In the

United States Court of Appeals

For the Seventh Circuit

No. 07-2759

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

STEFAN DIMITROV,

Defendant-Appellant.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 05 CR 388-1—Milton I. Shadur, Judge.

ARGUED FEBRUARY 12, 2008—DECIDED OCTOBER 3, 2008

Before EASTERBROOK, Chief Judge, and RIPPLE and

ROVNER, Circuit Judges.

ROVNER, Circuit Judge. Stefan Dimitrov entered a conditional guilty plea to one count of operating an unlicensed

money transmitting business in violation of 18 U.S.C.

§ 1960(a). He was sentenced to three months’ imprisonment to be followed by three years of supervised release.

Dimitrov now appeals, challenging the constitutionality

of § 1960 and the district court’s ruling on a motion in

limine decided before his guilty plea. For the reasons

explained herein, we affirm.
2 No. 07-2759

Stefan and Tatiana divorced before Dimitrov entered his 1

guilty plea, and he has since remarried.

I.

In 1998 Dimitrov, a Bulgarian immigrant, began operating an institution known as the Bulgarian Cultural Center

on Irving Park road in Chicago. Dimitrov and his wife at

the time, Tatiana Dimitrova, offered a number of services 1

to the Bulgarian community through the Cultural Center,

including document translation and assistance with

everything from green card applications to locating

employment. The Cultural Center also contained a library

of Bulgarian books and videos, jewelry from Bulgaria for

sale, and a small kitchen. According to Dimitrov, people

began asking for assistance transferring money to Bulgaria.

Initially he assisted others by translating the money

transmitting forms into English and using his personal

checking account to transfer the funds. As the number of

requests for help transferring money increased, he

opened a separate account at TCF Bank to transmit money

to Bulgaria.

The money transmitting service supplied the bulk of any

income that Stefan and Tatiana made running the Cultural

Center. The Dimitrovs charged a flat $20 fee for the service

in addition to a small (usually .5%) percentage of the total

amount transferred. The Department of Immigration and

Customs Enforcement began investigating the Dimitrovs’

business after reviewing bank records from TCF Bank

suggesting that the Dimitrovs may not have a required

license to operate a money transmitting business. The
No. 07-2759 3

bank records revealed deposits into an account named

“B Connection,” which Dimitrov used to wire money to

the Bulgarian Post Bank in Sofia, Bulgaria. Investigating

agents then used the bank records to identify Bulgarians

who had used Dimitrov’s money transmitting business.

One of these individuals agreed to cooperate with the

agents and explained that he had wired money to Bulgaria

using B Connection on multiple occasions. He would

give one of the Dimitrovs the cash for wiring, the name

of the intended recipient of the money, and the Bulgarian

equivalent of the Social Security number of the recipient.

The cooperating individual recounted that his family

members later retrieved the money from the Bulgarian

Post National Bank. In later transactions, Dimitrov made

the process more secure by having customers deposit

their funds for transfer directly into the account at TCF

Bank. Between January 2003 and April 2005 the Dimitrovs

transmitted approximately $3,000,000 to Bulgaria on

behalf of their customers.

Although the Dimitrovs’ money transmitting business

was by all accounts a legitimate one, it lacked the license

required by Illinois for money transmitting. 205 ILCS

657/10. That oversight amounted to a felony by virtue

of 18 U.S.C. § 1960(a), which prohibits operating an

“unlicensed money transmitting business.” Such a business

is defined by reference to state law, making it a violation

of § 1960(a) to operate without an appropriate money

transmitting license where the failure to have a license is

punishable “as a misdemeanor or felony under State law,

whether or not the defendant knew that the operation

was required to be licensed or that the operation was so
4 No. 07-2759

punishable.” § 1960(b)(1)(A). Under Illinois law, the

failure to obtain the required money transmitting license

is a Class 3 felony. 205 ILCS 657/90(h).

Instead of the required money transmitting license,

Dimitrov obtained a Limited Business License from the

City of Chicago “for general sales, service and office

operations/or businesses that do not fall under another

license category and are not exempt from City licenses,” see

Chicago, Ill., Mun. Code § 4-4-020, which he believed

discharged his licensing obligations. That belief, if genuine,

became less tenable in September 2004, when TCF Bank

sent him the first of several letters requesting verification

of the registration and licensing status of his money

transmitting business. The letter included a form entitled

“Verification of Licensing and Registration for Money

Service Business” which Dimitrov was instructed to

complete and sign. When it received no response

from Dimitrov, TCF Bank sent him a second letter in

November 2004 requesting that he verify his licensing

status and warning him that failure to do so would result

in closure of his account. In December, TCF Bank sent

Dimitrov a third letter informing him that it had reviewed

his account and determined that he was operating a

business that provided money services. That letter requested a current copy of B Connection’s state license

and its anti-money laundering policy and procedures as

well as the IRS acknowledgment that B Connection was

registered with the Financial Crimes Enforcement Network. The letter warned that failure to respond with the

requested verifications within 30 days would result in

closure of his accounts.
No. 07-2759 5

Presumably prompted by the letters from TCF Bank,

Dimitrov looked into obtaining a money transmitting

license in late 2004 or early 2005. Dimtrov and a business

associate, Hamid Rusef, traveled to Springfield and met

with Phil Sanson, a senior examiner for Illinois in the

Department of Financial and Professional Regulation.

Sanson explained to Dimitrov and Rusef the process for

obtaining a money transmitting license and also gave

them the application packet, which contains a checklist

of the required materials. Dimitrov, however, never

completed the application materials. When Dimitrov

failed to respond to its warnings, TCF Bank ultimately

closed the accounts associated with his money transmitting business. He then transferred the accounts to

Bank One, where he continued transmitting money

through April 2005.

Dimitrov and his wife Tatiana were charged in July 2005

with one count of violating § 1960(a). Tatiana pleaded

guilty pursuant to a written plea agreement, but Dimitrov

initially intended to proceed to trial. On the day Dimitrov’s

trial was scheduled to begin, he elected to enter a conditional guilty plea. Dimitrov’s decision came as a result of

the district court’s ruling on the government’s motion in

limine to prevent Dimitrov from presenting evidence

that he lacked knowledge of the Illinois licensing law.

Dimitrov planned to testify at trial about his Limited

Business License and his belief that the license relieved his

duty to obtain the required money transmitting license.

Before trial, the district court concluded that Dimitrov’s

belief that the Limited Business License was sufficient
6 No. 07-2759

would be irrelevant, because § 1960(a) does not require

knowledge of state licensing requirements. Faced with

this ruling, Dimitrov chose to plead guilty, but reserved

his right to challenge the constitutionality of § 1960(a) to

the extent that it does not require the defendant to

know that his conduct is illegal.

II.

On appeal, Dimitrov argues that § 1960(a) is unconstitutionally vague. Specifically, Dimitrov claims that the

statute lacks a mens rea element and so fails to give fair

notice of prohibited conduct. To understand Dimitrov’s

argument, a brief history of § 1960 is in order.

A. 18 U.S.C. § 1960(a)

Congress enacted § 1960(a) in 1992 in response to concerns that nonbank financial institutions (money transmitters, check cashers, and foreign exchange dealers) were

increasingly being used to transfer the proceeds of illegal

activity. See S. Rep. No. 101-460 (September 12, 1990);

United States v. Velastegui, 199 F.3d 590, 593 (2d Cir. 1999).

The original version of § 1960 provided in pertinent part

as follows:

(a) Whoever conducts, controls, manages, supervises,

directs, or owns all or part of a business, knowing the

business is an illegal money transmitting business, shall be

fined in accordance with this title or imprisoned not

more than 5 years, or both.
No. 07-2759 7

(b) As used in this section—

(1) the term “illegal money transmitting business”

means a money transmitting business which affects

interstate or foreign commerce in any manner or

degree and—

(A) is intentionally operated without an appropriate money transmitting license in a State where

such operation is punishable as a misdemeanor or felony under State law; or

(B) fails to comply with the money transmitting

business registration requirements under [31

U.S.C. § 5330], or regulations prescribed under

such section . . . .

18 U.S.C. § 1960 (1992) (amended 2001) (emphasis supplied).

As part of the Patriot Act, Congress amended § 1960 on

October 26, 2001, in an attempt to make it easier to prosecute those responsible for funneling money to terrorism.

See Report from the Field: The USA PATRIOT Act at Work,

at 10, http://www.usdoj.gov/olp/pdf/patriot_report_from_

the_field0704.pdf. The amended version reads in pertinent part as follows:

(a) Whoever knowingly conducts, controls, manages,

supervises, directs, or owns all or part of an unlicensed

money transmitting business, shall be fined in accordance

with this title or imprisoned not more than 5 years,

or both.

(b) As used in this section—
8 No. 07-2759

(1) the term “unlicensed money transmitting business” means a money transmitting business which

affects interstate or foreign commerce in any

manner or degree and—

(A) is operated without an appropriate money

transmitting license in a State where such

operation is punishable as a misdemeanor or

a felony under State law, whether or not the

defendant knew that the operation was required to

be licensed or that the operation was so punishable;

18 U.S.C. § 1960 (as amended October 26, 2001) (emphasis

added).

The 2001 amendments thus removed the scienter requirement of the former version, making § 1960 a “general intent crime for which a defendant is liable if he

knowingly operates a money transmitting business.” H.R.

Rep. No. 107-205, pt. I, at 54 (2001). Under the amended

§ 1960, the government no longer need prove that a

defendant was aware of state licensing requirements or

that he knew about the federal registration requirements

found at 31 U.S.C. § 5330 (requiring owners or controllers

of money transmitting businesses to register with the

Secretary of the Treasury). See id.; see also United States

v. Elfgeeh, 515 F.3d 100, 132 (2d Cir. 2008) (recognizing

that the amendment “made § 1960(a) stricter by eliminating the requirement of proof that the defendant knew that

a license was required”).
No. 07-2759 9

B. Dimitrov’s Vagueness Challenge to § 1960(a)

According to Dimitrov, § 1960 “does not contain a mens

rea element,” and therefore fails to give fair notice of

prohibited conduct. Dimitrov also maintains that because

§ 1960 is broader than necessary “to satisfy the legislature’s

intent,” it invites arbitrary enforcement. A criminal statute

is unconstitutionally vague if it fails to sufficiently define

prohibited conduct so that ordinary individuals understand what is prohibited or fails to establish minimal

guidelines to prevent arbitrary or discriminatory enforcement. Kolender v. Lawson, 461 U.S. 352, 357-58 (1983);

United States v. Watzman, 486 F.3d 1004, 1009 (7th Cir.

2007).

In United States v. Talebnejad, 460 F.3d 563, 568 (4th Cir.

2006), the Fourth Circuit considered and rejected a vagueness challenge to the amended version of § 1960. In considering the defendant’s contention that § 1960 was

unconstitutional by virtue of its failure to recognize

ignorance of state licensing requirements as a defense to

liability, the Fourth Circuit noted that, “[t]here is no

question that, at least under some circumstances, Congress

may dispense with a mens rea element, as it has clearly

done with respect to § 1960(b)(1)(A).” Talebnejad, 460

F.3d at 568 (internal citation omitted). By failing to acknowledge this, Dimitrov conflates legal knowledge with

factual knowledge. True, the statute no longer contains

any requirement that a money transmitting operator

know that what he is doing is prohibited by state law. But

“[t]he rule that ‘ignorance of the law will not excuse’ is

deep in our law.” Lambert v. State of California, 355 U.S. 225,
10 No. 07-2759

228 (1958) (internal citation omitted); see also Cheek v. United

States, 498 U.S. 192, 199 (1991) (“[I]gnorance of the law or

a mistake of law is no defense to criminal prosecution.”).

Lambert itself is the only Supreme Court case to recognize

a “mistake of law” defense. The registration statute

invalidated in Lambert criminalized the act of being present

in Los Angeles as a convicted felon without registering,

regardless of one’s knowledge of the registration requirement.

Unlike the statute at issue in Lambert, § 1960(a) requires

the affirmative action of knowingly operating a money

transmitting business. See Talebnejad, 460 F.3d at

570 (contrasting passive presence regulated in Lambert

with the “unquestionably active conduct of operating a

business”). This is in contrast to the registration statute

in Lambert, where the Court noted that “[v]iolation of its

provisions is unaccompanied by any activity whatsoever,

mere presence in the city being the test.” Lambert, 355

U.S. at 229. Moreover, the Lambert Court emphasized that

there were no surrounding circumstances “which might

move one to inquire as to the necessity of registration.” Id.

Here, however, Dimitrov operated his business in a

highly regulated industry, and could reasonably have

been expected to know that there may be licensing requirements. See Papachristou v. City of Jacksonville, 405

U.S. 156, 162 (1972) (“In the field of regulatory statutes

governing business activities, where the acts limited are

in a narrow category, greater leeway is allowed.”). The

fact that § 1960 does not include knowledge of the

licensing requirement as an element of the crime does not

by itself render it unconstitutionally vague. It is enough
No. 07-2759 11

that the statute requires a defendant to know the facts

that make his conduct illegal—i.e., that he is operating

an unlicensed money transmitting business. Accord,

Talebnejad, 460 F.3d at 570.

Nor are we convinced by Dimitrov’s argument that

ordinary individuals will not be able to differentiate

between an “appropriate” money transmitting license

and an inadequate one. Unlike the vagrancy ordinance

invalidated in Papachristou, 405 U.S. at 157-171, on which

Dimitrov relies, § 1960 provides objective criteria for

determining what is an “appropriate” license. The reference to “State law” in § 1960(b) makes it plain that an

appropriate license is whatever is required under state

law. Moreover, Papachristou explicitly distinguished “the

average householder” subject to the vagrancy ordinance

at issue from an individual in “business,” who would

presumably be alerted to the regulatory schemes governing his conduct. See Papachristou, 405 U.S. at 162-63. We

thus conclude that by referencing state law, the phrase

“appropriate money transmitting license” provides

individuals of “ordinary intelligence a reasonable opportunity to know what is prohibited.” Grayned v. City

of Rockford, 408 U.S. 104, 108 (1972). Given the language of

the statute, a reasonable person would understand that a

generic city business license would not pass muster as

a “money transmitting license.”

The objective criteria also satisfy us that the ordinance

is not so broad that it invites arbitrary or discriminatory

enforcement. Unlike the vagrancy and loitering statutes

the Supreme Court has struck down as unconstitutionally

vague, § 1960 objectively defines the illegal conduct:
12 No. 07-2759

operating a money transmitting business without the

license required by state law. § 1960(b)(1)(A). It thus does

not suffer from the chief infirmity of the unconstitutional

statutes in those cases on which Dimitrov relies, which

vest enforcement officials with wide discretion and

contain no objective standards to prevent arbitrary enforcement. See City of Chicago v. Morales, 527 U.S. 41 (1999)

(striking down anti-loitering ordinance that conferred

“vast discretion” on police to arrest individuals remaining

“ ‘in any one place with no apparent purpose’ ”);

Papachristou, 405 U.S. at 168 (noting “unfettered discretion”

vagrancy ordinance placed in hands of police). We thus

reject Dimitrov’s suggestion that § 1960(a) creates a “trap”

for unwary individuals engaging in innocent behavior.

The statute explains what is required of an individual

operating a money transmitting business with sufficient

clarity that an ordinary person can understand that

operating without a required state licence is prohibited.

C. The Government’s Motion in Limine

In a related vein, Dimitrov challenges the district court’s

refusal to allow him to present evidence that he was

unaware of the Illinois money transmitting license requirements. Before trial, the government moved in

limine to prevent Dimitrov from testifying that he believed his Limited Business License sufficed. The district

court granted the government’s motion after reviewing

the Fourth Circuit’s decision in Talebnejad and concluding

that Dimitrov’s intended defense would be unavailing.

We review the district court’s evidentiary decision for
No. 07-2759 13

abuse of discretion. See United States v. Watts, 535 F.3d 650,

657 (7th Cir. 2008). As discussed above, Congress explicitly

removed the defense Dimitrov planned to present when

it amended § 1960. Because a defendant’s lack of knowledge of the state licensing requirement is not a defense

to prosecution, the district court appropriately concluded

that Dimitrov’s proposed evidence would be irrelevant.

It was therefore not an abuse of the court’s discretion to

grant the government’s motion in limine. See United States

v. Krankel, 164 F.3d 1046, 1054 (7th Cir. 1998) (trial court

did not abuse its discretion excluding evidence that did

“not tend to prove or disprove an element of the crime

charged”).

D. Unconstitutional Delegation of Legislative Authority 

Finally, Dimitrov attacks the constitutionality of § 1960

on the grounds that it amounts to an unconstitutional

delegation of legislative power. He claims that by relying

on state law to dictate whether the operation of a money

transmitting business without a license is criminal,

§ 1960(a) unconstitutionally delegates legislative power

to the states. See, e.g., A.L.A. Schechter Poultry Corp. v.

United States, 295 U.S. 495, 529-30 (1935). Dimitrov maintains that because the operation of a money transmitting

business is only a federal crime if the state legislature

has made it a felony or misdemeanor, § 1960(a) transfers

to the states its legislative function.

There are several problems with Dimitrov’s argument,

but the most pertinent one here is that he failed to preserve

it when he pleaded guilty. Following the district court’s
14 No. 07-2759

grant of the government’s motion in limine, Dimitrov

abandoned his plan to proceed to trial. To facilitate his

plea, the government drew up an “agreed statement of

facts.” In it Dimitrov admits that he operated a money

transmitting business without the license required by

Illinois law. It also states that Dimitrov possessed a

Limited Business License to do business in the City of

Chicago, and that he believed the license satisfied any

licensing obligations required of him. In agreeing to

plead guilty, Dimitrov reserved “the right to object to the

constitutionality and construction of Title 18 U.S.C. § 1960

as it relates to the mental state required to be in violation

of the law.”

Nowhere does the agreed statement of facts identify the

unconstitutional delegation argument Dimitrov now raises.

Rule 11(a)(2), which allows conditional guilty pleas, is a

narrow exception to the ordinary rule that a defendant

who pleads guilty cannot appeal from his conviction or

challenge the sufficiency of the indictment on appeal.

United States v. Doherty, 17 F.3d 1056, 1058 (7th Cir. 1994).

A conditional plea must be in writing and “precisely

identify which pretrial issues the defendant wishes to

preserve for review.” United States v. Markling, 7 F.3d 1309,

1313 (7th Cir. 1993). Dimitrov’s “conditional plea” as

memorialized in the agreed statement of facts identifies

and preserves only his objection to the constitutionality of

the “mental state” required to sustain a violation of

§ 1960(a). Because Dimitrov neither objected to § 1960 as an

unconstitutional delegation of legislative power before

entering his plea nor specified that ground in his conditional plea, he cannot raise it now on appeal. See Doherty,
No. 07-2759 15

17 F.3d at 1058-59 (“Doherty’s ‘conditional’ plea thus

necessarily reserved the right to appeal only the denial of

his motion to dismiss the indictment on the ground the

motion had stated.”).

III.

For the foregoing reasons, we AFFIRM Dimitrov’s conviction and sentence.

10-3-08