Sentencing Guidelines for United States Courts

Federal RegisterJun 6, 2001

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UNITED STATES SENTENCING COMMISSION

Sentencing Guidelines for United States Courts

AGENCY:

United States Sentencing Commission.

ACTION:

Notice of: (A) promulgation of temporary, emergency amendments, effective May 1, 2001, for (1) offenses involving the manufacture, importation, exportation, or trafficking of “Ecstasy”; (2) offenses involving the manufacture, importation, or trafficking of amphetamine; (3) offenses involving the trafficking of certain List I chemicals that are used in the manufacture of methamphetamine; and (4) offenses involving peonage and human trafficking; and (B) submission to Congress of additional non-emergency amendments to the sentencing guidelines, effective November 1, 2001.

SUMMARY:

The United States Sentencing Commission hereby gives notice of the following actions:

(A) Emergency Amendments.—

(1) “Ecstasy” Offenses.—Pursuant to section 3664 of the Ecstasy Anti-Proliferation Act of 2000, Pub. L. 106—310, the Commission has promulgated a temporary, emergency amendment to § 2D1.1.

(2) Amphetamine Offenses.—Pursuant to section 3611 of the Methamphetamine Anti-Proliferation Act of 2000, Pub. L. 106—310, the Commission has promulgated a temporary, emergency amendment to § 2D1.1 (Unlawful Manufacturing, Importing, Exporting, or Trafficking (Including Possession with Intent to Commit These Offenses) Attempt and Conspiracy).

(3) List I Chemical Offenses.—Pursuant to section 3651 of the Methamphetamine Anti-Proliferation Act of 2000, the Commission has promulgated a temporary, emergency amendment to §§ 2D1.1 and 2D1.11 (Unlawfully Distributing, Importing, Exporting or Possessing a Listed Chemical; Attempt or Conspiracy).

(4) Human Trafficking Offenses.—Pursuant to section 112(b) of the Victims of Trafficking and Violence Protection Act of 2000, Pub. L. 106—386, the Commission has promulgated a temporary, emergency amendment to §§ 2G1.1 (Promoting Prostitution or Prohibited Sexual Conduct), 2G2.1 (Sexually Exploiting a Minor by Production of Sexually Explicit Visual or Printed Material; Custodian Permitting Minor to Engage in Sexually Explicit Conduct; Advertisement for Minors to Engage in Production), and 2H4.1 (Peonage, Involuntary Servitude, and Slave Trade), and has promulgated a new guideline at § 2H4.2 (Willful Violations of the Migrant and Seasonal Agricultural Worker Protection Act).

(B) Non-Emergency Amendments—Pursuant to its authority under 28 U.S.C. 994(a) and (p) and several congressional directives more fully described herein, the Commission has promulgated additional, non-emergency amendments to the sentencing guidelines, policy statements, commentary, and statutory index.

This notice sets forth the amendments and the season for each amendment.

DATES:

The Commission has specified an effective date of May 1, 2001, for the emergency amendments set forth in Part (A) of this notice and an effective date of November 1, 2001, for the non-emergency amendments set forth in Part (B) of this notice.

FOR FURTHER INFORMATION CONTACT:

Michael Courlander, Public Affairs Officer, 202-502-4590. The amendments set forth in this notice also may be accessed through the Commission's website at

www.ussc.gov.

SUPPLEMENTARY INFORMATION:

The United States Sentencing Commission is an independent agency in the judicial branch of the United States Government. The Commission promulgates sentencing guidelines and policy statements for federal sentencing courts pursuant to 28 U.S.C. 994(a). The Commission also periodically reviews and revises previously promulgated guidelines pursuant to 28 U.S.C. 994(o) and submits guidelines amendments to the Congress not later than the first day of May each year pursuant to 28 U.S.C. 994(p).

(A) Emergency Amendments.—In January 2001, the Commission published options for promulgating the emergency amendments set forth herein (

see

66 FR 7962, January 26, 2001). The Commission held a public hearing on the proposed amendments in Washington, DC, on March 19, 2001. After a review of hearing testimony and additional public comment, the Commission promulgated the emergency amendments set forth herein. The Commission specified an effective date of May 1, 2001, for these amendments.

(1) “Ecstasy”.—The Ecstasy Anti-Proliferation Act of 2000 instructed the Commission to provide increased penalties for the manufacture, importation, exportation, or trafficking of “Ecstasy”. The directive specifically required the Commission to increase the base offense level for 3,4-Methylenedioxymethamphetamine (MDMA), 3,4-Methylenedioxyamphetamine (MDA), 3,4-Methylenedioxy-N-ethylamphetamine (MDEA), and Paramethoxymethamphetamine (PMA). The amendment amends the Drug Equivalency Tables in 1A2D1.1 to increase substantially the marihuana equivalencies for the specified controlled substances, which has the effect of substantially increasing the penalties for offenses involving “Ecstasy”.

(2) Amphetamine.—Section 3611 of the Methamphetamine Anti-Proliferation Act of 2000 directed the Commission to provide increased guideline penalties for amphetamine offenses such that those penalities are comparable to the base offense level for methamphetamine offenses. This amendment revises § 2D1.1 to include amphetamine in the Drug Quantity Table in subsection (c) of that guideline. This amendment also treats amphetamine and methamphetamine identically, at a 1:1 ratio, because of the similarities of the two substances.

(3) List I Chemicals.—Section 3651 of the Methamphetamine Anti-Proliferation Act of 2000 directed the Commission to “provide increased penalties for offenses involving ephedrine, phenylpropanolamine (PPA), or pseudoephedrine (including their salts, optical isomers, and salts of optical isomers) to correspond to the quality of controlled substance that reasonably could have been manufactured using the quality of ephedrine, PPA, and pseudoephedrine possessed or distributed.” This amendment provides a new chemical quantity table in § 2D1.11 specifically for ephedrine, pseudoephedrine, and phenylpropanolamine (PPA). The table, which has a maximum based offense level of level 38, ties the base offense levels for these chemicals to the base offense levels for methamphetamine (actual) set forth in § 2D1.1. The amendment also makes conforming changes to the commentary in §§ 2D1.11 and 2D1.1.

(4) Human Trafficking.—This amendment implements the congressional directive in section 112(b) of the Victims of Trafficking and Violence Protection Act of 2000, Pub. L. 106-386. The directive requires the Commission to amend, if appropriate, the guidelines applicable to human trafficking (

i.e.,

peonage, involuntary servitude, and forced labor) offenses. It also requires the Commission to ensure that the guidelines “are sufficiently stringent to deter and adequately reflect the heinous nature of these offenses.” This amendment (i) creates a new

guideline, § 2H4.2 (Willful Violations of the Migrant and Seasonal Agricultural Worker Protection Act); (ii) refers violations of four new statutes, 18 U.S.C. 1589 (Forced Labor), 1590 (Trafficking with Respect to Peonage, Involuntary Servitude or Forced Labor), 1591 (Sex Trafficking of Children by Force, Fraud or Coercion) and 1952 (Unlawful Conduct with Respect to Documents in Furtherance of Peonage, Involuntary Servitude, or Forced Labor) to the appropriate guidelines; and (iii) makes changes, consistent with the directive, which both enhance sentences and reflect changes to three existing statutes: 18 U.S.C. 1581(a) (Peonage), 1583 (Enticement into Slavery) and 1584 (Sale into Involuntary Servitude).

(B) Non-Emergency Amendments.—Section 994 of title 28, United States Code, authorizes the Commission to promulgate sentencing guidelines and policy statements for federal courts.

See

28 U.S.C. 994(a). Additionally, 28 U.S.C. 994 directs the Commission periodically to review and revise guidelines previously promulgated (

see

28 U.S.C. 994(o)) and authorizes its to submit guidelines amendments to the Congress at or after the beginning of a regular session of Congress but not later than May 1 (

see

18 U.S.C. 994(p)). Absent action of Congress to the contrary, submitted amendments become effective by operation of law on the date specified by the Commission (generally November 1 of the year in which the amendments are submitted to Congress).

Notice of proposed amendments was published in the

Federal Register

on November 7, 2000 (

see

65 FR 66792), and January 26, 2001 (

see

66 FR 7962). The Commission held a public hearing on the proposed amendments in Washington, DC on March 19, 2001. After a review of hearing testimony and additional public comment, the Commission promulgated the amendments set forth herein (including amendments to make permanent the temporary, emergency amendments set forth in Part (A) of this notice). On May 1, 2001, the Commission submitted these amendments to Congress and specified an effective date of November 1, 2001.

Authority:

28 U.S.C. 994(a), (o), and (p); USSC Rule of Practice and Procedure 4.1.

Diana E. Murphy,

Chair.

(A) Emergency Amendments to the Sentencing Guidelines, Policy Statements, and Official Commentary, Effective May 1, 2001.

Amendment:

The Commentary to § 2D1.1 captioned “Application Notes” is amended in Note 10 in the Drug Equivalency Tables in the subdivision captioned “LSD, PCP, and Other Schedule I and II Hallucinogens (and their immediate precursors)* ” in the line referenced to “MDA” by striking “50 gm” and inserting “500 gm”; in the line referenced to “MDMA” by striking “35 gm” and inserting “500 gm”; in the line referenced “MDEA” by striking “30 gm” and inserting “500 gm”; and by inserting “1 gm of Paramethoxymethamphetamine/PMA = 500 gm of marihuana” after the line referenced to “MDEA”.

Reason for Amendment:

This amendment addresses the directive in the Ecstasy Anti-Proliferation Act of 2000 (the “Act”), section 3664 of Pub. L. 106-310, which instructs the Commission to provide, under emergency amendment authority, increased penalties for the manufacture, importation, exportation, or trafficking of Ecstasy. The directive specifically requires the Commission to increase the base offense level for 3,4-Methylenedioxymethetamine (MDMA), 3,4-Methylenedioxyamphetamine (MDA), 3,4-Methylenedioxy-N-ethylamphetamine (MDEA), Paramethoxymethamphetamine (PMA), and any other controlled substance that is marketed as Ecstasy and that has either a chemical structure similar to MDMA or an effect on the central nervous system substantially similar to or greater than MDMA.

The amendment addresses the directive by amending the Drug Equivalency Table in § 2D1.1, Application Note 10, to increase substantially the marihuana equivalencies for the specified controlled substances, which has the effect of substantially increasing the penalties for offenses involving Ecstasy. The new penalties for Ecstasy trafficking provide penalties which, gram for gram, are more severe than those for powder cocaine. Currently under the Drug Equivalency Table, one gram of powder cocaine has a marihuana equivalency of 200 grams. This amendment sets the marihuana equivalency for one gram of Ecstasy at 500 grams.

There are a combination of reasons why the Commission has substantially increased the penalties in response to the congressional directive. Much evidence received by the Commission indicated that Ecstasy: (1) has powerful pharmacological effects; (2) has the capacity to cause lasting physical harms, including brain damage; and (3) is being abused by rapidly increasing numbers of teenagers and young adults. Indeed, the market for Ecstasy is overwhelmingly comprised of people under the age of 25 years.

Before voting to promulgate this amendment, the Commission considered whether the penalty levels for Ecstasy should be set at the same levels as for heroin (

i.e.

, one gram of heroin has a marihuana equivalency of 1000 grams) and decided that somewhat lesser penalties were appropriate for Ecstasy for a number of reasons: (1) The potential for addiction is greater with heroin; (2) heroin distribution often involves violence while, at this time, violence is not reported in Ecstasy markets; (3) because it is a narcotic and is often injected, the risk of death from overdose is much greater from heroin; and (4) because heroin is often injected, there are more secondary health consequences, such as infections and the transmission of the human immunodeficiency virus (HIV) and hepatitis.

Finally, based on information regarding Ecstasy trafficking patterns, the penalty levels chosen are appropriate and sufficient to target serious and high-level traffickers and to provide appropriate punishment, deterrence, and incentives for cooperation. The penalty levels chosen for Ecstasy offenses provide five year sentences for serious traffickers (those whose relevant conduct involved at least 800 pills) and ten year sentences for high-level traffickers (those whose relevant conduct involved at least 8,000 pills).

Amendment:

Section 2D1.1(c)(1) is amended by inserting after the fifth entry the following:

“15 KG or more of Amphetamine, or 1.5 KG or more of Amphetamine (actual);”.

Section 2D1.1(c)(2) is amended by inserting after the fifth entry the following:

“At least 5 KG but less than 15 KG of Amphetamine, or at least 500 G but less than 1.5 KG of Amphetamine (actual);”.

Section 2D1.1(c)(3) is amended by inserting after the fifth entry the following:

“At least 1.5 KG but less than 5 KG of Amphetamine, or at least 150 G but less than 500 G of Amphetamine (actual);”.

Section 2D1.1(c)(4) is amended by inserting after the fifth entry the following:

“At least 500 G but less than 1.5 KG of Amphetamine, or at least 50 G but less than 150 G of Amphetamine (actual);”.

Section 2D1.1(c)(5) is amended by inserting after the fifth entry the following:

“At least 350 G but less than 500 G of Amphetamine, or at least 35 G but

less than 50 G of Amphetamine (actual);”.

Section 2D1.1(c)(6) is amended by inserting after the fifth entry the following:

“At least 200 G but less than 350 G of Amphetamine, or at least 20 G but less than 35 G of Amphetamine (actual);”.

Section 2D1.1(c)(7) is amended by inserting after the fifth entry the following:

“At least 50 G but less than 200 G of Amphetamine, or at least 5 G but less than 20 G of Amphetamine (actual);”.

Section 2D1.1(c)(8) is amended by inserting after the fifth entry the following:

“At least 40 G but less than 50 G of Amphetamine, or at least 4 G but less than 5 G of Amphetamine (actual);”.

Section 2D1.1(c)(9) is amended by inserting after the fifth entry the following:

“At least 30 G but less than 40 G of Amphetamine, or at least 3 G but less than 4 G of Amphetamine (actual);”.

Section 2D1.1(c)(10) is amended by inserting after the fifth entry the following:

“At least 20 G but less than 30 G of Amphetamine, or at least 2 G but less than 3 G of Amphetamine (actual);”.

Section 2D1.1(c)(11) is amended by inserting after the fifth entry the following:

“At least 10 G but less than 20 G of Amphetamine, or at least 1 G but less than 2 G of Amphetamine (actual);”.

Section 2D1.1(c)(12) is amended by inserting after the fifth entry the following:

“At least 5 G but less than 10 G of Amphetamine, or at least 500 MG but less than 1 G of Amphetamine (actual);”.

Section 2D1.1(c)(13) is amended by inserting after the fifth entry the following:

“At least 2.5 G but less than 5 G of Amphetamine, or at least 250 MG but less than 500 MG of Amphetamine (actual);”.

Section 2D1.1(c)(14) is amended by inserting after the fifth entry the following:

“Less than 2.5 G of Amphetamine, or less than 250 MG of Amphetamine (actual);”.

Section 2D1.1(c) is amended in Note (B) of the “Notes to Drug Quantity Table” by inserting “, ‘Amphetamine (actual)’,” after “terms ‘PCP (actual)’ ”; by inserting “, amphetamine,” after “substance containing PCP”; and by inserting “, amphetamine (actual),” after “weight of the PCP (actual)”.

The Commentary to § 2D1.1 captioned “Application Notes” is amended in Note 9 by inserting “, amphetamine,” after “PCP”.

The Commentary to § 2D1.1 captioned “Application Notes” is amended in Note 10 in the Drug Equivalency Tables in the subdivision captioned “Cocaine and Other Schedule I and II Stimulants (and their immediate precursors)*” by striking “200 gm” after “1 gm of Amphetamine=” and inserting “2 kg”; and by inserting “1 gm of Amphetamine (Actual) = 20 kg of marihuana” after the line referenced to “Amphetamine”.

Reason for Amendment: This emergency amendment implements the directive in the Methamphetamine Anti-Proliferation Act of 2000, section 3611 of Pub. L. 106-310 (the “Act”), which directs the Commission to provide, under emergency amendment authority, increased guideline penalties for amphetamine such that those penalties are comparable to the base offense level for methamphetamine.

This amendment revised § 2D1.1 to include amphetamine in the Drug Quantity Table. This amendment also treats amphetamine and methamphetamine identically, at a 1:1 ratio (

i.e.

, the same quantities of amphetamine and methamphetamine would result in the same base offense level) because of the similarities of the two substances. Specifically, amphetamine and methamphetamine (1) chemically are similar; (2) are produced by a similar method and are trafficked in a similar manner; (3) share similar methods of use; (4) affect the same parts of the brain; and (5) have similar intoxicating effects. The amendment also distinguishes between pure amphetamine (

i.e.

, amphetamine (actual)) and amphetamine mixture in the same manner, and at the same quantities, as pure methamphetamine (

i.e.

, methamphetamine (actual)) and methamphetamine mixture, respectively. The amendment reflects the view that the 1:1 ratio is appropriate given the seriousness of these two controlled substances.

Amendment:

Section 2D1.11 is amended by striking subsection (d), captioned “Chemical Quantity Table*”; and by striking the Notes that follow subsection (d), captioned “*Notes”, and inserting the following:

“(

)(1)

Ephedrine, Pseudoephedrine, and Phenylpropanolamine Quantity Table

[Methamphetamine and Amphetamine Precursor Chemicals]

Quantity

Base

offense

level

(1) 3 KG or more of Ephedrine;

Level 38

3 KG or more of Phenylpropanolamine;

3 KG or More of Pseudoephedrine.

(2) At least 1 KG but less than 3 KG of Ephedrine;

Level 36

At least 1 KG but less than 3 KG of Phenylpropanolamine;

At least 1 KG but less than 3 KG of Pseudoephedrine.

(3) At least 300 G but less than 1 KG of Ephedrine;

Level 34

At least 300 G but less than 1 KG of Phenylpropanolamine;

At least 300 G but less than 1 KG of Pseudoephedrine.

(4) At least 100 G but less than 300 G of Ephedrine;

Level 32

At least 100 G but less than 300 G of Phenylpropanolamine;

At least 100 G but less than 300 G of Pseudoephedrine.

(5) At least 70 G but less than 100 G of Ephedrine;

Level 30

At least 70 G but less than 100 G of Phenylpropanolamine;

At least 70 G but less than 100 G of Pseudoephedrine.

(6) At least 40 G but less than 70 G of Ephedrine;

Level 28

At least 40 G but less than 70 G of Phenylpropanolamine;

At least 40 G but less than 70 G of Pseudoephedrine.

(7) At least 10 G but less than 40 G of Ephedrine;

Level 26

At least 10 G but less than 40 G of Phenylpropanolamine;

At least 10 G but less than 40 G of Pseudoephedrine.

(8) At least 8 G but less than 10 G of Ephedrine;

Level 24

At least 8 G but less than 10 G of Phenylpropanolamine;

At least 8 G but less than 10 G of Pseudoephedrine.

(9) At least 6 G but less than 8 G of Ephedrine;

Level 22

At least 6 G but less than 8 G of Phenylpropanolamine;

At least 6 G but less than 8 G of Pseudoephedrine.

(10) At least 4 G but less than 6 G of Ephedrine;

Level 20

At least 4 G but less than 6 G of Phenylpropanolamine;

At least 4 G but less than 6 G of Pseudoephedrine.

(11) At least 2 G but less than 4 G of Ephedrine;

Level 18

At least 2 G but less than 4 G of Phenylpropanolamine;

At least 2 G but less than 4 G of Pseudoephedrine.

(12) At least 1 G but less than 2 G of Ephedrine;

Level 16

At least 1 G but less than 2 G of Phenylpropanolamine;

At least 1 G but less than 2 G of Pseudoephedrine.

(13) At least 500 MG but less than 1 G of Ephedrine;

Level 14

At least 500 MG but less than 1 G of Phenylpropanolamine;

At least 500 MG but less than 1 G of Pseudoephedrine.

(14) Less than 500 MG of Ephedrine;

Level 12

Less than 500 MG of Phenylpropanolamine;

Less than 500 MG of Pseudoephedrine.

* Notes:

(A) Except as provided in Note (B), to calculate the base offense level in an offense that involves two or more chemicals, use the quantity of the single chemical that results in the greatest offense level, regardless of whether the chemicals are set forth in different tables or in different categories (

i.e.,

list I or list II) under subsection (d) of this guideline.

(B) To calculate the base offense level in an offense that involves two or more chemicals each of which is set forth in the Ephedrine, Pseudoephedrine, and Phenylpropanolamine Quantity Table, (i) aggregate the quantities of all such chemicals, and (ii) determine the base offense level corresponding to the aggregate quantity.

(C) In a case involving ephedrine, pseudoephedrine, or phenylpropanolamine tablets, use the weight of the ephedrine, pseudoephedrine, or phenylpropanolamine contained in the tablets, not the weight of the entire tablets, in calculating the base offense level.”.

(

)(2) Chemical Quantity Table*

[All other precursor chemicals]

Listed chemicals and quantity

Base

offense

level

(1) List I Chemicals

Level 30

890 G or more of Benzaldehyde;

20 KG or more of Benzyl Cyanide;

200 G or more of Ergonovine;

400 G or more of Ergotamine;

20 KG or more of Ethylamine;

2.2 KG or more of Hydriodic Acid;

320 KG or more of Isosafrole;

200 G or more of Methylamine;

500 KG or more of N-Methylephedrine;

500 KG or more of N-Methylpseudoephedrine;

625 G or more of Nitroethane;

10 KG or more of Norpseudoephedrine;

20 KG or more of Phenylacetic Acid;

10 KG or more of Piperidine;

320 KG or more of Piperonal;

1.6 KG or more of Propionic Anhydride;

320 KG or more of Safrole;

400 KG or more of 3, 4-Methylenedioxyphenyl-2-propanone.

(2) List I Chemicals

Level 28

At least 267 G but less than 890 G of Benzaldehyde;

At least 6 KG but less than 20 KG of Benzyl Cyanide;

At least 60 G but less than 200 G of Ergonovine;

At least 120 G but less than 400 G of Ergotamine;

At least 6 KG but less than 20 KG of Ethylamine;

At least 660 G but less than 2.2 KG of Hydriodic Acid;

At least 96 KG but less than 320 KG of Isosafrole;

At least 60 G but less than 200 G of Methylamine;

At least 150 KG but less than 500 KG of N-Methylephedrine;

At least 150 KG but less than 500 KG of N-Methylpseudoephedrine;

At least 187.5 G but less than 625 G of Nitroethane;

At least 3 KG but less than 10 KG of Norpseudoephedrine;

At least 6 KG but less than 20 KG of Phenylacetic Acid;

At least 3 KG but less than 10 KG of Piperidine;

At least 96 KG but less than 320 KG of Piperonal;

At least 480 G but less than 1.6 KG of Propionic Anhydride;

At least 96 KG but less than 320 KG of Safrole;

At least 120 KG but less than 400 KG of 3,4-Methylenedioxyphenyl-2-propanone;

List II Chemicals

11 KG or more of Acetic Anhydride;

1175 KG or more of Acetone;

20 KG or more of Benzyl Chloride;

1075 KG or more of Ethyl Ether;

1200 KG or more of Methyl Ethyl Ketone;

10 KG or more of Potassium Permanganate;

1300 KG or more of Toluene.

Level 26

(3) List I Chemicals

At least 89 G but less than 267 G of Benzaldehyde;

At least 2 KG but less than 6 KG of Benzyl Cyanide;

At least 20 G but less than 60 G of Ergonovine;

At least 40 G but less than 120 G of Ergotamine;

At least 2 KG but less than 6 KG of Ethylamine;

At least 220 G but less than 660 G of Hydriodic Acid;

At least 32 KG but less than 96 KG of Isosafrole;

At least 20 G but less than 60 G of Methylamine;

At least 50 KG but less than 150 KG of N-Methylephedrine;

At least 50 KG but less than 150 KG of N-Methylpseudoephedrine;

At least 62.5 G but less than 187.5 G of Nitroethane;

At least 1 KG but less than 3 KG of Norpseudoephedrine;

At least 2 KG but less than 6 KG of Phenylacetic Acid;

At least 1 KG but less than 3 KG of Piperidine;

At least 32 KG but less than 96 KG of Piperonal;

At least 160 G but less than 480 G of Propionic Anhydride;

At least 32 KG but less than 96 KG of Safrole;

At least 40 KG but less than 120 KG of 3,4-Methylenedioxyphenyl-2-propanone;

List II Chemicals

At least 3.3 KG but less than 11 KG of Acetic Anhydride;

At least 352.5 KG but less than 1175 KG of Acetone;

At least 6 KG but less than 20 KG of Benzyl Chloride;

At least 332.5 KG but less than 1075 KG of Ethyl Ether;

At least 360 KG but less than 1200 KG of Methyl Ethyl Ketone;

At least 3 KG but less than 10 KG of Potassium Permanganate;

At least 390 KG but less than 1300 KG of Toluene.

(4) List I Chemicals

Level 24

At least 62.3 G but less than 89 G of Benzaldehyde;

At least 1.4 KG but less than 2 KG of Benzyl Cyanide;

At least 14 G but less than 20 G of Ergonovine;

At least 28 G but less than 40 G of Ergotamine;

At least 1.4 KG but less than 2 KG of Ethylamine;

At least 154 G but less than 220 G of Hydriodic Acid;

At least 22.4 KG but less than 32 KG of Isosafrole;

At least 14 G but less than 20 G of Methylamine;

At least 35 KG but less than 50 KG of N-Methylephedrine;

At least 35 KG but less than 50 KG of N-Methylpseudoephedrine;

At least 43.8 G but less than 62.5 of Nitroethane;

At least 700 G but less than 1 KG of Norpseudoephedrine;

At least 1.4 KG but less than 2 KG of Phenylacetic Acid;

At least 700 G but less than 1 KG of Piperidine;

At least 22.4 KG but less than 32 KG of Piperonal;

At least 112 G but less than 160 G of Propionic Anhydride;

At least 22.4 KG but less than 32 KG of Safrole;

At least 28 KG but less than 40 KG of 3, 4-Methylenedioxyphenyl-2-propanone;

List II Chemicals

At least 1.1 KG but less than 3.3 KG of Acetic Anhydride;

At least 117.5 KG but less than 352.5 KG of Acetone;

At least 2 KG but less than 6 KG of Benzyl Chloride;

At least 107.5 but less than 322.5 KG of Ethyl Ether;

At least 120 KG but less than 360 KG of Methyl Ethyl Ketone;

At least 1 KG but less than 3 KG of Potassium Permanganate;

At least 130 KG but less than 390 KG of Toluene.

(5) List I Chemicals

Level 22

At least 35.6 G but less than 62.3 of Benzaldehyde;

At least 800 G but less than 1.4 KG of Benzyl Cyanide;

At least 8 G but less than 14 G of Ergonovine;

At least 16 G but less than 28 G of Ergotamine;

At least 800 G but less than 1.4 KG of Ethylamine;

At least 88 G but less than 154 G of Hydriodic Acid;

At least 12.8 KG but less than 22.4 KG of Isosafrole;

At least 8 G but less than 14 G of Methylamine;

At least 20 KG but less than 35 KG of N-Methylephedrine;

At least 20 KG but less than 35 KG of N-Methylpseudoephedrine;

At least 25 G but less than 43.8 G of Nitroethane;

At least 400 G but less than 700 G of Norpseudoephedrine;

At least 800 G but less than 1.4 KG of Phenylacetic Acid;

At least 400 G but less than 700 G of Piperidine;

At least 12.8 KG but less than 22.4 KG of Piperonal;

At least 64 G but less than 112 G of Propionic Anhydride;

At least 12.8 KG but less than 22.4 KG of Safrole;

At least 16 KG but less than 28KG of 3,4-Methylenedioxyphenyl-2-propanone;

List II Chemicals

At least 726 G but less than 1.1 KG of Acetic Anhydride;

At least 82.25 KG but less than 117.5 KG of Acetone;

At least 1.4 KG but less than 2 KG of Benzyl Chloride;

At least 75.25 KG but less than 107.5 KG of Ethyl Ether;

At least 84 KG but less than 120 KG of Methyl Ethyl Ketone;

At least 700 G but less than 1 KG of Potassium Permanganate;

At least 91 KG but less than 130 KG of Toluene.

(6) List I Chemicals

Level 20

At least 8.9 G but less than 35.6 G of Benzaldehyde;

At least 200 G but less than 800 G of Benzyl Cyanide;

At least 2 G but less than 8 G of Ergonovine;

At least 4 G but less than 16 G of Ergotamine;

At least 200 G but less than 800 G of Ethylamine;

At least 22 G but less than 88 G of Hydriodic Acid;

At least 3.2 KG but less than 12.8 KG of Isosafrole;

At least 2 G but less than 8 G of Methylamine;

At least 5 KG but less than 20 KG of N-Methylephedrine;

At least 5 KG but less than 20 KG of N-Methylpseudoephedrine;

At least 6.3 G but less than 25 G of Nitroethane;

At least 100 G but less than 400 of Norpseudoephedrine;

At least 200 G but less than 800 G of Phenylacetic Acid;

At least 100 G but less than 400 G of Piperidine;

At least 3.2 KG but less than 12.8 KG of Piperonal;

At least 16 G but less than 64 G of Propionic Anhydride;

At least 3.2 KG but less than 12.8 KG of Safrole;

At least 4 KG but less than 16 KG of 3,4-Methylenedioxyphenyl-2-propanone;

List II Chemicals

At least 440 G but less than 726 G of Acetic Anhydride;

At least 47 KG but less than 82.25 KG of Acetone;

At least 800 G but less than 1.4 KG of Benzyl Chloride;

At least 43 KG but less than 75.25 KG of Ethyl Ether;

At least 48 KG but less than 84 KG of Methyl Ethyl Ketone;

At least 400 G but less than 700 g of Potassium Permanganate;

(7) List I Chemicals

Level 18

At least 7.1 G but less than 8.9 G of Benzaldehyde;

At least 160 G but less than 200 G of Benzyl Cyanide;

At least 1.6 G but less than 2 G of Ergonovine;

At least 3.2 G but less than 4 G of Ergotamine;

At least 160 G but less than 200 G of Ethylamine;

At least 17.6 G but less than 22 G of Hydriodic Acid;

At least 2.56 KG but less than 3.2 KG of Isosafrole;

At least 1.6 G but less than 2 G of Methylamine;

At least 4 KG but less than 5 KG of N-Methylephedrine;

At least 4 KG but less than 5 KG of N-Methylpseudoephedrine;

At least 5 G but less than 6.3 G of Nitroethane;

At least 80 G but less than 100 G of Norpseudoephedrine;

At least 160 G but less than 200 G of Phenylacetic Acid;

At least 80 G but less than 100 G of Piperidine;

At least 2.56 KG but less than 3.2 KG of Piperonal;

At least 12.8 G but less than 16G of Propionic Anhydride;

At least 2.56 KG but less than 3.2 KG of Safrole;

At least 3.2 KG but less than 4 KG of 3,4-Methylenedioxyphenyl-2-propanone;

List II Chemicals

At least 110 G but less than 440 G of Acetic Anhydride;

At least 11.75 KG but less than 47 KG of Acetone;

At least 200 G but less than 800 G of Benzyl Chloride;

At least 10.75 KG but less than 43 KG of Ethyl Ether;

At least 12 KG but less than 48 KG of Methyl Ethyl Ketone;

At least 100 G but less than 400 G of Potassium Permanganate;

At least 13 KG but less than 52 KG of Toluene.

(8) List I Chemicals

Level 16

3.6 KG or more of Anthranilic Acid;

At least 5.3 G but less than 7.1 G of Benzaldehyde;

At least 120 G but less than 160 G of Benzyl Cyanide;

At least 1.2 G but less than 1.6 G of Ergonovine;

At least 2.4 G but less than 3.2 G of Ergotamine;

At least 120 G but less than 160 G of Ethylamine;

At least 13.2 G but less than 17.6 G of Hydriodic Acid;

At least 1.92 KG but less than 2.56 KG of Isosafrole;

At least 1.2 G but less than 1.6 G of Methylamine;

4.8 KG or more of N-Acetylanthranilic Acid;

At least 3 KG but less than 4 KG of N-Methylephedrine;

At least 3 KG but less than 4 KG of N-Methylpseudoephedrine;

At least 3.8 G but less than 5 G of Nitroethane;

At least 60 G but less than 80 G of Norpseudoephedrine;

At least 120 G but less than 160 G of Phenylacetic Acid;

At least 60 G but less than 80 G of Piperidine;

At least 1.92 KG but less than 2.56 KG of Piperonal;

At least 9.6 G but less than 12.8 G of Propionic Anhydride;

At least 1.92 KG but less than 2.56 KG of Safrole;

At least 2.4 KG but less than 3.2 KG of 3, 4-MethylenedioxyphenyL-2-propanone;

List II Chemicals

At least 88 G but less than 110 G of Acetic Anhydride;

At least 9.4 KG but less than 11.75 KG of Acetone;

At least 160 G but less than 200 G of Benzyl Chloride;

At least 8.6 KG but less than 10.75 KG of Ethyl Ether;

At least 9.6 KG but less than 12 KG of Methyl Ethyl Ketone;

At least 80 G but less than 100 G of Potassium Permanganate;

At least 10.4 KG but less than 13 KG of Toluene.

(9) List I Chemicals

Level 14

At least 2.7 KG but less than 3.6 KG of Anthranilic Acid;

At least 3.6 G but less than 5.3 G of Benzaldehyde;

At least 80 G but less than 120 G of Benzyl Cyanide;

At least 800 MG but less than 1.2 G of Ergonovine;

At least 1.6 G but less than 2.4 G of Ergotamine;

At least 80 G but less than 120 G of Ethylamine;

At least 8.8 G but less than 13.2 G of Hydriodic Acid;

At least 1.44 KG but less than 1.92 KG of Isosafrole;

At least 800 MG but less than 1.2 G of Methylamine;

At least 3.6 KG but less than 4.8 KG of N-Acetylanthraniclic Acid;

At least 2.25 KG but less than 3 KG of N-Methylephedrine;

At least 2.25 KG but less than 3 KG of N-Methylpseudoephedrine;

At least 2.5 G but less than 3.8 G of Nitroethane;

At least 40 G but less than 60 G of Norpseudoephedrine;

At least 80 G but less than 120 G of Phenylacetic Acid;

At least 40 G but less than 60 G of Piperidine;

At least 1.44 KG but less than 1.92 KG of Piperonal;

At least 7.2 G but less than 9.6 G of Propionic Anhydride;

At least 1.44 KG but less than 1.92 KG of Safrole;

At least 1.8 KG but less than 2.4 KG of 3, 4-Methylenedioxyphenyl-2-propanone;

List II Chemicals

At least 66 G but less than 88 G of Acetic Anhydride;

At least 7.05 KG but less than 9.4 KG of Acetone;

At least 120 G but less than 160 G of Benzyl Chloride;

At least 6.45 KG but less than 8.6 KG of Ethyl Ether;

At least 7.2 KG but less than 9.6 KG of Methyl Ethyl Ketone;

At least 60 G but less than 80 G of Potassium Permanganate;

At least 7.8 KG but less than 10.4 KG of Toluene.

(10) List I Chemicals

Level 12

Less than 2.7 KG of Anthranilic Acid;

Less than 3.6 G of Benzaldehyde;

Less than 80 G of Benzyl Cyanide;

Less than 800 MG of Ergonovine;

Less than 1.6 G of Ergotamine;

Less than 80 G of Ethylamine;

Less than 8.8 G of Hydriodic Acid;

Less than 1.44 KG of Isosafrole;

Less than 800 MG of Methylamine;

Less than 3.6 KG of N-Acetylanthranilic Acid;

Less than 2.25 KG of N-Methylephedrine;

Less than 2.25 KG of N-Methylpseudoephedrine;

Less than 2.5 G of Nitroethane;

Less than 40 G of Norpseudoephedrine;

Less than 80 G of Phenylacetic Acid;

Less than 40 G of Piperidine;

Less than 1.44 KG of Piperonal;

Less than 7.2 G of Propionic Anhydride;

Less than 1.44 KG of Safrole;

Less than 1.8 KG of 3,4-Methylenedioxyphenyl-2-propanone;

List II Chemicals

Less than 66 G of Acetic Anhydride;

Less than 7.05 KG of Acetone;

Less than 120 G of Benzyl Chloride;

Less than 6.45 KG of Ethyl Ether;

Less than 7.2 KG of Methyl Ethyl Ketone;

Less than 60 G of Potassium Permanganate;

Less than 7.8 KG of Toluene.

Notes:

i.e.,

list I or list II) under subsection (d) of this guideline.

The commentary to § 2D1.11 captioned “Application Notes” is amended by striking Note 4 in its entirety and inserting the following:

“4. Cases Involving Multiple Chemicals.—

(A) Determining the Base Offense Level for Two or More Chemicals.—Except as provided in subdivision (B), if the offense involves two or more chemicals, use the quantity of the single chemical that results in the greatest offense level, regardless of whether the chemicals are set forth in different tables or in different categories. (

i.e.,

list I or list II) under subsection (d) of this guideline.

Example:

The defendant was in possession of five kilograms of ephedrine and 300 grams of hydriodic acid. Ephedrine and hydriodic acid typically are used together in the same manufacturing process to manufacture methamphetamine. The base offense level for each chemical is calculated separately and the chemical with the higher base offense level is used. Five kilograms of ephedrine result in a base offense level of level 38; 300 grams of hydriodic acid result in a base offense level of level 26. In this case, the base offense level would be level 38.

(B) Determining the Base Offense Level for Offenses involving Ephedrine, Pseudoephedrine, or Phenylpropanolamine.—If the offense involves two or more chemicals each of which is set forth in the Ephedrine, Pseudoephedrine, and Phenylpropanolamine Quantity Table, (i) aggregate the quantities of all such chemicals, and (ii) determine the base offense level corresponding to the aggregate quantity.

Example:

The defendant was in possession of 80 grams of ephedrine and 50 grams of phenylpropanolamine, an aggregate quantity of 130 grams of such chemicals. The base offense level corresponding to that aggregate quantity is level 32.

(C) Upward Departure.—In a case involving two or more chemicals used to manufacture different controlled substances, or to manufacture one controlled substance by different manufacturing processes, an upward departure may be warranted if the offense level does not adequately address the seriousness of the offense.”.

The Commentary to § 2D1.11 captioned “Application Notes” is amended by striking Notes 5 and 6 in their entirety; and by redesignating Notes 7 and 8 as Notes 5 and 6, respectively.

The Commentary to § 2D1.11 captioned “Background” is amended in the first sentence by inserting “(including ephedrine, pseudoephedrine, and phenylpropanolamine)” after “list I chemicals”.

The Commentary to 2D1.1 captioned “Application Notes” is amended in Note 10 in the “Drug Equivalency Tables” by inserting after the subdivision captioned “Schedule V Substances * * *” the following new subdivision:

“List I Chemicals (relating to the manufacture of amphetamine or methamphetamine)* * *

1 gm of Ephedrine = 10 kg of marihuana

1 gm of Phenylpropanolamine = 10 kg of marihuana

1 gm of Pseudoephedrine = 10 kg of marihuana

* * * Provided, that in a case involving ephedrine, pseudoephedrine, or phenylpropanolamine tablets, use the weight of the ephedrine, pseudoephedrine, or phenylpropanolamine contained in the tablets, not the weight of the entire tablets, in calculating the base offense level.”.

Reason for Amendment:

This amendment is in response to the three-part directive in section 3651 of the Methamphetamine Anti-Proliferation Act of 2000, Pub. L. 106-310 (the “Act”), regarding enhanced punishment for trafficking in List I chemicals. That section requires the Commission to promulgate an amendment implementing the directive under emergency amendment authority.

First, this amendment provides a new chemical quantity table specifically for ephedrine, pseudoephedrine, and phenylpropanolamine (PPA). The table ties the base offense levels for these chemicals to the base offense levels for methamphetamine (actual) set forth in § 2D1.1, assuming a 50 percent actual yield of the controlled substance from the chemicals. (Methamphetamine (actual) is used rather than methamphetamine mixture because ephedrine, pseudoephedrine, and PPA produce methamphetamine (actual)). This yield is based on information provided by the Drug Enforcement Administration (DEA) that the typical yield of these substances for clandestine laboratories is 50 to 75 percent.

This new chemical quantity table has a maximum base offense level of level 38 (as opposed to a maximum base offense level of level 30 for all other precursor chemicals). Providing a maximum base offense level of the level 38 complies with the directive to establish penalties for these precursors that “correspond to the quantity of controlled substance that could have reasonably been manufactured using the quantity of ephedrine, phenylpropanolamine, or pseudoephedrine possessed or distributed.” Additionally, this adjustment will have an impact on the relationship between §§ 2D1.1 and 2D1.11 by eliminating the six-level distinction that currently exists between offenses that involve intent to manufacture methamphetamine and offenses that involve an attempt to manufacture methamphetamine, at least for offenses involving ephedrine, pseudoephedrine, and PPA.

This amendment eliminates the Ephedrine Equivalency Table in § 2D1.11 and, in its place, provides an instruction for the court to determine the base offense level in cases involving multiple precursors (other than ephedrine, pseudoephedrine, or PPA) by using the quantity of the single chemical resulting in the greatest offense level. An upward departure is provided for cases in which the offense level does not adequately address the seriousness of the offense.

However, this amendment provides an exception to the rule for offenses that involve a combination of ephedrine, pseudoephedrine, or PPA because these chemicals often are used in the same manufacturing process. In a case that involves two or more of these chemicals, the base offense level will be determined using the total quantity of these chemicals involved. The purpose of this exception is twofold: (1) Any of the three primary precursors in the same table can be combined without difficulty; and (2) studies conducted by the DEA indicate that because the manufacturing process for amphetamine and methamphetamine is identical, there are cases in which the different precursors are included in the same batch of drugs. If the chemical is PPA, amphetamine results; and if the chemical is ephedrine, methamphetamine results.

Second, the amendment adds to the Drug Equivalency Tables in § 2D1.1 a conversion table for these precursor chemicals, providing for a 50 percent

conversion ratio. This is based on data from the DEA that the actual yield from ephedrine, pseudoephedrine, or PPA typically is in the range of 50 to 75 percent. The purpose of this part of the amendment is to achieve the same punishment level (as is achieved by the first part of this amendment) for an offense involving any of these precursor chemicals when such offense involved the manufacturer of methamphetamine and, as a result, is sentenced under § 2D1.1 pursuant to the cross reference in § a2D1.11.

Third, this amendment increases the base offense level for Benzaldehyde, Hydriodic Acid, Methylamine, Nitroethane, and Norpseudoesphedrine by re-calibrating these levels to the appropriate quantity of methamphetamine (actual) that could be produced assuming a 50 percent yield of chemical to drug and retaining a cap at level 30. Previously, these chemicals had been linked to methamphetamine (mixture) penalty levels. Based on a study conducted by the DEA, ephedrine and pseudoephedrine are the primary precursors used to make methamphetamine in the United States. Phenylproponolamine is the primary precursor used to make amphetamine. Unlike the five additional List I chemicals, the chemical structures of ephedrine, pseudoephedrine, and PPA are so similar to the resulting drug (

i.e.,

methamphetamine or amphetamine) that the manufacture of methamphetamine or amphetamine from ephedrine, pseudoephedrine, or PPA is a very simple one-step synthesis which anyone can perform using a variety of chemical reagents. The manufacture of methamphetamine or amphetamine from the five additional List I chemicals is a more complex process which requires a heightened level of expertise.

Amendment:

The Commentary to § 2G1.1 captioned “Statutory Provisions” is amended by inserting “1591,” before “2421”.

The Commentary to § 2G1.1 captioned “Application Notes” is amended in Note 2 in the forth sentence by adding “(B)” after “purposes of subsection (b)(1)”.

The Commentary to § 2G1.1 captioned “Application Notes” is amended by adding at the end the following:

“12. Upward Departure Provisions.—An upward departure may be warranted in either of the following circumstances:

(A) The defendant was convicted under 18 U.S.C. 1591 and the offense involved a victim who had not attained the age of 14 years.

(B) The offense involved more than 10 victims.”.

The Commentary to § 2G1.1 captioned “Background” is amended by adding at the end the following paragraph:

“This guideline also covers offenses under section 1591 of title 18, United States Code. These offenses involve recruiting or transporting a person in interstate commerce knowing either that (1) force, fraud, or coercion will be used to cause the person to engage in a commercial sex act; or (2) the person (A) had not attained the age of 18 years; and (B) will be caused to engage in a commercial sex act.”.

The Commentary to § 2G2.1 captioned “Statutory Provisions” is amended by inserting “1591,” before “2251(a)”.

The Commentary to § 2G2.1 captioned “Application Notes” is amended by adding at the end the following:

“6. Upward Departure Provisions.—An upward departure may be warranted in either of the following circumstances:

(A) The defendant was convicted under 18 U.S.C. 1591 and the offense involved a victim who had not attained the age of 14 years.

(B) The offense involved more than 10 victims.”.

Section 2H4.1 is amended by striking subsection (a) in its entirety and inserting the following:

“(a) Base Offense Level (Apply the greater):

(1) 22; or

(2) 18, if the defendant was convicted of an offense under 18 U.S.C. 1592.”.

Section 2H4.1(b) is amended by striking subdivision (2) in its entirety and inserting the following:

“(2) If (A) a dangerous weapon was used, increase by 4 levels; or (B) a dangerous weapon was brandished, or the use of a dangerous weapon was threatened, increase by 2 levels.”.

The Commentary to § 2H4.1 captioned “Statutory Provisions” is amended by striking “1588” and inserting “1590, 1592”.

The Commentary to § 2H4.1 captioned “Application Notes” is amended in Note 1 in the second paragraph by inserting “other” after “that a firearm or”; and by adding after “otherwise used.” the following:

“ ‘The use of a dangerous weapon was threatened’ means that the use of a dangerous weapon was threatened regardless of whether a dangerous weapon was present.”.

Chapter Two, Part H, is amended in Subpart 4 by adding at the end the following:

“§ 2H4.2. Willful Violations of the Migrant and Seasonal Agricultural Worker Protection Act

(a) Base Offense Level: 6

(b) Specific Offense Characteristics

(1) If the offense involved (i) serious bodily injury, increase by 4 levels; or (ii) bodily injury, increase by 2 levels.

(2) If the defendant committed any part of the instant offense subsequent to sustaining a civil or administrative adjudication for similar misconduct, increase by 2 levels.

Commentary

Statutory Provision:

29 U.S.C. 1851.

Application Notes

1. Definitions.—For purposes of subsection (b)(1), ‘bodily injury’ and ‘serious bodily injury’ have the meaning given those terms in Application Note 1 of the Commentary to § 1B1.1 (Application Instructions).

2. Application of Subsection (b)(2).—Section 1851 of title 29, United States Code, covers a wide range of conduct. Accordingly, the enhancement in subsection (b)(2) applies only if the instant offense is similar to previous misconduct that resulted in a civil or administrative adjudication under the provisions of the Migrant and Seasonal Agricultural Worker Protection Act (29 U.S.C. § 1801 et. seq.).”.

Section 5E1.1(a)(1) is amended by inserting “§ 1593,” after “18 U.S.C.”.

The Commentary to § 5E1.1 captioned “Background” is amended in the first paragraph by inserting “§ 1593,” after “18 U.S.C.§§”.

Appendix A (Statutory Index) is amended in the line referenced to “18 U.S.C. § 241” by inserting “, 2H4.1” after “2H2.1”.

Appendix A (Statutory Index) is amended by inserting after the line referenced to “18 U.S.C. 1588” the following new lines:

18 U.S.C. 1590 2H4.1

18 U.S.C. 1591 2G1.1, 2G2.1

18 U.S.C. 1592 2H4.1”.

Appendix A (Statutory Index) is amended by inserting after the line referenced to “29 U.S.C. 1141” the following:

“29 U.S.C. 1851 2H4.2”.

Reason for Amendment:

In promulgating this amendment, the Commission is cognizant of the extraordinarily serious nature of offenses that involve trafficking in human lives. This amendment is in response to the directive found at section 112(b) of the Victims of trafficking and Violence Protection Act of 2000 (the “Act”). Pub. L. 106-386. The Commission expects to consider further revisions and additions to the specific offense characteristics and punishment levels for these offenses, such as the possibility of providing an alternative base offense level in § 2G1.1

(Promoting Prostitution or Prohibited Sexual Conduct) for convictions under 18 U.S.C. 1591 involving victims under the age of 14 years.

The directive confers emergency authority on the Commission to amend the federal sentencing guidelines to reflect changes to 18 U.S.C. 1581(a) (Peonage), 1583 (Enticement into Slavery), and 1584 (Sale into Involuntary Servitude). The Commission also is directed to consider how to address four new statutes: 18 U.S.C. 1589 (Forced Labor); 1590 (Trafficking with Respect to Peonage, Involuntary Servitude or Forced Labor); 1591 (Sex Trafficking of Children by Force, Fraud or Coercion); and 1592 (Unlawful Conduct with Respect to Documents in Furtherance of Peonage, Involuntary Servitude or Forced Labor).

Specifically, the Commission is directed to “review and, if appropriate, amend the sentencing guidelines applicable to * * * the trafficking of persons including * * * peonage, involuntary servitude, slave trade offenses, and possession, transfer or sale of false immigration documents in furtherance of trafficking, and the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act.”

The Commission further is directed to “take all appropriate measures to ensure that these sentencing guidelines . . . are sufficiently stringent to deter and adequately reflect the heinous nature of these offenses.” The Commission also is directed to “consider providing sentencing enhancements” in cases which involve: (1) A large number of victims; (2) a pattern of continued and flagrant violations; (3) the use or threatened use of a dangerous weapon; or (4) the death or bodily injury of any person.

To address this multi-faceted directive, this amendment makes changes to several existing guidelines and creates a new guideline for criminal violations of the Migrant and Seasonal Agricultural Worker Protection Act. Although the directive instructs the Commission to amend the guidelines applicable to the Fair Labor Standards Act (29 U.S.C. 201 et. seq.), a criminal violation of the Fair Labor Standards Act is only a Class B misdemeanor.

See

29 U.S.C. 216. Thus, the guidelines are not applicable to those offenses.

The amendment references the new offense at 18 U.S.C. 1591 to § 2G1.1. Section 1591 punishes a defendant who participates in the transporting or harboring of a person, or who benefits from participating in such a venture, with the knowledge that force, fraud, or coercion will be used to cause that person to engage in a commercial sex act or with knowledge that the person is not 18 years old and will be forced to engage in a commercial sex act. Despite the statute's inclusion in a chapter of title 18 devoted mainly to peonage offenses, section 1591 offenses are more analogous to the offenses referenced to the prostitution guideline.

Section 1591 cases alternatively have been referred in Appendix A to § 2G2.1 (Sexually Exploiting a Minor by Production of Sexually Explicit Visual or Printed Material; Custodian Permitting Minor to Engage in Sexually Explicit Conduct; Advertisement for Minors to Engage in Production). This has been done in anticipation that some portion of section 1591 cases will involve children being forced or coerced to engage in commercial sex acts for the purpose of producing pornography. Such offenses, as recognized by the higher base offense level at § 2G2.1, are more serious because they both involve specific harm to an individual victim and further an additional criminal purpose, namely, commercial pornography.

The amendment maintains the view that § 2H4.1 (Peonage, Involuntary Servitude, and Slave Trade) continues to be an appropriate tool for determining sentences for violations of 18 U.S.C. 1581, 1583, and 1584. Section 2H4.1 also is designed to cover offenses under three new statutes, 18 U.S.C. 1589, 1590, and 1592. Section 1589 punishes defendants who provide or obtain the labor or services of another by the use of threats of serious harm or physical restraint against a person, or by a scheme or plan intended to make the person believe that if he or she did not perform the labor or services, he or she would suffer physical restraint or serious harm. This statute also applies to defendants who provide or obtain labor or services of another by abusing or threatening abuse of the law or the legal process.

See

18 U.S.C. 1589.

Section 1590 punishes defendants who harbor, transport, or are otherwise involved in obtaining, a person for labor or services. Section 1592 punishes a defendant who knowingly possesses, destroys, or removes an actual passport, other immigration document, or government identification document of another person in the course of a violation of § 1581 (peonage), § 1583 (enticement into slavery), § 1584 (sale into involuntary servitude), § 1589 (forced labor), § 1590 (trafficking with respect to these offenses), § 1591 (sex trafficking of children by force, fraud or coercion), § 1594(a) (attempts to violate these offenses). Section 1592 also punishes a defendant who, with intent to violate § 1581, § 1583, § 1584, § 1589, § 1590, or § 1591, knowingly possesses, destroys, or removes an actual passport, other immigration document, or government identification document of another person. These statutes prohibit the types of behaviors that have been traditionally sentenced under § 2H4.1.

The amendment provides an alternative, less punitive base offense level of level 18 for those who violate 18 U.S.C. 1592, an offense which limits participation in peonage cases to the destruction or wrongful confiscation of a passport or other immigration document. This alternative, lower base level reflects the lower statutory maximum sentence for § 1592 offenses, (

i.e.,

5 years).

Section 2H4.1(b)(2) has been expanded to provide a 4-level increase if a dangerous weapon was used and a 2-level increase if a dangerous weapon was brandished or its use was threatened. Currently, only actual use of a dangerous weapon is covered. This change reflects the directive to consider an enhancement for the “use or threatened use of a dangerous weapon.” The commentary to § 2H4.1 is amended to clarify that the threatened use of a dangerous weapon applies regardless of whether a dangerous weapon was actually present.

The amendment also creates a new guideline, § 2H4.2 (Willful Violations of the Migrant and Seasonal Agricultural Worker Protection Act), in response to the directive to amend the guidelines applicable to such offenses. These offenses, which have a statutory maximum sentence of one year imprisonment for first offenses and three years' imprisonment for subsequent offenses, currently are not referred to any specific guidelines. The amendment provides a base offense level of level 6 in recognition of the low statutory maximum sentences set for these cases by Congress. Further, these offenses typically involve violations of regulatory provisions. Setting the base offense level at level 6 provides consistency with guidelines for other regulatory offenses.

See, e.g.,

§§ 2N2.1 (Violations of Statutes and Regulations Dealing With Any Food, Drug, Biological Product, Device, Cosmetic, or Agricultural Product) and 2N3.1 (Odometer Laws and Regulations). Subsections (b)(1), an enhancement for bodily injury, and (b)(2), an enhancement applicable to defendants who commit the instant offense after previously sustaining a civil penalty for similar misconduct, have been established to respond to the directive that the Commission consider sentencing enhancement for these

offense characteristics. This section addresses the Department of Justice's and the Department of Labor's concern regarding prior administrative and civil adjudications.

This amendment also addresses that portion of section 112 of the Act that amends chapter 77 of title 18, United States Code, to provide mandatory restitution for peonage and involuntary servitude offenses. The amendment amends § 5E1.1 (Restitution) to include a reference to 18 U.S.C. 1593 in the guideline provision regarding mandatory restitution.

By enactment of various sentencing enhancements and encouraged upward departures for areas of concern identified by Congress, the Commission has provided for more severe sentences for perpetrators of human trafficking offenses in keeping with the conclusion that the offenses covered by this amendment are both heinous in nature and being committed with rapidly increasing frequency.

(B) Amendments to the Sentencing Guidelines, Policy Statements, and Official Commentary, Effective November 1, 2001.

Amendment:

The Commentary to § 1B1.2 captioned “Application Notes” is amended in Note 1 in the third sentence of the first paragraph by inserting “(written or made orally on the record)” after “agreement”.

The Commentary to § 1B1.2 captioned “Application Notes” is amended in Note 1 by striking the first two sentences of the third paragraph and inserting:

“As set forth in the first paragraph of this note, an exception to this general rule is that if a plea agreement (written or made orally on the record) contains a stipulation that establishes a more serious offense than the offense of conviction, the guideline section applicable to the stipulated offense is to be used. A factual statement or a stipulation contained in a plea agreement (written or made orally on the record) is a stipulation for purposes of subsection (a) only if both the defendant and the government explicitly agree that the factual statement or stipulation is a stipulation for such purposes. However, a factual statement or stipulation made after the plea agreement has been entered, or after any modification to the plea agreement has been made, is not a stipulation for purposes of subsection (a).”.

The Commentary to § 1B1.2 captioned “Application Notes” is amended in Note 1 in the third paragraph by striking “may be imposed” and inserting “shall be imposed”.

The Commentary to § 1B1.2 captioned “Application Notes” is amended in Note 1 in the second sentence of the fourth paragraph by striking “cases where” and inserting “a case in which”.

Reason for Amendment:

This amendment addresses the circuit conflict regarding whether admissions made by a defendant during a guilty plea hearing, without more, can be considered stipulations for purposes of subsection (a) of § 1B1.2 (Application Instructions).

Compare, e.g., United States

Nathan

, 188 F.3d 190, 201 (3d Cir. 1999) (statement made by defendants during the factual-basis hearing for a plea agreement do not constitute stipulations for the purpose of this enhancement; a statement is a stipulation only if it is part of a defendant's written plea agreement or if both the government and the defendant explicitly agree at a factual-basis hearing that the facts being placed on the record are stipulations that might subject the defendant to § 1B1.2(a));

United States

Saaverda

, 148 F.3d 1311 (11th Cir. 1998) (same);

United States

McCall

, 915 F.2d 811 (2d Cir. 1990) (same);

United States

Gardner

, 940 F.2d (10th Cir. 1991) (requiring a “knowing agreement by the defendant, as part of a plea bargain, that facts supporting a more serious offense occurred and could be presented to the court”), and

United States

Rutter

, 897 F.2d 1558, 1561 (10th Cir. 1990) (once the government agrees to a plea bargain without extracting an admission, facts admitted by the defendant can be considered only as relevant conduct in determining appropriate guideline range, not as stipulations under § 1B1.2(a)),

with United States

Loos

, 165 F.3d 504, 508 (7th Cir. 1998) (the objective behind § 1B1.2(a) is best answered by interpreting “stipulations” to mean any acknowledgment by the defendant that the defendant committed the acts that justify use of the more serious guideline, not in the formal agreement); and

United States

Domino

, 62 F.3d 716 (5th Cir. 1995) (same).

This amendment represents a narrow approach to the majority view that a factual statement made by the defendant during the plea colloquy must be made as part of the plea agreement in order to be considered a stipulation for purposes of § 1B1.2(a). This approach lessens the possibility that the plea agreement will be modified during the course of the plea proceeding without providing the parties, especially the defendant, with notice of the defendant's potential sentencing range.

Amendment

: The Commentary to § 2A2.2 captioned “Application Notes” is amended by striking Notes 1 through 3 and inserting the following:

“1. Definitions.—For purposes of guideline:

‘Aggravated assault’ means a felonious assault that involved (A) a dangerous weapon with intent to cause bodily injury (i.e., not merely to frighten) with that weapon; (B) serious bodily injury; or (C) an intent to commit another felony.

‘Brandished,’ ‘bodily injury,’ ‘firearm;’ ‘otherwise used,’ ‘permanent or life threatening bodily injury,’ and ‘serious bodily injury,’ have the meaning given those terms in § 1B1.1 (Application Instructions), Application Note 1.

‘Dangerous weapon’ has the meaning given that term in § 1B.1, Application Note 1, and includes any instrument that is not ordinarily used as a weapon (e.g., a car, a chair, or an ice pick) if such an instrument is involved in the offense with the intent to commit bodily injury.

Application of Subsection (b)(2).—In a case involving a dangerous weapon with intent to cause bodily injury, the court shall apply both the base offense level and subsection (b)(2).

3. More than Minimal Planning.—For purposes of subsection (b)(1), ‘more than minimal planning' means more planning than is typical for commission of the offense in a simple form. ‘More than minimal planning' also exists if significant affirmative steps were taken to conceal the offense, other than conduct to which § 3C1.1 (Obstructing or Impeding the Administration of Justice) applies. For example, waiting to commit the offense when no witnesses were present would not alone constitute more than minimal planning. By contrast, luring the victim to a specific location or wearing a ski mask to prevent identification would constitute more than minimal planning.”.

The Commentary to § 2A2.2 captioned “Background” is amended by striking the text of the background and inserting the following:

“This guideline covers felonious assaults that are more serious than minor assaults because of the presence of an aggravating factor, i.e., serious bodily injury, the involvement of a dangerous weapon with intent to cause bodily injury, or the intent to commit another felony. Such offenses occasionally may involve planning or be committed for hire. Consequently, the structure follows § 2A2.1 (Assault with Intent to Commit Murder, Attempted Murder). This guideline also covers attempted manslaughter and assault with intent to commit manslaughter. Assault with intent to commit murder is covered by § 2A2.1. Assault with intent to commit rape is covered by § 2A3.1 (Criminal Sexual Abuse; Attempt to Commit Criminal Sexual Abuse.)

An assault that involves the presence of a dangerous weapon is aggravated in form when the presence of the dangerous weapon is coupled with the intent to cause bodily injury. In such a case, the base offense level and the weapon enhancement in subsection (b)(2) take into account different aspects of the offense, even if application of the base offense level and the weapon enhancement is based on the same conduct.''.

Reason for Amendment:

This amendment responds to a circuit conflict regarding whether the four-level enhancement in subsection (b)(2)(B) of § 2A2.2 (Aggravated Assault) for use of a dangerous weapon during an aggravated assault is impermissible double counting.

Compare United States

Williams,

954 F.2d 204, 205-08 (4th circ. 1992) (applying the dangerous weapon enhancement under § 2A2.2(b)(2)(B) for defendant's use of his chair as a dangerous weapon did not constitute impermissible double counting even though that conduct increased the defendant's offense level twice: first, by triggering the application of the aggravated assault guideline, and second, as the basis for the four-level enhancement for use for a dangerous weapon),

with United States

Hudson

, 972 F.2d 504, 506-07 (2d Cir. 1992) (in a case in which the use of an automobile caused the crime to be classified as an aggravated assault, the court may not enhance the base offense level under § 2A2.2(b) for use of the same, non-inherently dangerous weapon).

This amendment addresses the circuit conflict by providing in the aggravated assault guideline that (1) Both the base offense level of level 15 and the weapon use enhancement in subsection (b)(2) shall apply to aggravated assaults that involve a dangerous weapon with intent to cause bodily harm; and (2) an instrument, such as a car or chair, that ordinarily is not used as a weapon may qualify as a dangerous weapon for purposes of the use of the aggravated assault guideline and the application of subsection (b)(2) when the defendant involves it in the offense with the intent to cause bodily harm.

Amendment:

The Commentary to § 2A3.1 captioned “Application Notes” is amended by striking Note 5 and Note 7; and by redesignating Note 6 as Note 5.

Section 2A3.2(a) is amended by striking subdivisions (1) and (2) and inserting the following:

“(1) 24, if the offense involved (A) a violation of chapter 117 of title 18, United States Code; and (B)(i) the commission of a sexual act; or (ii) sexual contact;

(2) 21, if the offense (A) involved a violation of chapter 117 of title 18, United States Code; but (B) did not involve (i) the commission of a sexual act; or (ii) sexual contact; or

(3) 18, otherwise.”.

Section 2A3.2(b) is amended by striking subdivision (4) and inserting the following:

“(4) If (A) subsection (a)(1) applies; and (B) none of subsections (b)(1) through (b)(3) applies, decrease by 6 levels.”.

The Commentary to § 2A3.2 captioned “Application Notes” is amended in Note 1 by striking “For purposes of this guideline—” and inserting the following: “Definitions.—For purposes of this guideline:”; and by inserting before “ `Victim' means” the following new paragraphs:

“ ‘Sexual act' has the meaning given that term in 18 U.S.C. 2246(2).

‘Sexual contact' has the meaning given that term in 18 U.S.C. 2246(3).”.

The Commentary to § 2A3.2 captioned “Application Notes” is amended by striking Note 2 and Note 8; by redesignating Notes 3 through 7 as Notes 2 through 6, respectively; and by inserting after Note 6, as redesignated by this amendment, the following:

“7. Upward Departure Consideration.—There may be cases in which the offense level determined under this guideline substantially understates the seriousness of the offense. In such cases, an upward departure may be warranted. For example, an upward departure may be warranted if the defendant committed the criminal sexual act in furtherance of a commercial scheme such as pandering, transporting persons for the purpose of prostitution, or the production of pornography.”.

The Commentary to § 2A3.2 captioned “Application Notes” is amended in Note 2, as redesignated by this amendment, by inserting “Custody, Care, and Supervisory Control Enhancement.—” before “Subsection”.

The Commentary to § 2A3.2 captioned “Application Notes” is amended in Note 3, as redesignated by this amendment, by inserting “Abuse of Position of Trust.—” before “If the”.

The Commentary to § 2A3.2 captioned “Application Notes” is amended in Note 4, as redesignated by this amendment, by inserting “Misrepresentation of Identity.—” before “The enhancement”.

The Commentary to § 2A3.2 captioned “Application Notes” is amended in Note 5, as redesignated by this amendment, by inserting “Use of Computer or Internet-Access Device.—” before “Subsection (b)(3) provides”.

The Commentary to § 2A3.2 captioned “Applications Notes” is amended in Note 6, as redesignated by this amendment, by inserting “Cross Reference.—” before “Subsection (c)(1)”.

The Commentary to § 2A3.3 captioned “Application Notes” is amended by striking Note 4.

Section 2A3.4(b) is amended by adding at the end the following:

“(6) If the offense involved a violation of chapter 117 of title 18, United States Code, increase by 3 levels.”.

The Commentary to § 2A3.4 captioned “Application Notes” is amended by striking Note 8.

Section 3D1.2(d) is amended in the second paragraph by inserting after “§§ 2E4.1, 2E5.1;” the following new line: “§§ 2G2.2, 2G2.4;”.

Chapter Four, Part B is amended by adding at the end the following:

“§ 4B1.5. Repeat and Dangerous Sex Offender Against Minors

(a) In any case in which the defendant's instant offense of conviction is a covered sex crime, § 4B1.1 (Career Offender) does not apply, and the defendant committed the instant offense of conviction subsequent to sustaining at least one sex offense conviction:

(1) The offense level shall be the greater of:

(A) the offense level determined under Chapters Two and Three; or

(B) the offense level from the table below decreased by the number of levels corresponding to any applicable adjustment from § 3E1.1 (Acceptance of Responsibility):

Offense statutory maximum

Offense level

(i) Life

(ii) 25 years or more

(iii) 20 years or more, but less than 25 years

(iv) 15 years or more, but less than 20 years

(v) 10 years or more, but less than 15 years

(vi) 5 years or more, but less than 10 years

(vii) More than 1 year, but less than 5 years

(2) The criminal history category shall be the greater of: (A) the criminal history category determined under Chapter Four, Part A (Criminal History); or (B) criminal history Category V.

(b) In any case in which the defendant's instant offense of conviction is a covered sex crime, neither § 4B1.1 nor subsection (a) of this guideline applies, and the defendant engaged in a patter of activity involving prohibited sexual conduct:

(1) The offense level shall be 5 plus the offense level determined under

Chapters Two and Three. However, if the resulting offense level is less than level 22, the offense level shall be level 22, decreased by the number of levels corresponding to any applicable adjustment from § 3E1.1.

(2) The criminal history category shall be the criminal history category determined under Chapter Four, Part A.

Commentary

Application Notes

1. Definitions.—For purposes of this guideline:

‘Minor’ means an individual who had not attained the age of 18 years.

‘Minor victim’ includes (A) an undercover law enforcement officer who represented to the defendant that the officer was a minor; or (B) any minor the officer represented to the defendant would be involved in the prohibited sexual conduct.

2. Covered Sex Crime as Instant Offense of Conviction.—For purposes of this guideline, the instant offense of conviction must be a covered sex crime, i.e.: (A) an offense, perpetrated against a minor, under (i) chapter 109A of title 18, United States Code; (ii) chapter 110 of such title, not including trafficking in, receipt of, or possession of, child pornography, or a recordkeeping offense; (iii) chapter 117 of such title, not including transmitting information about a minor or filing a factual statement about an alien individual; or (B) an attempt or a conspiracy to commit any offense described in subdivisions (A)(i) through (iii) of this note.

3. Application of Subsection (a).—

(A) Definitions.—For purposes of subsection (a):

(i) ‘Offense statutory maximum’ means the maximum term of imprisonment authorized for the instant offense of conviction that is a covered sex crime, including any increase in that maximum term under a sentencing enhancement provision (such as a sentencing enhancement provision contained in 18 U.S.C. 2247(a) or 2426(a)) that applies to that covered sex crime because of the defendant's prior criminal record.

(ii) ‘Sex offense conviction’ (I) means any offense described in 18 U.S.C. 2426(b)(1)(A) or (B), if the offense was perpetrated against a minor; and (II) does not include trafficking in, receipt of, or possession of, child pornography. ‘Child pornography’ has the meaning given that term in 18 U.S.C. 2256(8).

(B) Determination of Offense Statutory Maximum in the Case of Multiple Counts of Conviction.—In a case in which more than one count of the instant offense of conviction is a felony that is a covered sex crime, the court shall use the maximum authorized term of imprisonment for the count that has the greatest offense statutory maximum, for purposes of determining the offense statutory maximum under subsection (a).

4. Application of Subsection (b).—

(A) Definition.—For purposes of subsection (b), ‘prohibited sexual conduct’ (i) means any offense described in 18 U.S.C. 2426(b)(1)(A) or (B); (ii) includes the production of child pornography; (iii) includes trafficking in child pornography only if, prior to the commission of the instant offense of conviction, the defendant sustained a felony conviction for that trafficking in child pornography; and (iv) does not include receipt or possession of child pornography. ‘Child pornography’ has the meaning given that term in 18 U.S.C. 2256(8).

(B) Determination of Pattern of Activity.—

(i) In General.—For purposes of subsection (b), the defendant engaged in a pattern of activity involving prohibited sexual conduct if—

(I) on at least two separate occasions, the defendant engaged in prohibited sexual conduct with a minor; and

(II) there were at least two minor victims of the prohibited sexual conduct.

For example, the defendant engaged in a pattern of activity involving prohibited sexual conduct if there were two separate occasions of prohibited sexual conduct and each such occasion involved a different minor, or if there were two separate occasions of prohibited sexual conduct involving the same two minors.

(ii) Occasion of Prohibited Sexual Conduct.—An occasion of prohibited sexual conduct may be considered for purposes of subsection (b) without regard to whether the occasion (I) occurred during the course of the instant offense; or (II) resulted in a conviction for the conduct that occurred on that occasion.

5. Treatment and Monitoring.—

(A) Recommended Maximum Term of Supervised Release.—The statutory maximum term of supervised release is recommended for offenders sentenced under this guideline.

(B) Recommended Conditions of Probation and Supervised Release.—Treatment and monitoring are important tools for supervising offenders and should be considered as special conditions of any term of probation or supervised release that is imposed.

Background:

The guideline is intended to provide lengthy incarceration for offenders who commit sex offenses against minors and who present a continuing danger to the public. It applies to offenders whose instant offense of conviction is a sex offense committed against a minor victim. The relevant criminal provisions provide for increased statutory maximum penalties for repeat sex offenders and make those increased statutory maximum penalties available if the defendant previously was convicted of any of several federal and state sex offenses (see 18 U.S.C. 2247, 2426). In addition, section 632 of Pub. L. 102-141 and section 505 of Pub. L. 105-314 directed the Commission to ensure lengthy incarceration for offenders who engage in a pattern of activity involving the sexual abuse or exploitation of minors.''.

Section 5B1.3(d) is amended by adding at the end the following:

“(7) Sex Offenses

If the instant offense of conviction is a sex offense, as defined in § 5D1.2 (Term of Supervised Release)—a condition requiring the defendant to participate in a program approved by the United States Probation Office for the treatment and monitoring of sex offenders.”.

Section 5D1.2 is amended by adding after subsection (b) the following:

“(c) If the instant offense of conviction is a sex offense, the statutory maximum term of supervised release is recommended.”.

The Commentary to § 5D1.2 captioned “Application Notes” is amended by redesignating Notes 1 and 2 as Notes 2 and 3, respectively; by inserting before Note 2, as redesignated by this amendment, the following:

“1. Definition.—For purposes of this guideline, ‘sex offense’ means (A) an offense, perpetrated against a minor, under (i) chapter 109A of title 18, United States Code; (ii) chapter 110 of such title, not including a recordkeeping offense; or (iii) chapter 117 of such title, not including transmitting information about a minor or filing a factual statement about an alien individual; or (B) an attempt or a conspiracy to commit any offense described in subdivisions (A)(i) through (iii) of this note.”; and in Note 2, as redesignated by this amendment, by inserting “Safety Valve Cases.—” before “A defendant”; and in Note 3, as redesignated by this amendment, by inserting “Substantial Assistance Cases.—” before “Upon motion”.

Section 5D1.3(d) is amended by inserting at the end the following:

“(7) Sex Offenses

If the instant offense of conviction is a sex offense, as defined in § 5D1.2

(Term of Supervised Release)—a condition requiring the defendant to participate in a program approved by the United States Probation Office for the treatment and monitoring of sex offenders.”.

Reason for Amendment:

This is a three-part amendment promulgated primarily in response to the Protection of Children from Sexual Predators Act of 1998, Pub. L. 105-314 (the “Act”), which contains several directives to the Commission. In furtherance of the directives, the Commission initiated a comprehensive examination of the guidelines under which most sex crimes are sentenced. Amendment 592, effective November 1, 2000, addressed a number of these directives. (See USSC Guidelines Manual 2000 Supplement to Appendix C, Amendment 592.)

The first part of the amendment addresses the Act's directive to increase penalties in any case in which the defendant engaged in a pattern of activity of sexual abuse or sexual exploitation of a minor. In response to this directive, the amendment provides a new Chapter Four (Criminal History and Criminal Livelihood) guideline, § 4B1.5 (Repeat and Dangerous Sex Offender Against Minors), that focuses on repeat child sex offenders. This new guideline works in a coordinated manner with § 4B1.1 (Career Offender) and creates a tiered approach to punishing repeat child sex offenders.

The first tier, in § 4B1.5(a), aims to incapacitate repeat child sex offenders who have an instant offense of conviction of sexual abuse of a minor and a prior felony conviction for sexual abuse of a minor (but to whom § 4B1.1 does not apply). This provision subjects a defendant to the greater of the offense level determined under Chapters Two and Three or the offense level obtained from a table that, like the table in § 4B1.1, bases the applicable offense level on the statutory maximum for the offense. In addition, the defendant is subject to an enhanced criminal history category of not less than Category V, similar to § 4B1.1 (which provides for Category VI). By statute, defendants convicted of a federal sex offense are subject to twice the statutory maximum penalty for a subsequent sex offense conviction. This guideline provision effectuates the Commission's and Congress's intent to punish repeat child sex offenders severely.

The second tier, in § 4B1.5(b), provides a five-level increase in the offense level and a minimum offense level of level 22 for defendants who are not subject to either § 4B1.1 or to § 4B1.5(a) and who have engaged in a pattern of activity involving prohibited sexual conduct with minors. This part of the guideline does not rely on prior convictions to increase the penalty for those who have a pattern of activity of sexual abuse or exploitation of a minor. The pattern of activity enhancement requires that the defendant engaged in prohibited sexual conduct on at least two separate occasions and that at least two minors were victims of the sexual conduct. This provision is similar to the existing five-level pattern of activity enhancement in subsection (b)(4) of § 2G2.2 (Trafficking in Material Involving the Sexual Exploitation of a Minor; Receiving, Transporting, Shipping, or Advertising Material Involving the Sexual Exploitation of a Minor; Possessing Material Involving the Sexual Exploitation of a Minor with Intent to Traffic) and effectuates the Commission's and Congress's intent to punish severely offenders who engage in a pattern of activity involving the sexual abuse or exploitation of minors.

Conforming amendments are made to the criminal sexual abuse guidelines in Chapter Two, Part A, Subpart 3 to delete the upward departure provisions for prior sentences for similar conduct; that factor is now taken into account in the new guideline.

In addition to creating a new guideline, this part of the amendment also modifies § 5D1.2 (Term of Supervised Release) to provide that the recommended term of supervised release for a defendant convicted of a sex crime is the maximum term authorized by statute. Amendments to § § 5B1.3 (Conditions of Probation) and 5D1.3 (Conditions of Supervised Release) effectuate the Commission's intent that offenders who commit sex crimes receive appropriate treatment and monitoring.

The second part of the amendment addresses a circuit conflict regarding whether multiple counts of possession, receipt, or transportation of images containing child pornography should be grouped together pursuant to subsection (a) or (b) of § 3D1.2 (Groups of Closely Related Counts). Resolution of the conflict depends, in part, on determining who is the victim of the offense: the child depicted in the pornography images or society as a whole. Six circuits have held that the child depicted is the victim, and, therefore, that the counts are not grouped.

See United States

Norris

, 159 F.3d 926 (5th Cir. 1998);

United States

Hibbler

, 159 F.3d 233 (6th Cir. 1998);

United States

Ketcham

, 80 F.3d 789 (3d Cir. 1996);

United States

Rugh

, 968 F.2d 750 (8th Cir. 1992);

United States

Boos

, 127 F.3d 1207 (9th Cir. 1997),

cert. denied

, 522 U.S. 1066 (1998); and

United States

Tillmon

, 195 F.3d 640 (11th Cir. 1999). In contrast, one circuit has held that society as a whole is the victim of these types of offenses, and, therefore, that one count of interstate transportation of child pornography does not group with a count of interstate transportation of a minor with intent to engage in illegal sexual activity in a case in which the child portrayed in the pornography was the same child transported.

See United States

Toler

, 901 F.2d 399 (4th Cir. 1990).

In addressing the circuit conflict, the Commission adopted a position that provides for grouping of multiple counts of child pornography distribution, receipt, and possession pursuant to § 3D1.2(d). Grouping multiple counts of these offenses pursuant to § 3D1.2(d) is appropriate because these offenses typically are continuous and ongoing enterprises. This grouping provision does not require the determination of whether counts involve the same victim in order to calculate a combined adjusted offense level for multiple counts of conviction which, particularly in these kinds of cases, could be complex and time consuming. Consistent with the provisions of subsection (a)(2) of § 1B1.3 (Relevant Conduct), this approach provides that additional images of child pornography (often involved in the case, but outside of the offense of conviction) shall be considered by the court in determining the appropriate sentence for the defendant if the conduct related to those images is part of the same course of conduct or common scheme or plan.

The third part of the amendment makes several modifications to § 2A3.2 (Criminal Sexual Abuse of a Minor Under the Age of Sixteen Years (Statutory Rape) or Attempt to Commit Such Acts). The amendment responds to the directive in the Act to provide an enhancement for offenses under chapter 117 of title 18, United States Code, involving the transportation of minors for prostitution or prohibited sexual conduct. The amendment increases the offense levels in § 2A3.2 and in § 2A3.4 (Abusive Sexual Contact or Attempt to Commit Abusive Sexual Contact). The Act focuses on those individuals who travel to meet or transport minors for illegal sexual activity by providing increased statutory maximum penalties for those individuals. In response, the increase in penalties in these guidelines were geared toward those individuals. Specifically, the amendment distinguishes between chapter 117 offenses that involve the commission of a sexual act or sexual contact and those offenses (e.g., sting cases) that do not, by

providing an alternative base offense level in § 2A3.2 for chapter 117 offenses that also involve the commission of a sexual act or sexual contact that is three levels greater (i.e., level 24) than the base offense level applicable to chapter 117 offenses that do not involve a sexual act or sexual contact.

The amendment provides a three-level increase in the base offense level for offenses sentenced under § 2A3.2, such that the base offense level (1) for statutory rape unaccompanied by aggravating conduct is increased from level 15 to level 18; (2) for a chapter 117 offense (unaccompanied by a sexual act or sexual contact) is increased from level 18 to level 21; and (3) for a chapter 117 offense (accompanied by a sexual act or sexual contact) results in a base offense level of level 24. The amendment reflects the seriousness accorded criminal sexual abuse offenses by Congress, which provided for statutory maximum penalties of 15 years' imprisonment (or 30 years' imprisonment with a prior conviction for a sex crime). A defendant who transmits child pornography to a minor as a means of enticing the minor to engage in illegal sexual activity will receive a sentence increase when that defendant subsequently travels across state lines to engage in illegal sexual activity with that minor. Therefore, this increase also maintains the proportionality between §§ 2A3.2 and 2G2.2.

The third part of the amendment also makes conforming changes to § 2A3.2 to ensure that some chapter 117 offenses that do not include aggravating conduct receive the offense level applicable to statutory rape in its basic form. Technical changes made by the amendment (such as the addition of headings and the reordering of applications notes) are not intended to have substantive effect.

Amendment:

Section 2A6.2(a) is amended by striking “14” and inserting “18”.

Section 2A6.2(c) is amended by striking subdivision (1) and inserting the following:

“(1) If the offense involved the commission of another criminal offense, apply the offense guideline from Chapter Two, Part A (Offenses Against the Person) most applicable to that other criminal offense, if the resulting offense level is greater than that determined above.”.

The Commentary to § 2A6.2 captioned “Application Notes” is amended in Note 1 by striking the 1-em dash and inserting a colon; and by striking the last paragraph and inserting the following:

“ ‘Stalking means (A) traveling with the intent to kill, injure, harass, or intimidate another person and, in the course of, or as a result of, such travel, placing the person in reasonable fear of death or serious bodily injury to that person or an immediate family member of that person; or (B) using the mail or any facility of interstate or foreign commerce to engage in a course of conduct that places that person in reasonable fear of the death of, or serious bodily injury to, that person or an immediate family member of that person. See 18 U.S.C. § 2261A. ‘Immediate family member’ (A) has the meaning given that term in 18 U.S.C. § 115(c)(2); and (B) includes a spouse or intimate partner. ‘Course of conduct’ and ‘spouse or intimate partner’ have the meaning given those terms in 18 U.S.C. § 2266(2) and (7), respectively.”.

The Commentary to § 1B1.5 captioned “Application Notes” is amended in Note 3 by inserting after the first sentence the following:

“Consistent with the provisions of § 1B1.3 (Relevant Conduct), such other offense includes conduct that may be a state or local offense and conduct that occurred under circumstances that would constitute a federal offense had the conduct taken place within the territorial or maritime jurisdiction of the United States.”.

Reason for Amendment:

This amendment addresses section 1107 of the Victims of Trafficking and Violence Protection Act of 2000, Pub. L. 106-386 (the “Act”). That section amends 18 U.S.C. 2261, 2261A, and 2262 to broaden the reach of those statutes to include international travel to stalk, commit domestic violence, or violate a protective order. Section 2261A also is amended to broaden the category of persons protected by this statute to include intimate partners of the person stalked. The Act also creates a new offense at section 2261A(2) that prohibits the use of the mail or any facility of interstate or foreign commerce to commit a stalking offense. Several technical changes were also made to these statutes.

The Act includes a directive to the Commission to amend the federal sentencing guidelines to reflect the changes made to 18 U.S.C. 2261, with specific consideration to be given to the following factors: (1) whether the guidelines relating to stalking offenses should be modified in light of the amendment made by this subsection; and (2) whether any changes the Commission may make to the guidelines pursuant to clause (1) should also be made with respect to offenses under chapter 110A of title 18, United States Code (staling and domestic violence offenses).

For several reasons, the amendment refers the new stalking by mail offense, like other stalking offenses, to § 2A6.2 (Stalking or Domestic Violence). First, the statutory penalties for stalking by mail are the same as the statutory penalties for other stalking offenses. Second, although there was some consideration to refer this new offense to § 2A6.1 (Threatening or Harassing Communications), stalking by mail offenses differ significantly from threatening communications in that the former require the defendant's intent to kill, or injure a person, or place a person in reasonable fear of death or serious bodily injury. Third, referencing stalking by mail offenses to § 2A6.1 could result in these offenses receiving higher penalties than other stalking offenses. For example, a defendant who writes a threatening letter, violates a protective order, and engages in some conduct evidencing an intent to carry out such threat, would receive an offense level of level 20 under § 2A6.1. A defendant who engages in stalking by mail, violates a protective order, and actually commits bodily injury on the person who is the subject of the protection order would have received, prior to this amendment, an offense level of level 18 under § 2A6.2. This amendment reflects the policy judgment that the second defendant should receive punishment equal to, or perhaps greater than, that received by the first defendant. Accordingly, because of concern for proportionality in sentencing stalking and domestic violence offenses relative to other crimes, such as threatening or harassing communications, this amendment increases the base offense level in § 2A6.2 from level 14 to level 18. Setting the base offense level at level 18 for stalking and domestic violence crimes ensures that these offenses are sentenced at or above the offense levels for offenses involving threatening and harassing communications.

The amendment also conforms the definition of “stalking” in Application Note 1 of § 2A6.2 to the statutory changes made by the Act. Additionally, the amendment modifies the language of subsection (c) in § 2A6.2 to clarify application of the cross reference. This change is consistent with the amendment to Application Note 3 of § 1B1.5 (Interpretation of References to Other Offense Guidelines), which also clarifies the operation of cross references generally.

These revisions are designed to clarify that, unless otherwise specified, cross references in Chapter Two (Offense

Conduct) are to be determined consistently with the provisions of § 1B1.3 (Relevant Conduct). Therefore, in a case in which the guideline includes a reference to use another guideline if the conduct involved another offense, the other offense includes conduct that may be a state or local offense and conduct that occurred under circumstances that would constitute a federal offense had the conduct taken place within the territorial or maritime jurisdiction of the United States.

Amendment:

Chapter Two is amended by striking the heading to Part B, the heading to Subpart 1 of Part B, and the Introductory Commentary to such subpart and inserting the following:

“PART B—BASIC ECONOMIC OFFENSES

1. Theft, Embezzlement, Receipt of Stolen Property, Property Destruction, and Offenses Involving Fraud or Deceit

Introductory Commentary

These sections address basic forms of property offenses: theft, embezzlement, fraud, forgery, counterfeiting (other than offenses involving altered or counterfeit bearer obligations of the United States), insider trading, transactions in stolen goods, and simple property damage or destruction. (Arson is dealt with separately in Chapter Two, Part K (Offenses Involving Public Safety)). These guidelines apply to offenses prosecuted under a wide variety of federal statutes, as well as offenses that arise under the Assimilative Crimes Act.”.

Chapter Two, Part B is amended by striking § 2B1.1, and its accompanying commentary, and inserting the following:

“§ 2B1.1. Larceny, Embezzlement, and Other Forms of Theft; Offenses Involving Stolen Property; Property Damage or Destruction; Fraud and Deceit; Forgery; Offenses Involving Altered or Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States

(a) Base Offense Level: 6

(b) Specific Offense Characteristics

(1) If the loss exceeded $5,000, increase the offense level as follows:

Loss (apply the greatest)

Increase in level

(A) $5,000 or less

no increase

(B) More than $5,000

add 2

add 4

(D) More than $30,000

add 6

(E) More than $70,000

add 8

(F) More than $120,000

add 10

(G) More than $200,000

add 12

(H) More than $400,000

add 14

(I) More than $1,000,000

add 16

(J) More than $2,500,000

add 18

(K) More than $7,000,000

add 20

(L) More than $20,000,000

add 22

(M) More than $50,000,000

add 24

(N) More than $100,000,000

add 26.

(2) (Apply the greater) If the offense—

(A) (i) involved more than 10, but less than 50, victims; or (ii) was committed through mass-marketing, increase by 2 levels; or

(B) involved 50 or more victims, increase by 4 levels.

(3) If the offense involved a theft from the person of another, increase by 2 levels.

(4) If the offense involved receiving stolen property, and the defendant was a person in the business of receiving and selling stolen property, increase by 2 levels.

(5) If the offense involved misappropriation of a trade secret and the defendant knew or intended that the offense would benefit a foreign government, foreign instrumentality, or foreign agent, increase by 2 levels.

(6) If the offense involved theft of, damage to, or destruction of, property from a national cemetery, increase by 2 levels.

(7) If the offense involved (A) a misrepresentation that the defendant was acting on behalf of a charitable, educational, religious, or political organization, or a government agency; (B) a misrepresentation or other fraudulent action during the course of a bankruptcy proceeding; (C) a violation of any prior, specific judicial or administrative order, injunction, decree, or process not addressed elsewhere in the guidelines; or (D) a misrepresentation to a consumer in connection with obtaining, providing, or furnishing financial assistance for an institution of higher education, increase by 2 levels. If the resulting offense level is less than level 10, increase to level 10.

(8) If (A) the defendant relocated, or participated in relocating, a fraudulent scheme to another jurisdiction to evade law enforcement or regulatory officials; (B) a substantial part of a fraudulent scheme was committed from outside the United States; or (C) the offense otherwise involved sophisticated means, increase by 2 levels. If the resulting offense level is less than level 12, increase to level 12.

(9) If the offense involved (A) the possession or use of any device-making equipment; (B) the production or trafficking of any unauthorized access device or counterfeit access device; or (C)(i) the unauthorized transfer or use of any means of identification unlawfully to produce or obtain any other means of identification; or (ii) the possession of 5 or more means of identification that unlawfully were produced from, or obtained by the use of, another means of identification, increase by 2 levels. If the resulting offense level is less than level 12, increase to level 12.

(10) If the offense involved an organized scheme to steal vehicles or vehicle parts, and the offense level is less than level 14, increase to level 14.

(11) If the offense involved (A) the conscious or reckless risk of death or serious bodily injury; or (B) possession of a dangerous weapon (including a firearm) in connection with the offense, increase by 2 levels. If the resulting offense level is less than level 14, increase to level 14.

(12) (Apply the greater) If—

(A) the defendant derived more than $1,000,000 in gross receipts from one or more financial institutions as a result of the offense, increase by 2 levels; or

(B) the offense substantially jeopardized the safety and soundness of a financial institution, increase by 4 levels.

If the resulting offense level determined under subdivision (A) or (B) is less than level 24, increase to level 24.

(1) If (A) a firearm, destructive device, explosive material, or controlled substance was taken, or the taking of any such item was an object of the offense; or (B) the stolen property received, transported, transferred, transmitted, or possessed was a firearm, destructive device, explosive material, or controlled substance, apply § 2D1.1 (Unlawful Manufacturing, Importing, Exporting, or Trafficking (Including Possession with Intent to Commit These Offenses); Attempt or Conspiracy), § 2D2.1 (Unlawful Possession; Attempt or Conspiracy), § 2K1.3 (Unlawful Receipt, Possession, or Transportation of Explosive Materials; Prohibited Transactions Involving Explosive Materials), or § 2K2.1 (Unlawful Receipt, Possession, or Transportation of Firearms or Ammunition; Prohibited Transactions Involving Firearms or Ammunition), as appropriate.

(2) If the offense involved arson, or property damage by use of explosives, apply § 2K1.4 (Arson; Property Damage by Use of Explosives), if the resulting offense level is greater than that determined above.

(3) If (A) neither subdivision (1) nor (2) of this subsection applies; (B) the defendant was convicted under a statute proscribing false, fictitious, or

fraudulent statements or representations generally (e.g., 18 U.S.C. 1001, 1341, 1342, or 1343); and (C) the conduct set forth in the count of conviction establishes an offense specifically covered by another guideline in Chapter Two (Offense Conduct), apply that other guideline.

(d) Special Instruction

(1) If the defendant is convicted under 18 U.S.C. 1030(a)(4) or (5), the minimum guideline sentence, notwithstanding any other adjustment, shall be six months' imprisonment.

Commentary

Statutory Provisions:

7 U.S.C. 6, 6b, 6c, 6h, 6o, 13, 23; 15 U.S.C. 50, 77e, 77q, 77x, 78j, 78ff, 80b-6, 1644, 6821; 18 U.S.C. 38, 225, 285-289, 471-473, 500, 510, 553(a)(1), 641, 656, 657, 659, 662, 1001-1008, 1010-1014, 1016-1022, 1025, 1026, 1028, 1029, 1030(a)(4)-(5), 1031, 1341-1344, 1361, 1363, 1702, 1703 (if vandalism or malicious mischief, including destruction of mail, is involved), 1708, 1831, 1832, 2113(b), 2312-2317; 29 U.S.C. 501(c); 42 U.S.C. 1011; 49 U.S.C. 30170, 46317(a). For additional statutory provision(s)

see

Appendix A (Statutory Index).

Application Notes

1. Definitions.—For purposes of this guideline:

“Financial institution” includes any institution described in 18 U.S.C. 20, 656, 657, 1005, 1006, 1007, or 1014; any state or foreign bank, trust company, credit union, insurance company, investment company, mutual fund, savings (building and loan) association, union or employee pension fund; any health, medical, or hospital insurance association; brokers and dealers registered, or required to be registered, with the Securities and Exchange Commission; futures commodity merchants and commodity pool operators registered, or required to be registered, with the Commodity Futures Trading Commission; and any similar entity, whether or not insured by the federal government. “Union or employee pension fund” and “any health, medical, or hospital insurance association,” primarily include large pension funds that serve many persons (e.g., pension funds or large national and international organizations, unions, and corporations doing substantial interstate business), and associations that undertake to provide pension, disability, or other benefits (e.g., medical or hospitalization insurance) to large numbers of persons.

“Firearm” and “destructive device” have the meaning given those terms in the Commentary to § 1B1.1 (Application Instructions).

“Foreign instrumentality” and “foreign agent” have the meaning given those terms in 18 U.S.C. 1839(1) and (2), respectively.

“National cemetery” means a cemetery (A) established under section 2400 of title 38, United States Code; or (B) under the jurisdiction of the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force, or the Secretary of the Interior.

“Theft from the person of another” means theft, without the use of force, of property that was being held by another person or was within arms' reach. Examples include pick-pocketing and non-forcible purse-snatching, such as the theft of a purse from a shopping cart.

“Trade secret” has the meaning given that term in 18 U.S.C. 1839(3).

2. Loss Under Subsection (b)(1).—This application note applies to the determination of loss under subsection (b)(1).

(A) General Rule.—Subject to the exclusions in subdivision (D), loss is the greater of actual loss or intended loss.

(i) Actual Loss.—“Actual loss” means the reasonably foreseeable pecuniary harm that resulted from the offense.

(ii) Intended Loss.—“Intended loss” (I) means the pecuniary harm that was intended to result from the offense; and (II) includes intended pecuniary harm that would have been impossible or unlikely to occur (e.g., as in a government sting operation, or an insurance fraud in which the claim exceeded the insured value).

(iii) Pecuniary Harm.—“Pecuniary harm” means harm that is monetary or that otherwise is readily measurable in money. Accordingly, pecuniary harm does not include emotional distress, harm to reputation, or other non-economic harm.

(iv) Reasonably Foreseeable Pecuniary Harm.—For purposes of this guideline, “reasonably foreseeable pecuniary harm” means pecuniary harm that the defendant knew or, under the circumstances, reasonably should have known, was a potential result of the offense.

(v) Rules of Construction in Certain Cases.—In the cases described in subdivisions (I) through (III), reasonably foreseeable pecuniary harm shall be considered to include the pecuniary harm specified for those cases as follows:

(I) Product Substitution Cases.—In the case of a product substitution offense, the reasonably foreseeable pecuniary harm includes the reasonably foreseeable costs of making substitute transactions and handling or disposing of the product delivered, or of retrofitting the product so that it can be used for its intended purpose, and the reasonably foreseeable costs of rectifying the actual or potential disruption to the victim's business operations caused by the product substitution.

(II) Procurement Fraud Cases.—In the case of a procurement fraud, such as a fraud affecting a defense contract award, reasonably foreseeable pecuniary harm includes the reasonably foreseeable administrative costs to the government and other participants of repeating or correct the procurement action affected, plus any increased costs to procure the product or service involved that was reasonably foreseeable.

(III) Protected Computer Cases.—In the case of an offense involving unlawfully accessing, or exceeding authorized access to, a “protected computer” as defined in 18 U.S.C. 1030(e)(2), actual loss includes the following pecuniary harm, regardless of whether such pecuniary harm was reasonably foreseeable: reasonable costs to the victim of conducting a damage assessment, and restoring the system and data to their condition prior to the offense, and any lost revenue due to interruption of service.

(B) Gain.—The court shall use the gain that resulted from the offense as an alternative measure of loss only if there is a loss but it reasonably cannot be determined.

(C) Estimation of Loss.—The court need only make a reasonable estimate of the loss. The sentencing judge is in a unique position to assess the evidence and estimate the loss based upon that evidence. For this reason, the court's loss determination is entitled to appropriate deference. See 18 U.S.C. 3742(e) and (f).

The estimate of the loss shall be based on available information, taking into account, as appropriate and practicable under the circumstances, factors such as the following:

(i) The fair market value of the property unlawfully taken or destroyed; or, if the fair market value is impracticable to determine or inadequately measures the harm, the cost to the victim of replacing that property.

(ii) The cost of repairs to damaged property.

(iii) The approximate number of victims multiplied by the average loss to each victim.

(iv) More general factors, such as the scope and duration of the offense and revenues generated by similar operations.

(D) Exclusions from Loss.—Loss shall not include the following:

(i) Interest of any kind, finance charges, late fees, penalties, amounts based on an agreed-upon return or rate of return, or other similar costs.

(ii) Costs to the government of, and costs incurred by victims primarily to aid the government in, the prosecution and criminal investigation of an offense.

(E) Credits Against Loss.—Loss shall be reduced by the following:

(i) The money returned, and the fair market value of the property returned and the services rendered, by the defendant or other persons acting jointly with the defendant, to the victim before the offense was detected. The time of detection of the offense is the earlier of (I) the time the offense was discovered by a victim or government agency; or (II) the time the defendant knew or reasonably should have known that the offense was detected or about to be detected by a victim or government agency.

(ii) In a case involving collateral pledged or otherwise provided by the defendant, the amount the victim has recovered at the time of sentencing from disposition of the collateral, or if the collateral has not been disposed of by that time, the fair market value of the collateral at the time of sentencing.

(F) Special Rules.—Notwithstanding subdivision (A), the following special rules shall be used to assist in determining loss in the cases indicated:

(i) Stolen or Counterfeit Credit Cards and Access Devices; Purloined Numbers and Codes.—In a case involving any counterfeit access device or unauthorized access device, loss includes any unauthorized charges made with the counterfeit access device or unauthorized access device and shall be not less than $500 per access device. However, if the unauthorized access device is a means of telecommunications access that identifies a specific telecommunications instrument or telecommunications account (including an electronic serial number/mobile identification number (ESN/MIN) pair), and that means was only possessed, and not used, during the commission of the offense, loss shall be not less than $100 per unused means. For purposes of this subdivision, ‘counterfeit access device’ and ‘unauthorized access device’ have the meaning given those terms in Application Note 7(A).

(ii) Government Benefits.—In a case involving government benefits (e.g., grants, loans, entitlement program payments), loss shall be considered to be not less than the value of the benefits obtained by unintended recipients or diverted to unintended uses, as the case may be. For example, if the defendant was the intended recipient of food stamps having a value of $100 but fraudulently received food stamps having a value of $150, loss is $50.

(iii) Davis-Bacon Act Violations.—In a case involving a Davis-Bacon Act violation (i.e., a violation of 40 U.S.C. 276a, criminally prosecuted under 18 U.S.C. 1001), the value of benefits shall be considered to be not less than the difference between the legally required wages and actual wages paid.

(iv) Ponzi and Other Fraudulent Investment Schemes.—In a case involving a fraudulent investment scheme, such as a Ponzi scheme, loss shall not be reduced by the money or the value of the property transferred to any individual investor in the scheme in access of that investor's principal investment (i.e., the gain to an individual investor in the scheme shall not be used to offset the loss to another individual investor in the scheme).

(v) Certain Other Unlawful Misrepresentation Schemes.—In a case involving a scheme in which (I) services were fraudulently rendered to the victim by persons falsely posing as licensed professionals; (II) goods were falsely represented as approved by a governmental regulatory agency; or (III) goods for which regulatory approval by a government agency was required but not obtained, or was obtained by fraud, loss shall include the amount paid for the property, services or goods transferred, rendered, or misrepresented, with no credit provided for the value of those items or services.

(vi) Value of Controlled Substances.—In a case involving controlled substances, loss is the estimated street value of the controlled substances.

(3) Victim and Mass-Marketing Enhancement under Subsection (b)(2).—

(A) Definitions.—For purposes of subsection (b)(2):

(i) “Mass-marketing” means a plan, program, promotion, or campaign that is conducted through solicitation by telephone, mail, the Internet, or other means to induce a large number of persons to (I) purchase goods or services; (II) participate in a contest or sweepstakes; or (III) invest for financial profit. “Mass-marketing” includes, for example, a telemarketing campaign that solicits a large number of individuals to purchase fraudulent life insurance policies.

(ii) “Victim” means (I) any person who sustained any part of the actual loss determined under subsection (b)(1); or (II) any individual who sustained bodily injury as a result of the offense. “Person” includes individuals, corporations, companies, associations, firms, partnerships, societies, and joint stock companies.

(B) Undelivered United States Mail.—

(i) In General.—In a case in which undelivered United States mail was taken, or the taking of such item was an object of the offense, or in a case in which the stolen property received, transported, transferred, transmitted, or possessed was undelivered United States mail, “victim” means any person (I) described in subdivision (A)(ii) of this note; or (II) who was the intended recipient, or addressee, of the undelivered United States mail.

(ii) Special Rule.—A case described in subdivision (B)(i) of this note that involved a Postal Service (I) relay box; (II) collection box; (III) delivery vehicle; or (IV) satchel or cart, shall be considered to have involved 50 or more victims.

(iii) Definition.—“Undelivered United States mail” means mail that has not actually been received by the addressee or his agent (e.g., mail taken from the addressee's mail box).

4. Enhancement for Business of Receiving and Selling Stolen Property under Subsection (b)(4).—For purposes of subsection (b)(4), the court shall consider the following non-exhaustive list of factors in determining whether the defendant was in the business of receiving and selling stolen property:

(A) The regularity and sophistication of the defendant's activities.

(B) The value and size of the inventory of stolen property maintained by the defendant.

(D) The defendant's past activities involving stolen property.

5. Application of Subsection (b)(7).—

(A) In General.—The adjustments in subsection (b)(7) are alternative rather than cumulative. If, in a particular case, however, more than one of the enumerated factors applied, an upward departure may be warranted.

(B) Misrepresentations Regarding Charitable and Other Institutions.— Subsection (b)(7)(A) applies in any case in which the defendant represented that the defendant was acting to obtain a benefit on behalf of a charitable educational, religious, or political organization, or a government agency (regardless of whether the defendant actually was associated with the organization or government agency) when, in fact, the defendant intended to divert all or part of that benefit (e.g., for the defendant's personal gain).

Subsection (b)(7)(A) applies, for example, to the following:

(i) A defendant who solicited contributions for a non-existent famine relief organization.

(ii) A defendant who solicited donations from church members by falsely claiming to be a fundraiser for a religiously affiliated school.

(iii) A defendant, chief of a local fire department, who conducted a public fundraiser representing that the purpose of the fundraiser was to procure sufficient funds for a new fire engine when, in fact, the defendant intended to divert some of the funds for the defendant's personal benefit.

(C) Fraud in Contravention of Prior Judicial Order.—Subsection (b)(7)(C) provides an enhancement if the defendant commits a fraud in contravention of a prior, official judicial or administrative warning, in the form of an order, injunction, decree, or process, to take or not to take a specified action. A defendant who does not comply with such a prior, official judicial or administrative warning demonstrates aggravated criminal intent and deserves additional punishment. If it is established that an entity the defendant controlled was a party to the prior proceeding that resulted in the official judicial or administrative action, and the defendant had knowledge of that prior decree or order, this enhancement applies even if the defendant was not a specifically named party in that prior case. For example, a defendant whose business previously was enjoined from selling a dangerous product, but who nonetheless engaged in fraudulent conduct to sell the product, is subject to this enhancement. This enhancement does not apply if the same conduct resulted in an enhancement pursuant to a provision found elsewhere in the guidelines (e.g., a violation of a condition of release addressed in § 2J1.7 (Commission of Offense While on Release) or a violation of probation addressed in § 4A1.1 (Criminal History Category)).

(D) College Scholarship Fraud.—For purposes of subsection (b)(7)(D):

‘Financial assistance’ means any scholarship, grant, loan, tuition, discount, award, or other financial assistance for the purpose of financing an education.

‘Institution of higher education’ has the meaning given that term in section 101 of the Higher Education Act of 1954 (20 U.S.C. 1001).

(E) Non-Applicability of Enhancements.—

(i) Subsection (b)(7)(A).—If the conduct that forms the basis for an enhancement under subsection (b)(7)(A) is the only conduct that forms the basis for an adjustment under § 3B1.3 (Abuse of Position of Trust or Use of Special Skill), do not apply that adjustment under § 3B1.3.

(ii) Subsection (b)(7)(B) and (C).—If the conduct that forms the basis for an enhancement under subsection (b)(7)(B) or (C) is the only conduct that forms the basis for an adjustment under § 3C1.1 (Obstructing or Impeding the Administration of Justice), do not apply that adjustment under § 3C1.1.

6. Sophisticated Means Enhancement under Subsection (b)(8).—

(A) Definition of United States.—For purposes of subsection (b)(8)(B), ‘United States’ means each of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa.

(B) Sophisticated Means Enhancement.—For purposes of subsection (b)(8)(C), ‘sophisticated means’ means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. For example, in a telemarketing scheme, locating the main office of the scheme in one jurisdiction but locating soliciting operations in another jurisdiction ordinarily indicates sophisticated means. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts also ordinarily indicates sophisticated means.

(C) Non-Applicability of Enhancement.—If the conduct that forms the basis for an enhancement under subsection (b)(8) is the only conduct that forms the basis for an adjustment under § 3C1.1, do not apply that adjustment under § 3C1.1.

7. Application of Subsection (b)(9).—

(A) Definitions.—For purposes of subsection (b)(9):

‘Counterfeit access device’ (i) has the meaning given that term in 18 U.S.C. 1029(e)(2); and (ii) includes a telecommunications instrument that has been modified or altered to obtain unauthorized use of telecommunications service. ‘Telecommunications service’ has the meaning given that term in 19 U.S.C. 1029(e)(9).

‘Device-making equipment’

has the meaning given that term in 18 U.S.C. 1029(e)(6); and (ii) includes (I) any hardware or software that has been configured as described in 18 U.S.C. 1029(a)(9); and (II) a scanning receiver referred to in 18 U.S.C. 1029(a)(8). ‘Scanning receiver’ has the meaning given that term in 18 U.S.C. 1029(e)(8).

“Means of identification” has the meaning given that term in 18 U.S.C. 1028(d)(3), except that such means of identification shall be of an actual (i.e., not fictitious) individual, other than the defendant or a person for whose conduct the defendant is accountable under § 1B1.3 (Relevant Conduct).

“Produce” includes manufacture, design, alter, authenticate, duplicate, or assemble. “Production” includes manufacture, design, alteration, authentication, duplication, or assembly.

“Unauthorized access device” has the meaning given that term in 18 U.S.C. 1029(e)(3).

Identification Documents.—Offenses involving identification documents, false identification documents, and means of identification, in violation of 18 U.S.C. 1028, also are covered by this guideline. If the primary purpose of the offense, under 18 U.S.C. 1028, was to violate, or assist another to violate, the law pertaining to naturalization, citizenship, or legal resident status, apply § 2L2.1 (Trafficking in a Document Relating to Naturalization) or § 2L2.2 (Fraudulently Acquiring Documents Relating to Naturalization), as appropriate, rather than this guideline.

(i) In General.—Subsection (b)(9)(C)(i) applies in a case in which a means of identification of an individual other than the defendant (or a person for whose conduct the defendant is accountable under § 1B1.3 (Relevant Conduct)) is used without that individual's authorization unlawfully to produce or obtain another means of identification.

(ii) Examples.—Examples of conduct to which subsection (b)(9)(C)(i) applies are as follows:

(I) A defendant obtains an individual's name and social security number from a source (e.g., from a piece of mail taken from the individual's mailbox) and obtains a bank loan in that individual's name. In this example, the account number of the bank loan is the other means of identification that has been obtained unlawfully.

(II) A defendant obtains an individual's name and address from a source (e.g., from a diver's license in a stolen wallet) and applies for, obtains, and subsequently uses a credit card in that individual's name. In this example, the credit card is the other means of identification that has been obtained unlawfully.

(iii) Nonapplicability of Subsection (b)(9)(C)(i).—Examples of conduct to which subsection (b)(9)(C)(i) does not apply are as follows:

(I) A defendant uses a credit card from a stolen wallet only to make a purchase. In such a case, the defendant has not used the stolen credit card to obtain another means of identification.

(II) A defendant forges another individual's signature to cash a stolen check. Forging another individual's signature is not producing another means of identification.

(D) Application of Subsection (b)(9)(C)(ii).—Subsection (b)(9)(C)(ii) applies in any case in which the offense involved the possession of 5 or more means of identification that unlawfully were produced or obtained, regardless of the number of individuals in whose name (or other identifying information) the means of identification were so produced or so obtained.

8. Chop Shop Enhancement under Subsection (b)(10).—Subsection (b)(10) provides a minimum offense level in the case of an ongoing, sophisticated operation (such as an auto theft ring or ‘chop shop’) to steal vehicles or vehicle parts, or to receive stolen vehicles or vehicle parts. ‘Vehicles’ refers to all forms of vehicles, including aircraft and watercraft.

9. Gross Receipts Enhancement under Subsection (b)(12)(A).—

(A) In General.—For purposes of subsection (b)(12)(A), the defendant shall be considered to have derived more than $1,000,000 in gross receipts if the gross receipts to the defendant individually, rather than to all participants, exceeded $1,000,000.

(B) Definition.—‘Gross receipts from the offense’ includes all property, real or personal, tangible or intangible, which is obtained directly or indirectly as a result of such offense. See 18 U.S.C. 982(a)(4).

10. Enhancement for Substantially Jeopardizing the Safety and Soundness of a Financial Institution under Subsection (b)(12)(B).—For purposes of subsection (b)(12)(B), an offense shall be considered to have substantially jeopardized the safety and soundness of a financial institution if, as a consequence of the offense, the institution (A) became insolvent; (B) substantially reduced benefits to pensioners or insureds; (C) was unable on demand to refund fully any deposit, payment, or investment; (D) was so depleted of its assets as to be forced to merge without another institution in order to continue active operations; or (E) was placed in substantial jeopardy of any of subdivisions (A) through (D) of this note.

11. Cross Reference in Subsection (c)(3).—Subsection (c)(3) provides a cross reference to another guideline in Chapter Two (Offense Conduct) in cases in which the defendant is convicted of a general fraud statute, and the count of conviction establishes an offense more aptly covered by another guideline. Sometimes, offenses involving fraudulent statements are prosecuted under 18 U.S.C. 1001, or similarly general statute, although the offense is also covered by a more specific statute. Examples include false entries regarding currency transactions, for which § 2S1.3 (Structuring Transactions to Evade Reporting Requirements) likely would be more apt, and false statements to a customs officer, for which § 2T3.1 (Evading Import Duties or Restrictions (Smuggling); Receiving or Trafficking in Smuggled Property) likely would be more apt. In certain other cases, the mail or wire fraud statutes, or other relatively broad statutes, are used primarily as jurisdictional bases for the prosecution of other offenses.

12. Continuing Financial Crimes Enterprise.—If the defendant is convicted under 18 U.S.C. 225 (relating to a continuing financial crimes enterprise), the offense level is that applicable to the underlying series of offenses comprising the ‘continuing financial crimes enterprise’.

13. Partially Completed Offenses.—In the case of a partially completed offense (e.g., an offense involving a completed theft or fraud that is part of a larger, attempted theft or fraud), the offense level is to be determined in accordance with the provisions of § 2X1.1 (Attempt, Solicitation, or Conspiracy) whether the conviction is for the substantive offense, the inchoate offense (attempt, solicitation, or conspiracy), or both. See Application Note 4 of the Commentary to § 2X1.1.

14. Multiple Count Indictments.—Some fraudulent schemes may result in multiple-count indictments, depending on the technical elements of the offense. The cumulative loss produced by a common scheme or course of conduct should be used in determining the offense level, regardless of the number of counts of conviction. See Chapter Three, Part D (Multiple Counts).

15. Departure Considerations.—

(A) Upward Departure Considerations.—There may be cases in which the offense level determined under this guideline substantially understates the seriousness of the offense. In such cases, an upward departure may be warranted. The following is a non-exhaustive list of factors that the court may consider in determining whether an upward departure is warranted:

(i) A primary objective of the offense was an aggravating, non-monetary objective. For example, a primary objective of the offense was to inflict emotional harm.

(ii) The offense caused or risked substantial non-monetary harm. For example, the offense caused physical harm, psychological harm, or severe emotional trauma, or resulted in a substantial invasion of a privacy interest (through, for example, the theft of personal information such as medical, educational, or financial records).

(iii) The offense involved a substantial amount of interest of any kind, finance charges, late fees, penalties, amounts based on an agreed-upon return or rate of return, or other similar costs, not included in the determination of loss for purposes of subsection (b)(1).

(iv) The offense created a risk of substantial loss beyond the loss determined for purposes of subsection (b)(1).

(v) The offense endangered the solvency or financial security of one or more victims.

(vi) In a case involving stolen information from a ‘protected computer’, as defined in 18 U.S.C. 1030(e)(2), the defendant sought the stolen information to further a broader criminal purpose.

(vii) In a case involving access devices or unlawfully produced or unlawfully obtained means of identification:

(I) The offense caused substantial harm to the victim's reputation or credit record, or the victim suffered a substantial inconvenience related to repairing the victim's reputation or a damaged credit record.

(II) An individual whose means of identification the defendant used to obtain unlawful means of identification is erroneously arrested or denied a job because an arrest record has been made in that individual's name.

(III) The defendant produced or obtained numerous means of identification with respect to one individual and essentially assumed that individual's identity.

(B) Downward Departure Consideration.—There may be cases in which the offense level determined under this guideline substantially overstates the seriousness of the offense. In such cases, a downward departure may be warranted.

Background:

This guideline covers offenses involving theft, stolen property, property damage or destruction, fraud, forgery, and counterfeiting (other than offenses involving altered or counterfeit bearer obligations of the United Sates).

It also covers offenses involving altering or removing motor vehicle identification numbers, trafficking in automobiles or automobile parts with altered or obliterated identification numbers, odometer laws and regulations, obstructing correspondence, the falsification of documents or records relating to a benefit plan covered by the Employment Retirement Income Security Act, and the failure to maintain, or falsification of, documents required by the Labor Management Reporting and Disclosure Act.

Because federal fraud statutes often are broadly written, a single pattern of offense conduct usually can be prosecuted under several code sections, as a result of which the offense of conviction may be somewhat arbitrary. Furthermore, most fraud statutes cover a broad range of conduct with extreme variation in severity. The specific offense characteristics and cross references contained in this guideline are designed with these considerations in mind.

The Commission has determined that, ordinarily, the sentences of defendants convicted of federal offenses should reflect the nature and magnitude of the loss caused or intended by their crimes. Accordingly, along with other relevant factors under the guidelines, loss serves as a measure of the seriousness of the offense and the defendant's relative culpability and is a principal factor in determining the offense level under this guideline.

Theft from the person of another, such as pickpocketing or non-forcible purse-snatching, receives an enhanced sentence because of the increase risk of physical injury. This guideline does not include an enhancement for thefts from the person by means of force or fear; such crimes are robberies and are covered under § 2B3.1 (Robbery).

A minimum offense level of level 14 is provided for offenses involving an organized scheme to steal vehicles or vehicle parts. Typically, the scope of such activity is substantial, but the value of the property may be particularly difficult to ascertain in individual cases because the stolen property is rapidly resold or otherwise disposed of in the course of the offense. Therefore, the specific offense characteristic of ‘organized scheme’ is used as an alternative to ‘loss’ in setting a minimum offense level.

Use of false pretenses involving charitable causes and government agencies enhances the sentences of defendants who take advantage of victims’ trust in government or law enforcement agencies or the generosity and charitable motives of victims. Taking advantage of a victim's self-interest does not mitigate the seriousness of fraudulent conduct; rather, defendants who exploit victims' charitable impulses or trust in government create particular social harm. In a similar vein, a defendant who has been subject to civil or administrative proceedings for the same or similar fraudulent conduct demonstrates aggravated criminal intent and is deserving of additional punishment for not conforming with the requirements of judicial process or orders issued by federal, state, or local administrative agencies.

Offenses that involve the use of financial transactions or financial accounts outside the United States in an effort to conceal illicit profits and criminal conduct involve a particularly high level of sophistication and complexity. These offenses are difficult to detect and require costly investigations and prosecutions. Diplomatic processes often must be used to secure testimony and evidence beyond the jurisdiction of United States courts. Consequently, a minimum offense level of level 12 is provided for these offenses.

Subsection (b)(6) implements the instruction to the Commission in section 2 of Public Law 105-101.

Subsection (b)(7)(D) implements, in a broader form, the directive in section 3 of the College Scholarship Fraud Prevention Act of 2000, Public law 106-420.

Subsection (b)(8) implements, in a broader form, the instruction to the Commission in section 6(c)(2) of Public Law 105-184.

Subsections (b)(9)(A) and (B) implement the instruction to the Commission in section 4 of the Wireless Telephone Protection Act, Public Law 105-172.

Subsection (b)(9)(C) implements the directive to the commission in section 4 of the Identity Theft and Assumption Deterrence Act of 1998, Public Law 105-318. This subsection focuses principally on an aggravated form of identity theft known as “affirmative identity theft” or “breeding”, in which a defendant uses another individual's name, social security number, or some other form of identification (the “means of identification”) to “breed” (i.e., produce or obtain) new or additional forms of identification. Because 18 U.S.C. 1028(d) broadly defines “means of identification”, the new or additional forms of identification can include items such as a driver's license, a credit card, or a bank loan. This subsection provides a minimum offense level of level 12, in part because of the seriousness of the offense. The minimum offense level accounts for the fact that the means of identification that were “bred” (i.e., produced or obtained) often are within the defendant's exclusive control, making it difficult for the individual victim to detect that the victim's identity has been “stolen.” Generally, the victim does not become aware of the offense until certain harms have already occurred (e.g., a damaged credit rating or an inability to obtain a loan). The minimum offense level also accounts for the non-monetary harm associated with these types of offenses, much of which may be difficult or impossible to quantify (e.g., harm to the individual's reputation or credit rating, inconvenience, and other difficulties resulting from the offense). The legislative history of the Identity Theft and Assumption Deterrence Act of 1998 indicates that Congress was especially concerned with providing increased punishment for this type of harm.

Subsection (b)(11)(B) implements, in a broader form, the instruction to the Commission in section 110512 of Public Law 103-322.

Subsection (b)(12)(A) implements, in a broader form, the instruction to the Commission in section 2507 of Public Law 101-647.

Subsection (b)(12)(B) implements, in a broader form, the instruction to the Commission in section 961(m) of Public Law 101-73.

Subsection (d) implements the instruction to the Commission in section 805(c) of Public Law 104-132.”.

Chapter Two, Part B is amended by striking § 2B1.3 and its accompanying commentary.

Chapter Two is amended by striking the heading of Part F, § 2F1.1 and its accompanying commentary, and § 2F1.2 and its accompanying commentary, and by adding at the end of Part B the following:

“§ 2B1.4. Insider Trading

(a) Base Offense Level: 8

(b) Specific Offense Characteristic

(1) If the gain resulting from the offense exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.

Commentary

Statutory Provisions:

15 U.S.C. 78j and 17 CFR 240.10b-5. For additional statutory provisions(s), see Appendix A (Statutory Index).

Application Note

Application of Subsection of § 3B1.3.

—(Section 3B1.3 (Abuse of

Position of Trust or Use of Special Skill) should be applied only if the defendant occupied and abused a position of special trust. Examples might include a corporate president or an attorney who misused information regarding a planned but unannounced takeover attempt. It typically would not apply to an ordinary “tippee”.

Background:

This guideline applies to certain violations of Rule 10b-5 that are commonly referred to as ‘inside trading’. Insider trading is treated essentially as a sophisticated fraud. Because the victims and their losses are difficult if not impossible to identify, the gain, i.e., the total increase in value realized through trading in securities by the defendant and persons acting in concert with the defendant or to whom the defendant provide inside information, is employed instead of the victims' losses.

Certain other offenses, e.g., 7 U.S.C. 13(e), that involve misuse of inside information for personal gain also appropriately may be covered by this guideline.”.

The Commentary to § 1B1.1 captioned “Application Notes” is amended in Note 1 by striking subdivision (f); and by redesignating subdivisions (g) through (l) as subdivisions (f) through (k), respectively.

The Commentary to § 1B1.1 captioned “Application Notes” is amended in Note 4 in the second paragraph by striking the last sentence.

The Commentary to § 1B1.2 captioned “Application Notes” is amended in Note 1 in the fourth paragraph by striking “§ 2B1.1 (Larceny, Embezzlement, and Other Forms of Theft)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

The Commentary to § 1B1.3 captioned “Application Notes” is amended in Note 5 by striking “§ 2F1.1 (Fraud and Deceit)” and inserting “§ 2B1.1(Theft, Property Destruction, and Fraud)”.

The Commentary to § 2B2.1 captioned “Application Notes” is amended in Note 1 by striking “ ‘More than minimal planning,’ ‘firearm,’ ” and inserting “ ‘Firearm,’ ”.

The Commentary to § 2B1.1 captioned “Application Notes” is amended by striking the text of Note 2 and inserting:

“ ‘Loss’ ” means the value of the property taken, damaged, or destroyed.”.

The Commentary to § 2B1.1 captioned “Application Notes” is amended by adding at the end the following:

“4. More than Minimal Planning.—‘More than minimal planning’ means more planning than is typical for commission of the offense in a simple form. ‘More than minimal planning’ also exists if significant affirmative steps were taken to conceal the offense, other than conduct to which § 3C1.1 (Obstructing or Impeding the Administration of Justice) applies. ‘More than minimal planning’ shall be considered to be present in any case involving repeated acts over a period of time, unless it is clear that each instance was purely opportune. For example, checking the area to make sure no witnesses were present would not alone constitute more than minimal planning. By contrast, obtaining building plans to plot a particular course of entry, or disabling an alarm system, would constitute more than minimal planning.”.

Section 2B2.3(b) is amended by striking subdivision (3) and inserting the following:

“(3) If (A) the offense involved invasion of a protected computer; and (B) the loss resulting from the invasion (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

The Commentary to § 2B2.3 captioned “Application Notes” is amended in Note 2 by striking “§ 2B1.1 (Larceny, Embezzlement, and Other Forms of Theft)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

The Commentary to § 2B3.1 captioned “Application Notes” is amended by striking the text of Note 3 and inserting:

“ ‘Loss’ means the value of the property taken, damaged, or destroyed”.

Section 2B3.(b) is amended by striking subdivision (1) and inserting the following:

“(1) If the greater of the amount obtained or demanded (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

Section 2B4.1(b) is amended by striking subdivision (1) and inserting the following:

“(1) If the greater of the value of the bribe or the improper benefit to be conferred (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

Section 2B5.1(b) is amended by striking subdivision (1) and inserting the following:

“(1) If the face value of the counterfeit items (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

The Commentary to § 2B5.1 captioned “Application Notes” is amended in Note 3 by inserting “Inapplicability to Genuine but Fraudulently Altered Instruments.—” before “ ‘Counterfeit,' ”; and by striking “§ 2F1.1 (Fraud and Deceit)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

Section 2B5.3(b) is amended by striking subdivision (1) and inserting the following:

“(1) If the infringement amount (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

The Commentary to § 2B5.3 captioned “Background” is amended in the first paragraph by striking “guidelines” and inserting “guideline”.

Section 2B6.1(b) is amended by striking subdivision (1) and inserting the following:

“(1) If the retail value of the motor vehicles or parts (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

The Commentary to § 2B6.1 captioned “Application Notes” is amended in Note 1 by striking “§ 2B1.1 (Larceny, Embezzlement, and Other Forms of Theft)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

The Commentary to § 2B6.1 captioned “Application Notes” is amended in Note 2 by striking “corresponding” before “number” and inserting “term ‘increase by the”; and by striking “§ 2F1.1 (Fraud and Deceit)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount”.

Section 2C1.1(b) is amended by striking subdivision (2)(A) and inserting the following:

“(A) If the value of the payment, the benefit received or to be received in return for the payment, or the loss to the government from the offense, whichever is greatest (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

The Commentary to § 2C1.1 captioned “Application Notes” is amended in Note 2 by striking “ ‘Loss’ is discussed in the Commentary to § 2B1.1 (Larceny, Embezzlement, and Other Forms of Theft) and includes both actual and intended loss” and inserting “ ‘Loss’, for purposes of subsection (b)(2)(A), shall be determined in accordance with Application Note 2 of the Commentary to § 2B1.1 (Theft, Property Destruction, and Fraud)”.

Section 2C1.2(b) is amended by striking subdivision (2)(A) and inserting the following:

“(A) If the value of the gratuity (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

Section 2C1.6(b) is amended by striking subdivision (1) and inserting the following:

“(1) If the value of the gratuity (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

Section 2C1.7(b) is amended by striking subdivision (1)(A) and inserting the following:

“(A) If the loss to the government, or the value of anything obtained or to be obtained by a public official or others acting with a public official, whichever is greater (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

The Commentary to § 2C1.7 captioned “Application Notes” is amended by striking the text of Note 3 and inserting:

“ ‘Loss’, for purposes of subsection (b)(1)(A), shall be determined in accordance with Application Note 2 of the Commentary to § 2B1.1 (Theft, Property Destruction, and Fraud).”.

Section 2E5.1(b) is amended by striking subdivision (2) and inserting the following:

“(2) If the value of the prohibited payment or the value of the improper benefit to the payer, whichever is greater (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.”.

Section 2G2.2(b)(2)(A) is amended by striking “§ 2F1.1 (Fraud and Deceit)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

Section 2G3.1(b)(1)(A) is amended by striking “§ 2F1.1 (Fraud and Deceit)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

Section 2G3.2(b)(2) is amended by striking “at § 2F1.1(b)(1)” and inserting “in § 2B1.1 (Theft, Property Destruction, and Fraud)”.

Section 2H3.3(a) is amended by striking the text of subdivision (2) and inserting: “if the conduct was theft or destruction of mail, apply § 2B1.1 (Theft, Property Destruction, and Fraud).”; and by striking subdivision (3).

The Commentary to § 2H3.3 captioned “Background” is amended by striking “§ 2B1.1 (Larceny, Embezzlement, and Other Forms of Theft) or § 2B1.3 (Property Damage or Destruction)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

The Commentary to § 2J1.1 captioned “Application Notes” is amended in Note 2 by striking “(Larceny, Embezzlement, and Other Forms of Theft)” and inserting “(Theft, Property Destruction, and Fraud)”.

Section 2K1.4(a) is amended by striking the text of subdivision (3) and inserting: “2 plus the offense level from § 2B1.1 (Theft, Property Destruction, and Fraud).”; and by striking subdivision (4).

Section 2K1.4(b)(2) is amended by striking “(4)” and inserting “(3)”.

Section 2N2.1(b)(1) is amended by striking “§ 2F1.1 (Fraud and Deceit)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

The Commentary to § 2N2.1 captioned “Statutory Provisions” is amended by inserting “, 6810, 7734” after “150gg”.

The Commentary to § 2N2.1 captioned “Application Notes” is amended in Note 2 by inserting “theft, property destruction, or” after “involved”; and by striking “theft, bribery, revealing trade secrets, or destruction of property” and inserting “bribery”.

The Commentary to § 2N2.1 captioned “Application Notes” is amended in Note 4 by striking “§ 2F1.1 (Fraud and Deceit)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

Section 2N3.1(b)(1) is amended by striking “§ 2F1.1 (Fraud and Deceit)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

The Commentary to § 2N3.1 captioned “Background” is amended by striking “the guideline for fraud and deception, § 2F1.1,” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

Section 2Q1.6(a)(2) is amended by striking “§ 2B1.3 (Property Damage or Destruction)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

Section 2Q2.1(b) is amended by striking subdivision (3)(A) and inserting the following:

“(A) If the market value of the fish, wildlife, or plants (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in § 2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount; or ”.

Section 2S1.3(a) is amended by striking “§ 2F1.1 (Fraud and Deceit)” and inserting “§ 2B1.1 (Theft, Property Destruction, and Fraud)”.

Section 2T1.1(b)(2) is amended by striking “concealment” and inserting “means”; and by inserting after “levels.” the following: “If the resulting offense level is less than level 12, increase to level 12.”.

Section 2T1.1(c)(1) is amended by adding at the end the following:

“(D) If the offense involved (i) conduct described in subdivisions (A), (B), or (C) of these Notes; and (ii) both individual and corporate tax returns, the tax loss is the aggregate tax loss from the offenses added together.”.

Section 2T1.1(c)(2) is amended in the second paragraph by striking “Note” and inserting “Notes”; by inserting “(A)” before “If”; and by adding at the end the following:

“(B) If the offense involved (i) conduct described in subdivision (A) of these Notes; and (ii) both individual and corporate tax returns, the tax loss is the aggregate tax loss from the offenses added together.”.

The Commentary to § 2T1.1 captioned “Application Notes” is amended in Note 1 in the first paragraph by inserting “, except in willful evasion of payment cases under 26 U.S.C. 7201 and willful failure to pay cases under 26 U.S.C. 7203” after “penalties”.

The Commentary to § 2T1.1 captioned “Application Notes” is amended by striking the text of Note 4 and inserting the following:

“Sophisticated Means Enhancement.—For purposes of subsection (b)(2), ‘sophisticated means’ means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts ordinarily indicates sophisticated means.”.

The Commentary to § 2T1.1 captioned “Application Notes” is amended by

striking the text of Note 7 and inserting the following:

“If the offense involved both individual and corporate tax returns, the tax loss is the aggregate tax loss from the individual tax offense and the corporate tax offense added together. Accordingly, in a case in which a defendant fails to report income derived from a corporation on both the defendant's individual tax return and the defendant's corporate tax return, the tax loss is the sum of (A) the unreported or diverted amount multiplied by (i) 28%; or (ii) the tax rate for the individual tax offense, if sufficient information is available to make a more accurate assessment of that tax rate; and (B) the unreported or diverted amount multiplied by (i) 34%; or (ii) the tax rate for the corporate tax offense, if sufficient information is available to make a more accurate assessment of that tax rate. For example, the defendant, the sole owner of a Subchapter C corporation, fraudulently understates the corporation's income in the amount of $100,000 on the corporation's tax return, diverts the funds to the defendant's own use, and does not report these funds on the defendant's individual tax return. For purposes of this example, assume the use of 34% with respect to the corporate tax loss and the use of 28% with respect to the individual tax loss. The tax loss attributable to the defendant's corporate tax return is $34,000 ($100,000 multiplied by 34%). The tax loss attributable to the defendant's individual tax return is $28,000 ($100,000 multiplied by 28%). The tax loss for the offenses are added together to equal $62,000 ($34,000 + $28,000).”.

Section 2T1.4(b)(2) is amended by striking “concealment” and inserting “means”; and by inserting after “levels.” the following: “If the resulting offense level is less than level 12, increase to level 12.”.

The Commentary to § 2T1.4 captioned “Application Notes” is amended by striking the text of Note 3 and inserting the following:

“Sophisticated Means.—For purposes of subsection (b)(2), ‘sophisticated means’ means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts ordinarily indicates sophisticated means.”.

Section 2T1.6(b)(1) is amended by striking “(Larceny, Embezzlement, and Other Forms of Theft)” and inserting “(Theft, Property Destruction, and Fraud)”.

Section 2T3.1(b)(1) is amended by striking “concealment” and inserting “means”; and by inserting after “levels.” the following: “If the resulting offense level is less than level 12, increase to level 12.”.

The Commentary to § 2T3.1 captioned “Application Notes” is amended by striking the text of Note 3 and inserting the following:

“Sophisticated Means.—For purposes of subsection (b)(1), ‘sophisticated means’ means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts ordinarily indicates sophisticated means.”.

Section 2T4.1 is amended by striking the text and inserting the following:

“Tax loss (apply the greatest)

Offense level

(A) $2,000 or less

(B) More than $2,000

(D) More than $12,500

(E) More than $30,000

(F) More than $80,000

(G) More than $200,000

(H) More than $400,000

(I) More than $1,000,000

(J) More than $2,500,000

(K) More than $7,000,000

(L) More than $20,000,000

(M) More than $50,000,000

(N) More than $100,000,000

32.”.

The Commentary to § 3B1.3 captioned “Application Notes” is amended by adding after Note 3 the following:

“4. The following additional illustrations of an abuse of a position of trust pertain to theft or embezzlement from employee pension or welfare benefit plans or labor unions:

(A) If the offense involved theft or embezzlement from an employee pension or welfare benefit plan and the defendant was a fiduciary of the benefit plan, an adjustment under this section for abuse of a position of trust will apply. “Fiduciary of the benefit plan” is defined in 29 U.S.C. 1002(21)(A) to mean a person who exercises any discretionary authority or control in respect to the management of such plan or exercises authority or control in respect to management or disposition of its assets, or who renders investment advice for a fee or other direct or indirect compensation with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or who has any discretionary authority or responsibility in the administration of such plan.

(B) If the offense involved theft or embezzlement from a labor union and the defendant was a union officer or occupied a position of trust in the union (as set forth in 29 U.S.C. 501(a)), an adjustment under this section for an abuse of a position of trust will apply.”.

Section 3D1.2(d) is amended in the second paragraph by striking “2B1.3” and inserting “2B1.4”; and by striking “§§ 2F1.1, 2F1.2;”.

The Commentary to § 3D1.2 captioned “Application Notes” is amended in Note 6 in the third paragraph by striking “, and would include, for example, larceny, embezzlement, forgery, and fraud”.

Section 3D1.3(b) is amended by striking “(e.g., theft and fraud)”.

The Commentary to § 3D1.3 captioned “Application Notes” is amended in Note 3 by striking “(e.g., theft and fraud)”; and by striking the last sentence.

The Commentary following § 3D1.5 captioned “Illustrations of the Operation of the Multiple-Count Rules” is amended by striking Illustration 2; and by redesignating Illustrations 3 and 4 as Illustrations 2 and 3, respectively.

The Commentary following § 3D1.5 captioned “Illustrations of the Operation of the Multiple-Count Rules” is amended in Illustration 3, as redesignated by this amendment, by striking “§ 2F1.1 (Fraud and Deceit)” and inserting “§ 2B1.1 (Theft, Prope

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