Sentencing Guidelines for United States Courts

UNITED STATES SENTENCING COMMISSION

Sentencing Guidelines for United States Courts

AGENCY: United States Sentencing Commission.

ACTION: Notice of proposed amendments to sentencing guidelines, policy

statements, and commentary. Request for public comment.

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SUMMARY: The Commission is considering promulgating certain amendments

to the sentencing guidelines, policy statements, and commentary. This

notice sets forth the proposed amendments and, for each proposed

amendment, a synopsis of the issues addressed by that amendment. The

Commission seeks comment on the proposed amendments, alternative

proposed amendments, and any other aspect of the sentencing guidelines,

policy statements, and commentary. The Commission may submit amendments

to the Congress not later than May 1, 1996.

DATES: Written public comment should be received by the Commission not

later than March 6, 1996, in order to be considered by the Commission

in the promulgation of amendments and in the possible submission of

those amendments to the Congress by May 1, 1996.

ADDRESSES: Public comment should be sent to: United States Sentencing

Commission, One Columbus Circle, N.E., Suite 2-500, Washington, D.C.

20002-8002, Attention: Public Information.

FOR FURTHER INFORMATION CONTACT: Michael Courlander, Public Information

Specialist, Telephone: (202) 273-4590.

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

guideline amendments to the Congress not later than the first day of

May each year pursuant to 28 U.S.C. 994(p).

Ordinarily, the rule-making requirements of the Administrative

Procedure Act are inapplicable to judicial agencies; however, 28 U.S.C.

994(x) makes the rule-making provisions of 5 U.S.C. 553 applicable to

the promulgation of sentencing guidelines by the Commission.

The proposed amendments are presented in this notice in one of two

formats. First, some of the amendments are proposed as specific

revisions of a guideline, policy statement, or commentary. Second, the

Commission has highlighted certain issues for comment and invites

suggestions for specific amendment language and, in the case of

penalties for cocaine offenses, related legislative proposals.

Section 1B1.10 of the United States Sentencing Commission

Guidelines Manual sets forth the Commission's policy statement

regarding retroactivity of amended guideline ranges. The Commission

requests comment as to whether any of the proposed amendments should be

made retroactive under this policy statement.

As set forth more fully in its notice dated September 22, 1995,

(see 60 F.R. 49316-17), the Commission currently is engaged in a

comprehensive guideline assessment and simplification effort. This

project is expected to be a two-year initiative that may produce

amendments in the 1996-97 amendment cycle for submission to Congress

not later than May 1, 1997. During this initial year of the project,

the Commission generally plans to promulgate no guideline amendments,

except as may be necessary to implement legislation enacted by

Congress. The Commission believes that a one-year hiatus in the

heretofore annual amendment process is appropriate at this juncture to

allow a guideline settling period and to permit more deliberate

consideration of broader guideline concerns.

The matters published for comment in this notice pertaining to

sentencing policy for cocaine and money laundering offenses are

responsive to Pub. L. 104-38 (Oct. 30, 1995). The matters relating to

proposed guideline amendments for food and drug offenses are a product

of a staff working group that has considered these issues during the

past two years. The Commission voted at its September 5, 1995, meeting,

prior to its subsequent decision declaring a one-year hiatus on

Commission amendment initiatives, to

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publish these amendments for comment.

Publication of these matters for comment reflects only the

Commission's determination that public comment on the amendment or

issue would be welcome and helpful at this time. The Commission may or

may not act upon these proposals in the current amendment cycle.

Authority. 28 U.S.C. 994 (a), (o), (p), (x).

Richard P. Conaboy,

Chairman.

Cocaine Offenses

Chapter Two, Part D (Offenses Involving Drugs)

1. Issue for Comment: The Violent Crime Control and Law Enforcement

Act of 1994 directed the Commission to issue a report and

recommendations on the issue of cocaine and federal sentencing policy.

On February 28, 1995, the Commission issued its report to Congress in

which it recommended that changes be made to the current cocaine

sentencing scheme, including changes to the 100-to-1 quantity ratio

between crack cocaine and powder cocaine used in calculating sentences

in the current guidelines. The report indicated that the Commission

would investigate the feasibility of creating new guideline

enhancements and amending current enhancements to more fully and fairly

address the harms associated with cocaine offenses generally and the

harms associated with crack cocaine offenses, specifically. Based on

these new enhancements, the Commission would make appropriate

adjustments in the guideline quantity ratio.

On May 1, 1995, the Commission sent to Congress proposed changes to

the sentencing guidelines implementing the recommendations made in the

report. See 60 Fed. Reg. 25074, 25075-77 (May 10, 1995). The proposed

guidelines included provisions that would have enhanced penalties for

drug offenders, including crack cocaine offenders, who used weapons

during their drug crimes, involved minors in the drug crimes, or

committed their crimes near a school, or for other specified reasons

that made those crimes more dangerous to society. In addition, the

proposed amendments adjusted the guideline quantity ratio so that the

base sentences, from which the enhancements would be added, would be

the same for both powder cocaine and crack cocaine offenses.

Pursuant to 28 U.S.C. 994(p), Congress subsequently enacted

legislation disapproving the Commission's proposed amendments. See Pub.

L. 104-38, 109 Stat. 334 (Oct. 30, 1995). In the legislation, Congress

directed the Commission to:

``(1) * * * submit to Congress recommendations (and an

explanation therefor), regarding changes to the statutes and sentencing

guidelines governing sentences for unlawful manufacturing, importing,

exporting, trafficking of cocaine, and like offenses, including

unlawful possession with intent to commit any of the foregoing

offenses, and attempt and conspiracy to commit any of the foregoing

offenses. The recommendations shall reflect the following

considerations--

(A) the sentence imposed for trafficking in a quantity of crack

cocaine should generally exceed the sentence imposed for trafficking in

a like quantity of powder cocaine;

(B) high-level wholesale cocaine traffickers, organizers, and

leaders, of criminal activities should generally receive longer

sentences than low-level retail cocaine traffickers and those who

played a minor or minimal role in such activity;

(C) if the Government establishes that a defendant who traffics in

powder cocaine has knowledge that such cocaine will be converted into

crack cocaine prior to its distribution to individual users, the

defendant should be treated at sentencing as though the defendant had

trafficked in crack cocaine; and

(D) an enhanced sentence should generally be imposed on a defendant

who, in the course of an offense described in this subsection--

(i) murders or causes serious bodily injury to an individual;

(ii) uses a dangerous weapon;

(iii) uses or possesses a firearm;

(iv) involves a juvenile or a woman who the defendant knows or

should know to be pregnant;

(v) engages in a continuing criminal enterprise or commits other

criminal offenses in order to facilitate his drug trafficking

activities;

(vi) knows, or should know, that he is involving an unusually

vulnerable person;

(vii) restrains a victim;

(viii) traffics in cocaine within 500 feet of a school;

(ix) obstructs justice;

(x) has a significant prior criminal record; or

(xi) is an organizer or leader of drug trafficking activities

involving five or more persons.

(2) Ratio.--The recommendations described in the preceding

subsection shall propose revision of the drug quantity ratio of crack

cocaine to powder cocaine under the relevant statutes and guidelines in

a manner consistent with the ratios set for other drugs and consistent

with the objectives set forth in section 3553(a) of title 28 United

States Code.''

The Commission invites comment regarding implementation of this

congressional directive, including comment on appropriate enhancements

for violence and other harms associated with crack and powder cocaine,

as well as the quantity ratio that should be substituted for the

current 100-to-1 ratio. (Note that the reference in the congressional

directive to section 3553(a) of title 28, United States Code, should be

a reference to section 3553(a) of title 18, United States Code.)

A number of amendment proposals and issues for comment relating to

cocaine sentencing policy are set forth in the Federal Registers of

January 9 and March 15, 1995. See 60 Fed. Reg. 2430, 2445-51; 14054-55.

Money Laundering Offenses

Chapter Two, Part S (Money Laundering and Monetary Transaction

Reporting)

2. Synopsis of Proposed Amendment: In 1992, the Commission formed a

staff working group to assess the operation of the guidelines for money

laundering and monetary transaction reporting offenses. The group

produced a report and recommended amendments. The Commission

subsequently adopted a revised guideline covering monetary transaction

reporting offenses. See Guidelines Manual, Appendix C, Amendment 490

(effective November 1, 1993). In 1995, after considering an updated

analysis prepared by the working group, the Commission adopted a

revised, consolidated guideline for money laundering offenses. See

amendment 18, 60 Fed. Reg. 25074, 25085-86 (May 10, 1995). This

amendment subsequently was disapproved by Congress. See Pub. L. 104-38,

109 Stat. 334 (Oct. 30, 1995). Congressional debate related to the

disapproval legislation appears to suggest, however, that the

Commission is expected to modify and resubmit appropriate amendments to

the money laundering guidelines, taking into account concerns that

serious money laundering offenses continue to receive appropriately

severe punishment. See generally 14 Cong. Rec. H10,255-84 (daily ed.

Oct. 18, 1995).

Accordingly, to frame the discussion for continued efforts to

develop appropriate revisions to the money laundering guidelines, the

Commission is republishing for comment the amendment submitted to

Congress in 1995 along with a Department of Justice alternative. The

Commission invites

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comment on these alternative proposals or on some variation of them

that appropriately addresses the goals of: (1) Assuring that offense

levels comport with the seriousness of the defendant's offense conduct;

and (2) avoiding unwarranted sentencing disparities as a result of

charging practices.

(A) Proposed Amendment

Sections 2S1.1 and 2S1.2 are deleted and the following inserted in

lieu thereof:

``Sec. 2S1.1. Laundering of Monetary Instruments; Engaging in

Monetary Transactions in Property Derived from Unlawful Activity

(a) Base Offense Level (Apply the Greatest)

(1) The offense level for the underlying offense from which the

funds were derived, if the defendant committed the underlying offense

(or otherwise would be accountable for the commission of the underlying

offense under Sec. 1B1.3 (Relevant Conduct)) and the offense level for

that offense can be determined; or

(2) 12 plus the number of offense levels from the table in

Sec. 2F1.1 (Fraud and Deceit) corresponding to the value of the funds,

if the defendant knew or believed that the funds were the proceeds of,

or were to be used to promote, an offense involving the manufacture,

importation, or distribution of controlled substances or listed

chemicals; a crime of violence; or an offense involving firearms or

explosives, national security, or international terrorism; or

(3) 8 plus the number of offense levels from the table in

Sec. 2F1.1 (Fraud and Deceit) corresponding to the value of the funds.

(b) Specific Offense Characteristics

(1) If the defendant knew or believed that (A) the financial or

monetary transactions, transfers, transportation, or transmissions were

designed in whole or in part to conceal or disguise the proceeds of

criminal conduct, or (B) the funds were to be used to promote further

criminal conduct, increase by 2 levels.

(2) If subsection (b)(1)(A) is applicable and the offense (A)

involved placement of funds into, or movement of funds through or from,

a company or financial institution outside the United States, or (B)

otherwise involved a sophisticated form of money laundering, increase

by 2 levels.

Commentary

Statutory Provisions: 18 U.S.C. 1956, 1957.

Application Notes

1. ``Value of the funds'' means the value of the funds or property

involved in the financial or monetary transactions, transportation,

transfers, or transmissions that the defendant knew or believed (A)

were criminally derived funds or property, or (B) were to be used to

promote criminal conduct.

When a financial or monetary transaction, transfer, transportation,

or transmission involves legitimately derived funds that have been

commingled with criminally derived funds, the value of the funds is the

amount of the criminally derived funds, not the total amount of the

commingled funds. For example, if the defendant deposited $50,000

derived from a bribe together with $25,000 of legitimately derived

funds, the value of the funds is $50,000, not $75,000.

Criminally derived funds are any funds that are derived from a

criminal offense; e.g., in a drug trafficking offense, the total

proceeds of the offense are criminally derived funds. In a case

involving fraud, however, the loss attributable to the offense

occasionally may be considerably less than the value of the criminally

derived funds (e.g., the defendant fraudulently sells stock for

$200,000 that is worth $120,000 and deposits the $200,000 in a bank;

the value of the criminally derived funds is $200,000, but the loss is

$80,000). If the defendant is able to establish that the loss, as

defined in Sec. 2F1.1 (Fraud and Deceit), was less than the value of

the funds (or property) involved in the financial or monetary

transactions, transfers, transportation, or transmissions, the loss

from the offense shall be used as the 'value of the funds.'

2. If the defendant is to be sentenced both on a count for an

offense from which the funds were derived and on a count under this

guideline, the counts will be grouped together under subsection (c) of

Sec. 3D1.2 (Groups of Closely-Related Counts).

3. Subsection (b)(1)(A) provides an increase for those cases that

involve efforts to make criminally derived funds appear to have a

legitimate source. This subsection will apply, for example, when the

defendant conducted a transaction through a straw party or a front

company, concealed a money-laundering transaction in a legitimate

business, or used an alias or otherwise provided false information to

disguise the true source or ownership of the funds.

4. In order for subsection (b)(1)(B) to apply, the defendant must

have known or believed that the funds would be used to promote further

criminal conduct, i.e, criminal conduct beyond the underlying criminal

conduct from which the funds were derived.

5. Subsection (b)(2) provides an additional increase for those

money laundering cases that are more difficult to detect because

sophisticated steps were taken to conceal the origin of the money.

Subsection (b)(2)(B) will apply, for example, if the offense involved

the 'layering' of transactions, i.e., the creation of two or more

levels of transaction that were intended to appear legitimate.

Background

The statutes covered by this guideline were enacted as part of the

Anti-Drug Abuse Act of 1986. These statutes cover a wide range of

conduct. For example, they apply to large-scale operations that engage

in international laundering of illegal drug proceeds. They also apply

to a defendant who deposits $11,000 of fraudulently obtained funds in a

bank. In order to achieve proportionality in sentencing, this guideline

generally starts from a base offense level equivalent to that which

would apply to the specified unlawful activity from which the funds

were derived. The specific offense characteristics provide enhancements

if the offense was designed to conceal or disguise the proceeds of

criminal conduct and if the offense involved sophisticated money

laundering.''.

Section 3D1.2(d) is amended in the second paragraph by deleting

``2S1.2,''.

Section 8C2.1(a) is amended by deleting ``2S1.2,''.

The Commentary to Sec. 8C2.4 captioned ``Application Notes'' is

amended in Note 5 by deleting ``Sec. 2S1.1 (Laundering of Monetary

Instruments); Sec. 2S1.2 (Engaging in Monetary Transactions in Property

Derived from Specified Unlawful Activity); and Sec. 2S1.3 (Structuring

Transactions to Evade Reporting Requirements; Failure to Report Cash or

Monetary Transactions; Failure to File Currency and Monetary Instrument

Report; Knowingly Filing False Reports)''; and by inserting ``or''

immediately before ``Sec. 2R1.1''.

Appendix A (Statutory Index) is amended in the line reference to 18

U.S.C. Sec. 1957 by deleting ``2S1.2'' and inserting in lieu thereof

``2S1.1''.

(B) Proposed Amendment--Department of Justice Alternative

Sections 2S1.1 and 2S1.2 are deleted and the following inserted in

lieu thereof:

``Sec. 2S1.1. Laundering of Monetary Instruments; Engaging in

Monetary Transactions in Property Derived from Unlawful Activity

[[Page 82]]

(a) Base Offense Level (Apply the Greatest)

(1) the offense level for the underlying offense from which the

funds were derived plus 2 levels, if the defendant committed the

underlying offense and the offense level for that offense can be

determined; or

(2) 16 plus the number of offense levels from the table in

Sec. 2F1.1 (Fraud and Deceit) corresponding to the value of the funds,

if the defendant knew or believed that the funds were the proceeds of

an unlawful activity involving a matter of national security or

munitions control, a crime of violence, a firearm, an explosive, the

sexual exploitation of children, or the manufacture, importation, or

distribution of a controlled substance, or were intended to promote

those offenses; or

(3) 12 plus the number of offense levels from the table in

Sec. 2F1.1 (Fraud and Deceit) corresponding to the value of the funds.

(b) Specific Offense Characteristics

(1) Apply the greater:

(A) If the defendant knew or believed that (i) the transactions

were designed in whole or in part to conceal or disguise the proceeds

of criminal conduct, or (ii) the funds were to be used to promote

further criminal activity, increase by 2 levels; or

(B) If the defendant (i) intended to engage in conduct constituting

a violation of section 7201 or 7206 of the Internal Revenue Code of

1986, or (ii) knew or believed that the transactions were designed in

whole or in part to avoid a transaction reporting requirement under

State or Federal law, increase by 1 level.

(2) If subsection (b)(1)(A) is applicable and the offense involved

(A) placement of funds into, or movement of funds through or from, a

company or financial institution outside the United States, or (B)

otherwise involved the used of a sophisticated form of money

laundering, increase by 2 levels.

(c) Special Instruction for Receipt and Deposit Cases

The offense level is 8 plus the number of offense levels from the

table in Sec. 2F1.1 (Fraud and Deceit) corresponding to the value of

the funds where all of the following are present:

(1) the defendant's money laundering conduct is limited solely to

the deposit of the unlawful proceeds into a domestic financial

institution account that is readily identifiable as belonging to the

person who committed the specified unlawful activity; (2) the offense

was not intended or designed, either in whole or in part, to conceal or

disguise the nature, location, source, ownership, or control of the

proceeds of specified unlawful activity, to violate section 7201 or

7206 of the Internal Revenue Code of 1986, or to avoid a transaction

reporting requirement under State or Federal law; and

(3) the specified unlawful activity did not involve a matter of

national security or munitions control, a crime of violence, a firearm,

an explosive, the sexual exploitation of children, or the manufacture,

importation, or distribution of a controlled substance.

Commentary

Statutory Provisions: 18 U.S.C. 1956, 1957.

Application Notes

1. ``Value of the funds'' means the value of the funds or property

involved in the financial or monetary transactions, transportation,

transfers, or transmissions that the defendant knew or believed (A)

were criminally derived funds or property, or (B) were to be used to

promote criminal conduct.

When a financial or monetary transaction, transfer, transportation,

or transmission involves legitimately derived funds that have been

commingled with criminally derived funds, the value of the funds is the

amount of the criminally derived funds, not the total amount of the

commingled funds. For example, if the defendant deposited $50,000

derived from a bribe together with $25,000 of legitimately derived

funds, the value of the funds is $50,000, not $75,000.

Where a financial or monetary transaction, transfer,

transportation, or transmission involves legitimately derived funds

from a place in the United States to or through a place outside the

United States or to a place in the United States from or through a

place outside the United States with the intent to promote the carrying

on of specified unlawful activity, the value of the funds is the amount

intended to promote the carrying on of specified unlawful activity.

2. If the defendant is to be sentenced both on a count for an

offense from which the funds were derived and on a count under this

guideline, the counts will be grouped together under subsection (c) of

Sec. 3D1.2 (Groups of Closely-Related Counts).

3. Subsection (b)(1)(A) is intended to provide an increase for

those cases that involve efforts to make criminally derived funds

appear to have a legitimate source. This subsection will apply, for

example, when the defendant conducted a transaction through a straw

party or a front company, concealed a money-laundering transaction in a

legitimate business, or used an alias or otherwise provided false

information to disguise the true source or ownership of the funds.

4. In order for subsection (b)(1)(B) to apply, the defendant must

have known or believed that the funds would be used to promote further

criminal conduct, i.e., criminal conduct beyond the underlying criminal

conduct from which the funds were derived.

5. Subsection (b)(2) is designed to provide an additional increase

for those money laundering cases that are more difficult to detect

because sophisticated steps were taken to conceal the origin of the

money. Subsection (b)(2)(B) will apply, for example, if the offense

involved the `layering' of transactions, i.e., the creation of two or

more levels of transaction that were intended to appear legitimate, or

if the offense involved the use of individuals or organizations engaged

in the business of money laundering, i.e., those who receive payment or

other benefit for conducting or assisting in the transaction.

6. The lower offense level provided by the special instruction in

subsection (c) is reserved for offenses which meet the specified

criteria. First, the defendant's money laundering conduct must be

limited solely to the deposit of the unlawful proceeds into a domestic

financial institution account that is readily identifiable as belonging

to the person who committed the specified unlawful activity. Second,

the offense cannot have been intended or designed, either in whole or

in part, to conceal or disguise the nature, location, source,

ownership, or control of the proceeds of the specified unlawful

activity, to violate section 7201 or 7206 of the Internal Revenue Code

of 1986, or to avoid a transaction reporting requirement under State or

Federal law. Finally, the underlying unlawful activity must not have

involved a matter of national security or munitions control, a crime of

violence, a firearm, an explosive, the sexual exploitation of children,

or the manufacture, importation, or distribution of a controlled

substance.

For example, a defendant who deposits a check constituting the

proceeds of his or her spouse's specified unlawful activity into the

spouse's account would qualify for the reduced level of subsection (c)

if all the other limitations are present.''.

[[Page 83]]

Food and Drug Offenses

Chapter Two, Parts D (Offenses Involving Drugs), F (Offenses Involving

Fraud or Deceit), and N (Offenses Involving Food, Drugs, Agricultural

Products, and Odometer Laws); Chapter Eight, Part C (Fines)

3. Synopsis of Proposed Amendment: In 1993, the Commission

established a Food and Drug Working Group to study the application of

the guidelines to food and drug offenses and to assess the feasibility

of developing organizational guidelines for offenses covered by

Sec. 2N2.1. During the first year of its work, the group studied food

and drug offenses and the operation of Sec. 2N2.1 as it applied to

individual defendants. In its second year, the group focussed its

attention on the development of organizational guidelines for these

offenses. In February 1995, a final report was submitted to the

Commission outlining the group's findings and conclusions. The report

is available for inspection at the Commission or through the Depository

Library System of the U.S. Government Printing Office. The report also

can be downloaded through USSC OnLine, the Commission's public access

electronic bulletin board, by dialing (202) 273-4709.

On September 5, 1995, the Commission voted to publish for comment

the working group's proposals for handling food and drug offenses under

the guidelines. With minor changes to the fraud guideline (Sec. 2F1.1),

the working group determined that food and drug cases for individuals

and organizations could appropriately be sentenced under that

guideline. The working group's proposal would delete existing

Sec. 2N2.1 (Violations of Statutes and Regulations Dealing With Any

Food, Drug, Biological Product, Device, Cosmetic, or Agricultural

Product) in its entirety and replace references to that guideline in

the statutory index with references to Sec. 2F1.1. To address concerns

about risk of harm associated with these offenses, the working group

recommended adding an application note to Sec. 2F1.1 inviting an upward

departure in circumstances in which the offense placed a large number

of persons at risk of serious bodily injury.

(A) Proposed Amendment--Consolidation of Secs. 2F1.1 and 2N2.1

Section 2N2.1 is deleted in its entirety.

Section 2F1.1 is amended in the title by inserting ``; Violations

of Statutes and Regulations Dealing With Any Food, Drug, Biological

Product, Device, Cosmetic, or Agricultural Product'' at the end

thereof.

The Commentary to Sec. 2F1.1 captioned ``Statutory Provisions'' is

amended by inserting ``21 U.S.C. Secs. 101-105, 111, 115, 117, 120-

122, 124, 126, 134(a)-(e), 135a, 141, 143-145, 151-158, 331, 333(a)(1)-

(2), 333(b), 458-461, 463, 466, 610-611, 614, 617, 619- 620, 642-644,

676'' immediately following ``2315''.

The Commentary to Sec. 8C2.1 captioned ``Application Notes'' is

amended in Note 2 by deleting the second sentence.

Appendix A is amended as follows:

in the line beginning ``7 U.S.C. Sec. 87b'' by deleting ``2N2.1''

and inserting in lieu thereof ``2F1.1'';

in the lines beginning ``7 U.S.C. Sec. 149'' through ``7 U.S.C.

Sec. 195'' by deleting ``2N2.1'' and inserting in lieu thereof

``2F1.1'';

in the lines beginning ``7 U.S.C. Sec. 281'' through ``7 U.S.C.

Sec. 516'' by deleting ``2N2.1'' and inserting in lieu thereof

``2F1.1'';

in the lines beginning ``21 U.S.C. Sec. 101'' through ``21 U.S.C.

Sec. 333(a)(1)'' by deleting ``2N2.1'' and inserting in lieu thereof

``2F1.1'';

in the line beginning ``21 U.S.C. Sec. 333(a)(2)'' by deleting ``,

2N2.1'';

in the lines beginning ``21 U.S.C. Sec. 333(b)'' through ``21

U.S.C. Sec. 620'' by deleting ``2N2.1'' and inserting in lieu thereof

``2F1.1'';

in the lines beginning ``21 U.S.C. Sec. 642'' through ``21 U.S.C.

Sec. 644'' by deleting ``2N2.1'' and inserting in lieu thereof

``2F1.1'';

in the line beginning ``21 U.S.C. Sec. 676'' by deleting ``2N2.1''

and inserting in lieu thereof ``2F1.1'';

in the line beginning ``42 U.S.C. Sec. 262'' by deleting ``2N2.1''

and inserting in lieu thereof ``2F1.1''.

(B) Proposed Amendment--Upward Departures for Offenses Involving Risk

to a Large Number of Persons

The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is

amended by inserting the following additional note:

``11. Subsection (b)(4) applies when the offense caused a conscious

or reckless risk of serious bodily injury to one or more persons. If

the risk affected a large number of persons, an upward departure may be

warranted.''

and by renumbering notes 11-18 as 12-19, respectively.

(C) Additional Issue for Comment

The Commission invites comment as to whether ``gain'' should be a

substitute for ``loss'' when the essence of the offense is fraud

against regulatory authorities with no economic loss. Currently,

Application Note 8 of Sec. 2F1.1 provides that gain realized from a

covered offense is an alternative estimate that ordinarily will

underestimate the loss. The Fourth and Seventh Circuits have held,

however, that when a case involves no loss, the defendant's gain may

not be used to calculate loss under Sec. 2F1.1. See United States v.

Chatterji, 46 F. 3d 1336 (4th Cir. 1995) and United States v. Anderson,

45 F. 3d 217 (7th Cir. 1995).

[FR Doc. 95-31570 Filed 12-29-95; 8:45 am]

BILLING CODE 2210-40-P