee,
v.
BRANKO BOGDANOV,
Defendant‐Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 14 CR 110‐1 — Andrea R. Wood, Judge.
____________________
ARGUED APRIL 11, 2017 — DECIDED JULY 12, 2017
____________________
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’ imprison‐
ment and entered a preliminary order of forfeiture in the
2 No. 16‐4106
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 sen‐
tencing 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 be‐
longing 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 pro‐
vided 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 in‐
terviews 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.
No. 16‐4106 3
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 Bog‐
danovs 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 en‐
forcement 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 indict‐
ment 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.) Bog‐
danov pleaded guilty in November 2015 pursuant to a plea
agreement, in which he acknowledged that he and his co‐con‐
spirators 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 judg‐
ment against the home.
The plea agreement noted that Bogdanov and the govern‐
ment did not agree on the estimated loss amount: the govern‐
4 No. 16‐4106
ment calculated it to be more than $3.5 million, while Bog‐
danov asserted that it was a comparatively modest $15,000 to
$40,000. To resolve the dispute, the district court held an evi‐
dentiary 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 inves‐
tigator also laid out for the court the method he had used to
calculate the loss: 1) he added up the dollar amounts of Indi‐
vidual 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 ac‐
counts; and 4) he increased the adjusted total by 25% to ac‐
count 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 guide‐
lines. 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 sto‐
len 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 gov‐
ernment’s evidence fell short of linking Bogdanov to the al‐
leged 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
No. 16‐4106 5
its estimate, and that sufficient circumstantial evidence sup‐
ported 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 judg‐
ment). 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 in‐
sufficient evidence to support the finding that he stole the
goods.
II
Loss amounts and forfeiture amounts are not necessarily
the same. The loss amount for purposes of sentencing is based
on both the conduct of conviction and relevant criminal or un‐
lawful conduct; it must be attributable to the defendant.
United States v. Orillo, 733 F.3d 241, 244 (7th Cir. 2013). Forfei‐
ture, in contrast, is gain‐based, focusing on the defendant’s
proceeds from the criminal activity. 18 U.S.C. § 981(a)(1);
United States v. Segal, 495 F.3d 826, 839 (7th Cir. 2007). We use
the same clear error standard in our assessment of both the
loss and forfeiture amounts; we will reverse only if our review
leaves us with the definite and firm conviction that the district
court made a mistake. Orillo, 733 F.3d at 244; United States v.
Ali, 619 F.3d 713, 720 (7th Cir. 2010).
6 No. 16‐4106
We do not need to dwell on the difference between loss
and forfeiture in this case, because Bogdanov is not complain‐
ing about the details of either calculation. Rather, he chal‐
lenges the sufficiency of the evidence in a way that applies
equally to both amounts. We therefore address them together.
See Ali, 619 F.3d at 720 (analyzing challenges to loss calcula‐
tion, forfeiture order, and restitution award together because
challenges to each were the same); see also Orillo, 733 F.3d at
244 (analyzing challenges to loss and restitution amounts to‐
gether).
For purposes of calculating loss for sentencing and orders
of forfeiture, the government must prove the amount by a pre‐
ponderance of the evidence. Ali, 619 F.3d at 720. In other
words, the court (which serves as the finder of fact for both
calculations) must conclude that it is more likely than not that
the amount in question is correct; for this purpose, a reasona‐
ble estimate suffices. Orillo, 733 F.3d at 244.
Bogdanov first takes aim at the district court’s reliance on
Individual A’s hearsay testimony. He points out, accurately
enough, that had there been a trial, the fact‐finder would have
had to rely exclusively on Individual A’s statements about the
source of the stolen goods, and those statements (in the form
the government used them) were hearsay. But so what? Bog‐
danov admitted that he committed the underlying offense.
With guilt established, all that remained was to prove the loss
amounts for sentencing and restitution by a preponderance,
under the more relaxed evidentiary rules that apply at the
sentencing stage. As the district court properly observed, the
government did not need to trace back each good or dollar to
the crime. Rather, it had to prove only that it was more likely
No. 16‐4106 7
than not that Bogdanov stole and resold a particular amount’s
worth of goods to Individual A.
Moreover, it is inaccurate to say that the district court was
relying solely on Individual A’s statements. Recall: Bogdanov
signed a plea agreement in which he admitted to conspiring
over a ten‐year period with his wife and daughter to transport
stolen goods, to selling goods on eBay that they had stolen
from retail stores, and to selling goods to Individual A, which
Individual A sold via eBay. Although the plea agreement did
not specify that the goods Bogdanov sold to Individual A
were stolen, abundant circumstantial evidence supports the
finding that it was more likely than not that Bogdanov stole
the goods in question. Indeed, his own admissions strongly
imply that the goods he sold to Individual A were stolen. The
government demonstrated through direct evidence and Bog‐
danov’s own admissions that Bogdanov was in the business
of stealing and reselling the same types of consumer retail
goods that he sold to Individual A.
In response, Bogdanov marshaled no evidence showing
that any of the alleged goods in question were obtained legit‐
imately: he produced neither receipts nor any other evidence
of a legal source for the goods. Despite Bogdanov’s contention
otherwise, the fact that Individual A reported that Bogdanov
had told him that the goods were not stolen is not evidence
that Bogdanov had a legitimate source for the goods; at most,
it is evidence that Bogdanov may have told Individual A he
had a bona fide supplier. The district court was therefore well
within its discretion to disregard that statement when as‐
sessing the evidence. While Bogdanov argues that the district
court ignored evidence of his legitimate sources of income
such as his family’s vehicle sales and construction businesses,
8 No. 16‐4106
the fact that his family may have had access to some untainted
sources of income says nothing about the source of the stolen
goods themselves.
Bogdanov also challenges the credibility of Individual A’s
testimony because the latter was an identified criminal and,
Bogdanov says, he did not have the opportunity to cross‐ex‐
amine Individual A. (Bogdanov does not go into any detail
about the reason for Individual A’s unavailability, and so nei‐
ther will we.) The district court acted within its discretion in
relying on Individual A’s testimony, as the court found that it
was reliable. See United States v. Miller, 782 F.3d 793, 801 (7th
Cir. 2015) (noting that the rules of evidence do not apply to
sentencing hearings and use of hearsay testimony is not re‐
versible error). In support of that finding, the court noted that
the statements Individual A made in writing, on video, and to
government and corporate investigators were consistent. The
district judge was able to view Individual A’s video testimony
and observe his demeanor. Although the court had the option
of discounting Individual A’s testimony as that of an “identi‐
fied criminal,” it was under no obligation to do so. The touch‐
stone is reliability, United States v. Sewell, 780 F.3d 839, 849–50
(7th Cir. 2015), and we see no clear error in the district court’s
decision that this crucial testimony passed the test.
Finally, Bogdanov thinks it is problematic that a corporate
loss investigator, rather than a government officer, performed
the initial calculations of the loss amounts. According to Bog‐
danov, government officials ordinarily “seek a just disposi‐
tion,” whereas victims “customarily seek vengeance and max‐
imum punishment … .” This, he wants us to believe, means
that he was prejudiced by the corporate investigator’s calcu‐
No. 16‐4106 9
lation of the losses. But the fact that a mathematical calcula‐
tion is performed by a victim is not enough to establish prej‐
udice. To convince us there was an error, Bogdanov would
have had to show that the formulas applied or the calculations
performed were improper or erroneous—that is, he needed to
show that the investigator failed to apply a reasonable meth‐
odology to calculate the loss. He did not do so, and so his ar‐
gument fails.
For the sake of completeness, we note in closing that al‐
though it was not clear how profits from the enterprise may
have been split among Bogdanov, his family members, and
Individual A, Bogdanov has not raised any challenge to the
order of forfeiture on the basis established in the Supreme
Court’s recent decision in Honeycutt v. United States, 137 S. Ct.
1626 (2017). In Honeycutt, the Court held that for purposes of
the drug forfeiture statute, 21 U.S.C. § 853, a defendant cannot
be held jointly and severally liable for property that a co‐con‐
spirator derived from a crime, if the defendant himself did not
acquire it. Bogdanov’s forfeiture of this argument means that
we must save for another day the possible application of this
principle to an arrangement such as this one. See Ali, 619 F.3d
713.
The judgment of the district court is AFFIRMED.