Sentencing Guidelines for United States Courts
Federal RegisterJan 2, 1997
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SUMMARY: The Sentencing Commission hereby gives notice of the following
actions: (1) pursuant to its authority under sections 203, 211, and 218
of the Illegal Immigration Reform and Immigrant Responsibility Act of
1996, the Commission is preparing to promulgate amendments to
Secs. 2L1.1, 2L2.1, 2L2.2, and 2H4.1 and accompanying commentary; (2)
pursuant to its authority under section 302 of the Comprehensive
Methamphetamine Control Act of 1996, the Commission is preparing to
promulgate amendments to Sec. 2D1.11 and accompanying commentary; and
(3) pursuant to section 217(a) of the Comprehensive Crime Control Act
of 1984 (28 U.S.C. 994 (a) and (p)), the Commission is considering
promulgating certain other non-emergency amendments to the sentencing
guidelines and commentary. The Commission may submit the latter, non-
emergency amendments to the Congress not later than May 1, 1997.
This notice sets forth the emergency and other proposed amendments
and a synopsis of the issues addressed by the amendments as well as
additional issues for comment. The proposed amendments are presented in
this notice in one of two formats. First, some of the amendments are
proposed as specific revisions to a guideline or commentary. Bracketed
text within a proposed amendment indicates alternative proposals and
that the Commission invites comment and suggestions for appropriate
policy choices; for example, a proposed enhancement of [3-5] levels
means a proposed enhancement of either three, four, or five levels.
Similarly, a proposed enhancement of [4] levels indicates that the
Commission is considering, and invites comment on, alternative policy
choices. Second, the Commission has highlighted certain issues for
comment and invites suggestions for specific amendment language.
DATES: (1) Emergency Amendments. Comment on the several emergency
amendments set forth in this notice should be received by the
Commission not later than February 4, 1997. After considering any
public comment, the Commission plans to address possible promulgation
of the emergency amendments at its meeting scheduled for February 11,
1997, at the Commission's offices in the Thurgood Marshall Federal
Judiciary Building (meeting time to be determined).
(2) Non-Emergency Amendments. Comment on the non-emergency
amendments and issues set forth in this notice should be received not
later than March 17, 1997. The Commission has scheduled a public
hearing on the proposed non-emergency amendments for March 17, 1997, at
the Thurgood Marshall Federal Judiciary Building, One Columbus Circle,
N.E,. Washington, D.C. 20002-8002.
A person who desires to testify at the public hearing should notify
Michael Courlander, Public Information Specialist, at (202) 273-4590
not later than March 3, 1997. Written testimony for the hearing must be
received by the Commission not later than March 10, 1997. Submission of
written testimony is a requirement for testifying at the public
hearing.
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.
Authority: 28 U.S.C. 994 (a), (o), (p), (x).
Richard P. Conaboy,
Chairman.
Emergency Amendments
Section 2D1.11 Unlawfully Distributing, Importing, Exporting or
Possessing a Listed Chemical; Attempt or Conspiracy
1. Synopsis of Proposed Amendment: This amendment implements
section 302 of the Comprehensive Methamphetamine Control Act of 1996.
That section raises the statutory maximum penalties under 21 U.S.C.
841(d) and 960(d) from ten to twenty years' imprisonment. The Act also
instructs the Commission to increase by at least two levels the offense
levels for offenses involving list I chemicals under 21 U.S.C. 841(d)
(1) and (2) and 960(d) (1) and (3). These offenses involve the
possession and importation of listed chemicals knowing, or having
reasonable cause to believe, the chemicals will be used to unlawfully
manufacture a controlled substance. In carrying out these instructions,
the Act requires that the offense levels be calculated proportionately
on the basis of the quantity of controlled substance that reasonably
could be manufactured in a clandestine setting using the quantity of
list I chemical possessed, distributed, imported, or exported.
Current Operation of the Guidelines: Offenses involving violations
under the above statutes are covered under Sec. 2D1.11 (Unlawfully
Distributing, Importing, Exporting, or Possessing a Listed Chemical).
This guideline uses a Chemical Quantity Table to determine the base
offense level. The guideline also has a cross reference to Sec. 2D1.1
(Unlawfully Manufacturing, Importing, Exporting, or Trafficking) for
cases involving the actual manufacture, or attempt to manufacture, a
controlled substance.
The Chemical Quantity Table was developed in two steps. First, the
amount of listed chemical needed to produce a quantity of controlled
substance in the Drug Quantity Table in Sec. 2D1.1 was determined. The
amount of listed chemical was based on 50% of theoretical yield.1
The 50% figure was used because, after much study, this figure was
determined to be a fair estimate of the amount of controlled substance
that typically could be produced in a clandestine laboratory.
---------------------------------------------------------------------------
\1\ Theoretical yield is the amount of a controlled substance
that could be produced in a perfect reaction. It is based on a
chemical equation/mathematical formula and does not occur in
reality.
---------------------------------------------------------------------------
Second, the offense level in Sec. 2D1.11 was adjusted downward by
eight levels from the level in the Drug Quantity Sec. 2D1.1. There were
several reasons for these adjustments. One, the listed chemical
offenses involved an intent to manufacture a controlled substance, not
the actual manufacture, or attempt to manufacture, a controlled
substance. For cases involving an actual or attempted manufacture of a
controlled substance, Sec. 2D1.11 contains a cross reference to
Sec. 2D1.1. Another reason for the reduction in offense level from the
offense levels in Sec. 2D1.1 was the fact that statutes covering listed
chemicals had maximum sentences of ten years' imprisonment, whereas
some of the controlled substance offenses had
[[Page 153]]
maximum sentences of life imprisonment. If the offense level was not
reduced in Sec. 2D1.11, almost all of the cases would have resulted in
sentences at or exceeding the statutory maximum. A third reason was
that it is more difficult to make an accurate determination of the
amount of finished product based on only one listed chemical as opposed
to several listed chemicals and/or lab equipment. By not reducing the
offense level, there would have been the possibility that the person
who had only one precursor would get a higher offense level than
someone who actually manufactured the controlled substance.
The proposed amendment raises the penalties for list I chemicals by
two levels. The top of the Chemical Quantity Table for list I chemicals
will now be at level 30. The offense level for list II chemicals
remains the same. With the new statutory maximum of 20 years, the
guidelines will now be able to better take into account aggravating
adjustments such as those for role in the offense. Additionally, the
increased statutory maximum will allow for higher sentences for cases
convicted under this statute that involve the actual manufacture of a
controlled substance.
Proposed Amendment: Section 2D1.11(d) is amended by deleting
subsections (d) (1)--(9) and inserting in lieu thereof the following:
``(d) Chemical Quality Table*
------------------------------------------------------------------------
Listed chemicals and quantity Base offense level
------------------------------------------------------------------------
(1) List I Chemicals.......................... Level 30
17.8 KG or more of Benzaldehyde;
20 KG or more of Benzyl Cyanide;
20 KG or more of Ephedrine;
200 G or more of Ergonovine;
400 G or more of Ergotamine;
20 KG or more of Ethylamine;
44 KG or more of Hydriodic Acid;
320 KG or more of Isoafrole;
4 KG or more of Methylamine;
1500 KG or more of N-Methylephedrine;
500 KG or more of N-Methylpseudoephedrine;
12.6 KG or more of Nitroethane;
200 KG or more of Norpseudoephedrine;
20 KG or more of Phenylacetic Acid;
200 KG or more of Phenylpropanolamine;
10 KG or more of Piperidine;
320 KG or more of Piperonal;
1.6 KG or more of Propionic Anhydride;
20 KG or more of Pseudoephedrine;
320 KG or more of Safrole;
400 KG or more of 3, 4-Methylenedioxyphenyl-
2-propanone;
(2) List I Chemicals.......................... Level 28.
At least 5.3 KG but less than 17.8 KG of
Benzaldehyde;
At least 6 KG but less than 20 KG of Benzyl
Cyanide;
At least 6 KG but less than 20 KG of
Ephedrine;
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 13.2 KG but less than 44 KG of
Hydriodic Acid;
At least 96 KG but less than 320 KG of
Isoafrole;
At least 1.2 KG but less than 4 KG 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 3.8 KG but less than 12.6 KG of
Nitroethane;
At least 60 KG but less than 200 KG of
Norpseudoephedrine;
At least 6 KG but less than 20 KG of
Phenylacetic Acid;
At least 60 KG but less than 200 KG of
Phenylpropanolamine;
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 6 KG but less than 20 KG of
Pseudoephedrine;
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
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 KG of Methyl Ethyl Ketone;
10 KG or more of Potassium Permanganate;
1300 KG or more of Toluene.
(3) List I Chemicals.......................... Level 26.
[[Page 154]]
At least 1.8 KG but less than 5.3 KG of
Benzaldehyde;
At least 2 KG but less than 6 KG of Benzyl
Cyanide;
At least 2 KG but less than 6 KG of
Ephedrine;
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 4.4 KG but less than 13.2 KG of
Hydriodic Acid;
At least 32 KG but less than 96 KG of
Isoafrole;
At least 400 G but less than 1.2 KG 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 1.3 KG but less than 3.8 KG of
Nitroethane;
At least 20 KG but less than 60 KG of
Norpseudoephedrine;
At least 2 KG but less than 6 KG of
Phenylacetic Acid;
At least 20 KG but less than 60 KG of
Phenylpropanolamine;
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 2 KG but less than 6 KG of
Pseudoephedrine;
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 322.5 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 1.2 KG but less than 1.8 KG of
Benzaldehyde;
At least 1.4 KG but less than 2 KG of
Benzyl Cyanide;
At least 1.4 KG but less than 2 KG of
Ephedrine;
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 3.08 KG but less than 4.4 KG of
Hydriodic Acid;
At least 22.4 KG but less than 32 KG of
Isoafrole;
At least 280 G but less than 400 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 879 G but less than 1.3 KG of
Nitroethane;
At least 14 KG but less than 20 KG of
Norpseudoephedrine;
At least 1.4 KG but less than 2 KG of
Phenylacetic Acid;
At least 14 KG but less than 20 KG of
Phenylpropanolamine;
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 1.4 KG but less than 2 KG of
Pseudoephedrine;
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 KG 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.
[[Page 155]]
At least 712 G but less than 1.2 KG of
Benzaldehyde;
At least 800 G but less than 1.4 KG of
Benzyl Cyanide;
At least 800 G but less than 1.4 KG of
Ephedrine;
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 1.76 KG but less than 3.08 KG of
Hydriodic Acid;
At least 12.8 KG but less than 22.4 KG of
Isoafrole;
At least 160 G but less than 280 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 503 G but less than 879 G of
Nitroethane;
At least 8 KG but less than 14 KG of
Norpseudoephedrine;
At least 800 G but less than 1.4 KG of
Phenylacetic Acid;
At least 8 KG but less than 14 KG of
Phenylpropanolamine;
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 800 G but less than 1.4 KG of
Pseudoephedrine;
At least 12.8 KG but less than 22.4 KG of
Safrole;
At least 16 KG but less than 28 KG 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 178 G but less than 712 G of
Benzaldehyde;
At least 200 G but less than 800 G of
Benzyl Cyanide;
At least 200 G but less than 800 G of
Ephedrine;
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 440 G but less than 1.76 KG of
Hydriodic Acid;
At least 3.2 KG but less than 12.8 KG of
Isoafrole;
At least 40 G but less than 160 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 126 G but less than 503 G of
Nitroethane;
At least 2 KG but less than 8 KG of
Norpseudoephedrine;
At least 200 G but less than 800 G of
Phenylacetic Acid;
At least 2 KG but less than 8 KG of
Phenylpropanolamine;
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 200 G but less than 800 G of
Pseudoephedrine;
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;
At least 52 KG but less than 91 KG of
Toluene.
(7) List I Chemicals.......................... Level 18.
[[Page 156]]
At least 142 G but less than 178 G of
Benzaldehyde;
At least 160 G but less than 200 G of
Benzyl Cyanide;
At least 160 G but less than 200 G of
Ephedrine;
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 352 G but less than 440 G of
Hydriodic Acid;
At least 2.56 KG but less than 3.2 KG of
Isoafrole;
At least 32 G but less than 40 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 100 G but less than 126 G of
Nitroethane;
At least 1.6 KG but less than 2 KG of
Norpseudoephedrine;
At least 160 G but less than 200 G of
Phenylacetic Acid;
At least 1.6 KG but less than 2 KG of
Phenylpropanolamine;
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 16 G of
Propionic Anhydride;
At least 160 G but less than 200 G of
Pseudoephedrine;
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.
At least 107 G but less than 142 G of
Benzaldehyde;
At least 120 G but less than 160 G of
Benzyl Cyanide;
At least 120 G but less than 160 G of
Ephedrine;
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 264 G but less than 352 G of
Hydriodic Acid;
At least 1.92 KG but less than 2.56 KG of
Isoafrole;
At least 24 G but less than 32 G of
Methylamine;
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 75 G but less than 100 G of
Nitroethane;
At least 1.2 KG but less than 1.6 KG of
Norpseudoephedrine;
At least 120 G but less than 160 G of
Phenylacetic Acid;
At least 1.2 KG but less than 1.6 KG of
Phenylpropanolamine;
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 120 G but less than 160 G of
Pseudoephedrine;
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.
[[Page 157]]
At least 2.7 KG but less than 3.6 KG of
Anthranilic Acid;
At least 80.25 G but less than 107 G of
Benzaldehyde;
At least 90 G but less than 120 G of Benzyl
Cyanide;
At least 90 G but less than 120 G of
Ephedrine;
At least 900 MG but less than 1.2 G of
Ergonovine;
At least 1.8 G but less than 2.4 G of
Ergotamine;
At least 90 G but less than 120 G of
Ethylamine;
At least 198 G but less than 264 G of
Hydriodic Acid;
At least 1.44 G but less than 1.92 KG of
Isoafrole;
At least 18 G but less than 24 G of
Methylamine;
At least 3.6 KG but less than 4.8 KG of N-
Acetylanthranilic 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 56.25 G but less than 75 G of
Nitroethane;
At least 900 G but less than 1.2 KG of
Norpseudoephedrine;
At least 90 G but less than 120 G of
Phenylacetic Acid;
At least 900 G but less than 1.2 KG of
Phenylpropanolamine;
At least 45 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 90 G but less than 120 G of
Pseudoephedrine;
At least 1.44 G 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 80.25 G of Benzaldehyde
Less than 90 G of Benzyl Cyanide;
Less than 90 G of Ephedrine;
Less than 900 MG of Ergonovine;
Less than 1.8 G of Ergotamine;
Less than 90 G of Ethylamine;
Less than 198 G of Hydriodic Acid;
Less than 1.44 G of Isoafrole;
Less than 18 G 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 56.25 G of Nitroethane;
Less than 900 G of Norpseudoephedrine;
Less than 90 G of Phenylacetic Acid;
Less than 900 G of Phenylpropanolamine;
Less than 45 G of Piperidine;
Less than 1.44 KG of Piperonal;
Less than 7.2 G of Propionic Anhydride;
Less than 90 G of Pseudoephedrine;
Less than 1.44 G 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.
------------------------------------------------------------------------
The Commentary to Sec. 2D1.11 captioned ``Application Notes'' is
amended in Note 4(a) by deleting ``three kilograms'' and inserting in
lieu thereof ``300 grams''; by deleting ``24'' each time it appears and
inserting in lieu thereof ``26''; and by deleting ``14'' and inserting
in lieu thereof ``16''.
Section 2L1.1--Alien Smuggling
2. Synopsis of Proposed Amendment: This amendment implements
section 203 of the Illegal Immigration Reform and Immigrant
Responsibility Act of 1996. Section 203 directs the Commission to amend
the guidelines for offenses related to smuggling, transporting, or
harboring illegal aliens.
[[Page 158]]
The legislation directs the Commission to:
``(A) increase the base offense level for such offenses at least 3
offense levels above the applicable level in effect on the date of the
enactment of this Act;
(B) review the sentencing enhancement for the number of aliens
involved (U.S.S.G. 2L1.1(b)(2)), and increase the sentencing
enhancement by at least 50 percent above the applicable enhancement in
effect on the date of the enactment of this Act;
(C) impose an appropriate sentencing enhancement upon an offender
with 1 prior felony conviction arising out of a separate and prior
prosecution for an offense that involved the same or similar underlying
conduct as the current offense, to be applied in addition to any
sentencing enhancement that would otherwise apply pursuant to the
calculation of the defendant's criminal history category; * * * [and an
additional enhancement for 2 or more priors];
(E) impose an appropriate sentencing enhancement on a defendant
who, in the course of committing an offense described in this
subsection (i) murders or otherwise causes death, bodily injury, or
serious bodily injury to a defendant; (ii) uses or brandishes a firearm
or other dangerous weapon; or (iii) engages in conduct that consciously
or recklessly places another in serious danger of death or serious
bodily injury;
(F) consider whether a downward adjustment is appropriate if the
offense is a first offense and involves the smuggling only of the
alien's spouse or child * * * ''
The amendment provides for a higher base offense level as required
by the legislation. In addition, the amendment provides for new
specific offense characteristics outlined in the legislation and
adjusts the current specific offense characteristics as directed by the
legislation. Finally, the amendment provides for clarifying commentary.
Proposed Amendment: Section 2L1.1(a)(1) is amended by deleting
``20'' and inserting in lieu thereof ``[23-25]''.
Section 2L1.1(a)(2) is amended by deleting ``9'' and inserting in
lieu thereof ``[12-14]''.
Section 2L1.1(b) is amended by deleting:
``(1) If the defendant committed the offense other than for profit
and the base offense level is determined under subsection (a)(2),
decrease by 3 levels.
(2) If the offense involved the smuggling, transporting, or
harboring of six or more unlawful aliens, increase as follows:
------------------------------------------------------------------------
Number of unlawful aliens smuggled,
transported, or harbored Increase in level
------------------------------------------------------------------------
(A) 6-24................................. Add 2.
(B) 25-99................................ Add 4.
(C) 100 or more.......................... Add 6.
------------------------------------------------------------------------
(3) If the defendant is an unlawful alien who has been deported
(voluntarily or involuntarily) on one or more occasions prior to the
instant offense, and the offense level determined above is less than
level 8, increase to level 8.''
and inserting in lieu thereof:
``(1) If the offense involves the smuggling, transporting, or
harboring only of the defendant's spouse or child, decrease by [2-3]
levels.
(2) If the offense involved the smuggling, transporting, or
harboring of three or more unlawful aliens, increase as follows:
------------------------------------------------------------------------
Number of unlawful aliens smuggled,
transported, or harbored Increase in level
------------------------------------------------------------------------
(A) 3-5.................................. Add 1.
(B) 6-11................................. Add 3.
(C) 12-24................................ Add 5.
(D) 25-99................................ Add 7.
(E) 100 or more.......................... Add 9.
------------------------------------------------------------------------
(3) [Option 1: If the defendant committed the instant offense
subsequent to sustaining (A) one conviction for an immigration and
naturalization offense, increase by 2 levels; or (B) two convictions
for immigration and naturalization offenses each arising out of
separate prosecutions, increase by 4 levels.]
[Option 2: If the defendant at the time of sentencing had been
previously convicted of (A) one immigration and naturalization offense
arising out of a separate and prior prosecution, increase by 2 levels;
or (B) two immigration and naturalization offenses each arising out of
separate prosecutions, increase by 4 levels.]
(4) (A) If a firearm was discharged, increase by 6 levels, but if
the resulting offense level is less than level [22-24], increase to
level [22-24];
(B) if a dangerous weapon (including a firearm) was brandished or
otherwise used, increase by 4 levels, but if the resulting offense
level is less than level [20-22], increase to level [20-22];
(C) if a dangerous weapon (including a firearm) was possessed,
increase by 2 levels, but if the resulting offense level is less than
level [18-20], increase to level [18-20].
[Option 1: (D) if the offense involved recklessly creating a
substantial risk of death or serious bodily injury to another person,
increase by 2 levels, but if the resulting offense level is less than
level [18-20], increase to level [18-20]].
[Option 2: (5) If the offense involved recklessly creating a
substantial risk of death or serious bodily injury to another person,
increase by 2 levels, but if the resulting offense level is less than
level [18-20], increase to level [18-20].
(6) If any person died or sustained bodily injury as a result of
the offense, increase the offense level accordingly:
(1) Bodily Injury....................... Add 2 levels.
(2) Serious Bodily Injury............... Add 4 levels.
(3) Permanent or Life-Threatening Bodily Add 6 levels.
Injury.
(4) Death............................... Add 8 levels.
(c) Cross Reference.
If any person was killed under circumstances that would
constitute murder under 18 U.S.C. Sec. 1111 had such killing taken
place within the special maritime and territorial jurisdiction of
the United States, apply the appropriate murder guideline from
Chapter two, Part A, Subpart 1.''
The Commentary to Sec. 2L1.1 captioned ``Application Notes'' is
amended in Note 5 by deleting ``dangerous or inhumane treatment, death
or bodily injury, possession of a dangerous weapon, or''.
The Commentary to Sec. 2L1.1 captioned ``Application Notes is
amended by inserting the following additional notes:
``[7. Under subsections (b)(4)(A) and (b)(4)(B), the defendant is
accountable if (A) the defendant discharges, brandishes, or otherwise
uses a firearm, or (B) another person discharges, brandishes, or
otherwise uses a firearm and the defendant is aware of the presence of
the firearm. Under subsection (b)(4)(C), the defendant is accountable
if the defendant or another person possesses a dangerous weapon during
the offense.]
8. Prior felony conviction(s) resulting in an adjustment under
subsection (b)(3) are also counted for purposes of determining criminal
history points pursuant to Chapter Four, Part A (Criminal History).
9. Reckless conduct triggering the adjustment from subsection(b)(5)
can vary widely. Such conduct may include, but is not limited to,
transporting persons in the trunk or engine compartment of a motor
vehicle, carrying substantially more passengers than the rated capacity
of a motor vehicle or vessel, or harboring persons in a crowded,
dangerous, or inhumane condition. If the reckless conduct triggering
the adjustment in subsection (b)(4)(C) includes only conduct related to
fleeing from a law enforcement officer, do not apply an adjustment from
Sec. 3C1.2 (Reckless Endangerment During Flight). [Do not apply the
adjustment in subsection (b)(4)(D) if the reckless
[[Page 159]]
conduct that created a substantial risk of death or serious bodily
injury includes only conduct related to weapon possession or use.]
10. An `immigration and naturalization offense'' means any offense
covered by Chapter 2, Part L.
11. For purposes of this section, the term ``child'' is defined at
section 101(b)(1) of the Immigration and Nationality Act (8 U.S.C.
Sec. 1101(b)(1)) and ``spouse'' is defined at section 101(a)(35) of the
Immigration and Nationality Act (8 U.S.C. Sec. 1101(a)(35)).''
The Commentary to Sec. 2L1.1 captioned ``Background'' is amended by
deleting the following:
``A specific offense characteristic provides a reduction if the
defendant did not commit the offense for profit. The offense level
increases with the number of unlawful aliens smuggled, transported, or
harbored.''
The Commentary to Sec. 2L1.1 captioned ``Background'' is amended by
inserting the following after ``In large scale'':
``smuggling or harboring''.
Section 2L2.1 and 2L2.2--Immigration Document Fraud
3. Synopsis of Proposed Amendment: This amendment implements
section 211 of the Illegal Immigration Reform and Immigrant
Responsibility act of 1996. Section 211 directs the Commission to amend
the guidelines for offenses related to the fraudulent use of government
issued documents. The Commission is directed to:
``(A) increase the base offense level for such offenses at least 2
offense levels above the level in effect on the date of the enactment
of this Act;
(B) review the sentencing enhancement for the number of documents
or passports involved (U.S.S.G. 2L2.1(b)(2)), and increase the upward
enhancement by at least 50 percent above the applicable enhancement in
effect on the date of the enactment of this Act;
(C) impose an appropriate sentencing enhancement upon an offender
with 1 prior felony conviction arising out of a separate and prior
prosecution for an offense that involved the same or similar underlying
conduct as the current offense, to be applied in addition to any
sentencing enhancement that would otherwise apply pursuant to the
calculation of the defendant's criminal history category; . . . [and an
additional enhancement for 2 or more priors];''
The amendment provides for a higher base offense level as required
by the legislation. In addition, the amendment provides for a new
specific offense characteristic for defendants who have one or more
prior convictions for the same or similar conduct--as outlined in the
legislation--and adjusts the current specific offense characteristics
as directed by the legislation and consistent with other guidelines.
Finally, the amendment provides for clarifying commentary.
Proposed Amendment: Section 2L2.1 is amended by deleting ``9'' and
inserting in lieu thereof ``[11-13]''.
Section 2L2.1(b) is amended by deleting:
``(1) If the defendant committed the offense other than for profit,
decrease by 3 levels.
(2) If the offense involved six or more documents or passports,
increase as follows:
------------------------------------------------------------------------
Number of documents/passports Increase in level
------------------------------------------------------------------------
(A) 6-24.................................. Add 2.
(B) 25-99................................. Add 4.
(C) 100 or more........................... Add 6.''
------------------------------------------------------------------------
and insert in lieu thereof:
``(1) [Option 1: If the defendant committed the offense other than
for profit and had not been convicted of an immigration and
naturalization offense prior to the commission of the instant offense,
decrease by 3 levels.]
[Option 2: If the offense involves documents only related to the
defendant's spouse or child, decrease by [2-3] levels.]
(2) If the offense involved three or more documents or passports,
increase as follows:
------------------------------------------------------------------------
Number of documents/passports Increase in level
------------------------------------------------------------------------
(A) 3-5................................... Add 1.
(B) 6-11.................................. Add 3.
(C) 12-24................................. Add 5.
(D) 25-99................................. Add 7.
(E) 100 or more........................... Add 9.''
------------------------------------------------------------------------
Section 2L2.1(b) is amended by inserting the following additional
subdivision:
``(3) [Option 1: If the defendant committed the instant offense
subsequent to sustaining (A) one conviction for an immigration and
naturalization offense, increase by 2 levels; or (B) two convictions
for immigration and naturalization offenses each arising out of
separate prosecutions, increase by 4 levels.]
[Option 2: If the defendant at the time of sentencing had been
previously convicted of (A) one immigration and naturalization offense
arising out of a separate and prior prosecution, increase by 2 levels;
or (B) two immigration and naturalization offenses each arising out of
separate prosecutions, increase by 4 levels.]''
The Commentary to Sec. 2L2.1 captioned ``Application Notes'' is
amended by inserting the following additional notes:
``4. Prior felony conviction(s) resulting in an adjustment under
subsection (b)(4) are also counted for purposes of determining criminal
history points pursuant to Chapter Four, Part A (Criminal History).
5. An ``immigration and naturalization offense'' means any offense
covered by Chapter 2, Part L.
6. For purposes of this section, the term ``child'' is defined at
section 101(b)(1) of the Immigration and Nationality Act (8 U.S.C.
Sec. 1101(b)(1)) and ``spouse'' is defined at section 101(a)(35) of the
Immigration and Nationality Act (8 U.S.C. Sec. 1101(a)(35)).''
Section 2L2.2(a) is amended by deleting ``6'' and inserting in lieu
thereof ``[8-10]''.
Section 2L2.2(b) is amended by deleting ``Characteristic'' and
inserting in lieu thereof ``Characteristics''; and by inserting the
following new subdivision:
``(2) [Option 1: If the defendant committed the instant offense
subsequent to sustaining (A) one conviction for an immigration and
naturalization offense, increase by 2 levels; or (B) two convictions
for immigration and naturalization offenses each arising out of
separate prosecutions, increase by 4 levels.]
[Option 2: If the defendant at the time of sentencing had been
previously convicted of (A) one immigration and naturalization offense
arising out of a separate and prior prosecution, increase by 2 levels;
or (B) two immigration and naturalization offenses each arising out of
separate prosecutions, increase by 4 levels.]''
The Commentary to Sec. 2L2.2 captioned ``Application Note'' is
amended by deleting and inserting in lieu thereof ``Notes''; and by
inserting the following additional notes:
``2. Prior felony conviction(s) resulting in an adjustment under
subsection (b)(4) are also counted for purposes of determining criminal
history points pursuant to Chapter Four, Part A (Criminal History).
3. An `immigration and naturalization offense' means any offense
covered by Chapter 2, Part L.''.
Section 2H4.1--Involuntary Servitude
4. Synopsis of Proposed Amendment: This amendment implements
section 218 of the Illegal Immigration Reform and Immigrant
Responsibility act of 1996. Section 218 directs the
[[Page 160]]
Commission to review the guideline for peonage, involuntary servitude
and slave trade offenses and amend the guideline, as necessary, to:
``(A) reduce or eliminate any unwarranted disparity * * * between
the sentences for peonage, involuntary servitude, and slave trade
offenses, and the sentences for kidnapping offenses and alien
smuggling;
(B) ensure that the applicable guidelines for defendants convicted
of peonage, involuntary servitude, and slave trade offenses are
sufficiently stringent to deter such offenses and adequately reflect
the heinous nature of such offenses; and
(C) ensure that the guidelines reflect the general appropriateness
of enhanced sentences for defendants whose peonage, involuntary
servitude, or slave trade offenses involve, (i) a large number of
victims; (ii) the use or threatened use of a dangerous weapon; or (iii)
a prolonged period of peonage or involuntary servitude.''
The amendment generally tracks the structure of the kidnapping
guideline.
Section 2H4.1 is amended by deleting the section in its entirety
and replacing in lieu thereof the following:
``Sec. 2H4.1. Peonage, Involuntary Servitude, and Slave Trade
(a) Base Offense Level (Apply the greater):
(1) [18-24]
(b) Specific Offense Characteristics
(1) (A) If any victim sustained permanent or life-threatening
bodily injury, increase by [4-6] levels; (B) if any victim sustained
serious bodily injury, increase by [2-4] levels.
(2) If a dangerous weapon was used, increase by [2-4] levels.
(3) If any victim was held in a condition of servitude or peonage
for (A) more than one year, increase by [3-5] levels; (B) between 180
days and one year, increase by [2-4] levels; (C) more than thirty days
but less than 180 days, increase by [1-3] level.
(4) If any other offense was committed during the commission of or
in connection with the servitude, peonage, or slave trade offense,
increase to the greater of:
(A) 2 plus the offense level as determined above, or
(B) 2 plus the offense level from the offense guideline applicable
to that other offense, but in no event greater than level 43.
Commentary
Statutory Provisions: 18 U.S.C. Secs. 241, 1581-1588.
Application Notes:
1. Under subsection (b)(4), `any other offense * * * committed
during the commission of or in connection with the servitude, peonage,
or slave trade offense' means any conduct that constitutes an offense
under federal, state, or local law (other than an offense that is
itself covered under Chapter Two, Part H, Subpart 4). See the
Commentary in Sec. 2H1.1 for an explanation of how to treat a count of
conviction which sets forth more than one ``other'' offense.
2. Definitions of `serious bodily injury' and `permanent or life-
threatening bodily injury' are found in the Commentary to Sec. 1B1.1
(Application Instructions).
3. `A dangerous weapon was used' means that a firearm was
discharged, or a `firearm' or `dangerous weapon' was `otherwise used''
(as defined in the Commentary to Sec. 1B1.1 (Application
Instructions)).
4. If the offense involved the holding of more than 10 victims in a
condition of involuntary servitude or peonage, an upward departure may
be warranted.
Background: This section covers statutes that prohibit peonage,
involuntary servitude, and slave trade. For purposes of deterrence and
just punishment, the minimum base offense level is [18-24].''.
Issue for Comment: Section 218 of the Illegal Immigration Reform
and Immigrant Responsibility Act of 1996 directs the Commission to
ensure that the guidelines reflect the general appropriateness of
enhanced sentences for defendants whose peonage, involuntary servitude,
or slave trade offenses involve a large number of victims. The
Commission seeks comment on whether the current enhancements provided
under the guidelines' multiple count provisions are sufficient to
ensure appropriately enhanced sentences when peonage, involuntary
servitude, or slave trade offenses involve a large number of victims or
whether a new specific offense characteristic for a large number of
victims is needed.
Non-Emergency Amendments
Section 3A1.4 Terrorism
5. Synopsis of Proposed Amendment: This amendment proposes to make
permanent the emergency amendment promulgated by the Commission to
implement section 730 of the Antiterrorism and Effective Death Penalty
Act of 1996 (Pub. L. 104-132; 110 Stat. 1214). That section gave the
Commission emergency authority, under section 21(a) of the Sentencing
Act of 1987, to amend the sentencing guidelines so that the Chapter 3
adjustment in Sec. 3A1.4, relating to international terrorism, applies
more broadly to Federal crimes of terrorism, as defined in section
2332b(g) of title 18, United States Code. By vote of the Commission,
the emergency amendment became effective November 1, 1996. However,
under the terms of section 21(a) of the Sentencing Act of 1987, the
emergency amendment will no longer be in effect after submission of the
next report to Congress under 28 U.S.C. Sec. 994(p) unless in the next
report, the Commission submits (and Congress does not disapprove) an
amendment to make it permanent.
Proposed Amendment: Section 3A1.4 is amended in the title by
deleting ``International''.
Section 3A1.4(a) is amended by deleting ``international'' and
inserting in lieu thereof ``a federal crime of''.
The Commentary to Sec. 3A1.4 captioned ``Application Notes'' is
amended in Note 1 in the first sentence by deleting ``international''
and inserting in lieu thereof ``a federal crime of''; and in the second
sentence by deleting ``International'' and inserting in lieu thereof
``Federal crime of''; and by deleting ``2331'' and inserting in lieu
thereof ``2332b(g)''.
Section 1B1.1 Application Instructions
6. Synopsis of Proposed Amendment: This is a two-part amendment to
Sec. 1B1.1 (Application Instructions). First, the amendment corrects a
technical error in Sec. 1B1.1(b). Second, the amendment expands the
definition of ``offense'' to specify what is meant by the term
``instant offense.'' This term is used to distinguish the current or
``instant'' offense from prior criminal offenses. Currently, this term
is not defined and has repeatedly raised questions about its
application. This amendment defines this term to mean the offense of
conviction and relevant conduct, unless a different meaning is
expressly stated or is otherwise clear from the context.
Two conforming amendments are necessary. The first conforming
amendment adds commentary defining the term ``instant offense'' in
relation to Sec. 3C1.1. Section 3C1.1 requires more extensive
commentary regarding this term because of the variety of situations
covered by this guideline. The second conforming amendment makes
explicit that, with respect to Secs. 4B1.1 and 4B1.2, the ``instant
offense'' is the offense of conviction. Currently, Sec. 4B1.1 expressly
states this in subdivision (2), but not in subdivision (1).
Proposed Amendment: Section 1B1.1(b) is amended by inserting ``,
cross references, and special instructions'' immediately following
``characteristics''.
[[Page 161]]
The Commentary to Sec. 1B1.1 captioned ``Application Notes'' is
amended in Note 1(l) by inserting as the second sentence ``The term
`instant' is used in connection with `offense' when, in the context, it
is necessary to distinguish the current or `instant' offense from prior
criminal offenses.''.
The Commentary to Sec. 3C1.1 captioned ``Application Notes'' is
amended by inserting the following additional note at the end:
``8. `During the investigation or prosecution of the instant
offense' means during, and in relation to, the investigation or
prosecution of the federal offense of which the defendant is convicted
and any offense or related civil violation, committed by the defendant
or another person, that was part of the same investigation or
prosecution, whether or not such offense resulted in conviction or such
violation resulted in the imposition of civil penalties. It is not
necessary that the obstructive conduct pertain to the particular count
of which the defendant was convicted.
`During the sentencing of the instant offense' means during, and in
relation to, the sentencing phase of the process, including the
preparation of the presentence report.''.
Section 4B1.1 is amended by deleting ``of the instant offense'' and
inserting in lieu thereof ``the defendant committed the instant offense
of conviction''.
Section 4B1.2(3) is amended by inserting ``of conviction''
immediately before ``subsequent''.
Section 1B1.2 Applicable Guidelines
7. Synopsis of Proposed Amendment: This amendment amends Sec. 1B1.2
(Applicable Guidelines) and the Statutory Index to clarify that, except
as otherwise provided in the Introduction to the Statutory Index, the
Statutory Index will specify the Chapter Two offense guideline most
applicable to an offense of conviction.
Proposed Amendment: The Commentary to Sec. 1B1.2 captioned
``Application Notes'' is amended in Note 1 by deleting ``The Statutory
Index (Appendix A) provides a listing to assist in this
determination.'' and inserting in lieu thereof ``Except as otherwise
provided in the Introduction to the Statutory Index, the Statutory
Index specifies the offense guideline section(s) in Chapter Two most
applicable to the offense of conviction.''; by inserting ``in the
Statutory Index'' immediately following ``referenced''; by inserting
``more than one offense guideline section may be referenced in the
Statutory Index for that particular statute and'' immediately following
``offense guidelines,''; by inserting ``of the referenced'' immediately
following ``determine which''; and by deleting ``section'' immediately
before ``applies'' and inserting in lieu thereof ``sections''.
The Introduction to Appendix A is amended in the first paragraph by
inserting ``Therefore, as a general rule, when determining the
guideline section from Chapter Two most applicable to the offense of
conviction for purposes of Sec. 1B1.1, use the guideline referenced for
that statute in this index.'' after the first sentence; deleting ``If,
in an atypical case, the guideline section indicated for the statute of
conviction is inappropriate because of the particular conduct involved,
use the guideline section most applicable to the nature of the offense
conduct charged in the count of which the defendant was convicted. (See
Sec. 1B1.2.)''; and by inserting ``referenced'' immediately before
``for the substantive''.
The Introduction to Appendix A (Statutory Index) is amended by
moving the second paragraph to the end of the first paragraph.
The Introduction to Appendix A (Statutory Index) is amended by
deleting the second (formerly the third) paragraph as follows:
``For those offenses not listed in this index, the most analogous
guideline is to be applied. (See Sec. 2X5.1.)''.,
And inserting in lieu thereof:
``However, there are exceptions to the general rule set forth
above. If the statute of conviction (1) is not listed in this index; or
(2) is listed in this index but the guideline section referenced for
that statute is no longer appropriate to cover the offense conduct
charged because of changes in law not yet reflected in this index, use
the most analogous guideline. (See Sec. 2X5.1.)''.
Section 1B1.3 Relevant Conduct
8. Synopsis of Proposed Amendment: This amendment incorporates into
Sec. 1B1.3 (Relevant Conduct) the holding in United States v. Hill, 79
F.3d 1477 (6th Cir. 1996), that when two controlled substance
transactions are conducted more than one year apart, the fact that the
same controlled substance was involved in both transactions is
insufficient, without more, to demonstrate that the transactions were
part of the ``same course of conduct'' or ``common scheme or plan''.
Proposed Amendment: The Commentary to Sec. 1B1.3 captioned
``Application Notes'' is amended in Note 9(B) by deleting ``For
example, where'' and inserting in lieu thereof ``If''; and by inserting
after the fourth sentence ``For example, if two controlled substance
transactions are conducted more than one year apart, the fact that the
transactions involved the same controlled substance, without more
information, is insufficient to show that they are part of the same
course of conduct or common scheme or plan.'' after the fourth
sentence.
9. Synopsis of Proposed Amendment: This amendment addresses the
issue of whether acquitted conduct may be considered for sentencing
purposes. Option 1 of this amendment excludes the use of acquitted
conduct as a basis for determining the guideline range. Option 1 has
two suboptions, either or both of which could be added. Option 1(A)
adds the bracketed language, in the guideline and application note,
providing that acquitted conduct shall be considered if established
independently of evidence admitted at trial. Option 1(B) invites the
use of acquitted conduct as a basis for upward departure.
Option 2 is derived from a ``compromise'' proposal suggested
several years ago by the Commission's Practitioners' Advisory Group. It
excludes acquitted conduct from consideration in determining the
guideline range unless such conduct is established by the ``clear and
convincing'' standard, rather than the less exacting ``preponderance of
the evidence'' standard generally applicable to the determination of
relevant conduct.
Option 3 expressly provides what currently is arguably implicit in
the Relevant Conduct guideline: that acquitted conduct should be
evaluated using the same standards as any other form of unconvicted
conduct and included in determining the guideline range if those
standards are met. However, the amended commentary invites a
discretionary downward departure to exclude such conduct if the use of
that conduct to enhance the sentence raises substantial concerns of
fundamental fairness. It also states what should be the obvious
appropriate floor for such a downward departure.
Proposed Amendment: [Option 1A: Section 1B1.3 is amended by
inserting the following new subsection:
``(c) Acquitted conduct, i.e., conduct necessarily rejected by the
trier of fact in finding the defendant not guilty of a charge, shall
not be considered relevant conduct under this section unless it is
independently established by evidence not admitted at trial.''.
The Commentary to Sec. 1B1.3 captioned ``Application Notes'' is
amended by renumbering Note 10 as Note 11 and by inserting the
following as new Note 10:
``10. Subsection (c) provides that conduct (i.e., acts and
omissions) of
[[Page 162]]
which the defendant has been acquitted after trial ordinarily shall not
be considered in determining the guideline range. In applying this
provision, the court should be mindful that evidence not admissible at
trial properly may be considered at sentencing and that application of
the guidelines often may involve determinations somewhat different from
those necessary for conviction of an offense. For example, the factors
necessary to establish the enhancement in Sec. 2D1.1(b)(1) for
possession of a weapon in a controlled substance offense are different
from the elements necessary to find a defendant guilty of using or
carrying a firearm in connection with that offense, in violation of 18
U.S.C. Sec. 924(c); therefore, an acquittal of that offense would not
necessarily foreclose the application of the weapon enhancement.
Moreover, even if the defendant is acquitted of a charge under 18
U.S.C. Sec. 924(c), the weapon enhancement in Sec. 2D1.1(b)(1) may
apply if, for example, another person possessed a weapon as part of
jointly undertaken criminal activity with the defendant and the
possession of the weapon was reasonably foreseeable.''.]
[Option 1B: Section 1B1.3 is amended by inserting the following new
subsection:
``(c) Acquitted conduct, i.e., conduct necessarily rejected by the
trier of fact in finding the defendant not guilty of a charge, shall
not be considered relevant conduct under this section.''.
The Commentary to Sec. 1B1.3 captioned ``Application Notes'' is
amended by renumbering Note 10 as Note 11 and by inserting the
following as new Note 10:
``10. Subsection (c) provides that conduct (i.e., acts and
omissions) of which the defendant has been acquitted after trial shall
not be considered in determining the guideline range. In applying this
provision, the court should be mindful that application of the
guidelines often may involve determinations somewhat different from
those necessary for conviction of an offense. For example, the factors
necessary to establish the enhancement in Sec. 2D1.1(b)(1) for
possession of a weapon in a controlled substance offense are different
from the elements necessary to find a defendant guilty of using or
carrying a firearm in connection with that offense, in violation of 18
U.S.C. Sec. 924(c); therefore, an acquittal of that offense would not
necessarily foreclose the application of the weapon enhancement.
Moreover, even if the defendant is acquitted of a charge under 18
U.S.C. Sec. 924(c), the weapon enhancement in Sec. 2D1.1(b)(1) may
apply if, for example, another person possessed a weapon as part of
jointly undertaken criminal activity with the defendant and the
possession of the weapon was reasonably foreseeable. Although acquitted
conduct may not be used in determining the guideline range, such
conduct may provide a basis for an upward departure.''.]
[Option 2
Section 1B1.3 is amended by inserting the following new subsection:
``(c) Acquitted conduct, i.e., conduct necessarily rejected by the
trier of fact in finding the defendant not guilty of a charge, shall
not be considered relevant conduct under this section unless such
conduct is established by clear and convincing evidence.''.
The Commentary to Sec. 1B1.3 captioned ``Application Notes'' is
amended by renumbering Note 10 as Note 11 and by inserting the
following as new Note 10:
``10. Subsection (c) provides that conduct (i.e., acts and
omissions) of which the defendant has been acquitted after trial shall
not be considered in determining the guideline range unless,
considering the evidence admitted at trial and any additional evidence
presented at sentencing, such conduct is established by clear and
convincing proof.
In determining whether conduct necessarily was rejected by an
acquittal, the court should be mindful that application of the
guidelines often may involve determinations different from those
necessary for conviction of an offense. For example, the factors
necessary to establish the enhancement in Sec. 2D1.1(b)(1) for
possession of a weapon in a controlled substance offense are different
from the elements necessary to find a defendant guilty of using or
carrying a firearm in connection with that offense, in violation of 18
U.S.C. Sec. 924(c); therefore, an acquittal of that offense would not
necessarily foreclose the application of the weapon enhancement.
Moreover, even if the defendant is acquitted of a charge under 18
U.S.C. Sec. 924(c), the weapon enhancement in Sec. 2D1.1(b)(1) may
apply if, for example, another person possessed a weapon as part of
jointly undertaken criminal activity with the defendant and the
possession of the weapon was reasonably foreseeable.''.]
[Option 3
The Commentary to Sec. 1B1.3 captioned ``Application Notes'' is
amended by renumbering Note 10 as Note 11 and by inserting the
following note as new Note 10:
``10. Acquitted conduct, i.e., conduct necessarily rejected by the
trier of fact in finding the defendant not guilty of a charge, shall be
considered under this section if it otherwise qualifies as relevant
conduct within the meaning of this section. However, if the court
determines that, considering the totality of circumstances, the use of
such conduct as a sentencing enhancement raises substantial concerns of
fundamental fairness, a downward departure may be considered. Such a
downward departure should not result, in the absence of other
appropriate factors, in a sentence lower than the minimum sentence in
the guideline range that would apply if such conduct were not
considered.''.]
Section 1B1.5 Interpretation of References to Other Offense Guidelines
10. Synopsis of Proposed Amendment: This amendment simplifies the
operation of Chapter Two cross references in two ways: (1) by amending
Sec. 1B1.5 (Interpretation of References to Other Offense Guidelines)
to provide that only Chapter Two offense levels (not Chapter Two
offense levels and Chapter Three adjustments) must be considered in
determining whether a cross reference will result in a greater offense
level than that provided in the Chapter Two guideline that contains the
cross reference provision; and, (2) by amending Sec. 2X1.1 to replace
the three-level reduction for certain offenses involving attempts,
solicitation and, conspiracy with a downward departure provision (see
accompanying memorandum). This amendment also corrects a technical
error in Application Note 1 of Sec. 1B1.5.
(1) Amendment of Sec. 1B1.5--Approximately 32 guideline subsections
involving numerous cross references contain a requirement that the
cross reference applies only if it results in the greater offense
level. Currently, to determine the ``greater offense level,'' a
comparison is required taking into account both the Chapter Two offense
levels and any applicable Chapter Three adjustments. The inclusion of
the Chapter Three adjustments in the comparison significantly increases
the complexity of this task.
This amendment simplifies the guidelines by restricting the
comparison to the Chapter Two offense levels, unless a different
procedure is expressly specified. The amendment, together with existing
guideline language, provides a different procedure with respect to
Secs. 2C1.1, 2C1.7, 2E1.1, 2E1.2 because they are the only four offense
guidelines in which the inclusion of Chapter Three adjustments in the
comparison is likely to make a difference. Although it is possible that
there may be a difference under some
[[Page 163]]
other guideline section under some unusual circumstance, such
differences will occur extremely rarely, if at all.
Sections 2E1.1 and 2E1.2 currently expressly provide for a
comparison (of the offense level applicable to the underlying activity
and the alternative base offense level) including Chapter Three
adjustments. There may be cases, for example, in which abuse of a
position of trust is accounted for in the offense level applicable to
the underlying racketeering activity. If Chapter Three adjustments
(including Sec. 3B1.3 (Abuse of Position of Trust or Use of Special
Skill)) are not included in the comparison, then abuse of a position of
trust would be taken into account only in the offense level applicable
to the underlying activity and not with respect to the alternative base
offense level.
Likewise, Secs. 2C1.1 and 2C1.7 currently do not expressly provide
for a comparison including Chapter Three adjustments, although under
current Sec. 1B1.5 such a comparison is called for. Cases under
Secs. 2C1.1 and 2C1.7 would have a different result using a Chapter Two
comparison versus a Chapter Two and Three comparison only where the
Chapter Two offense level from Sec. 2C1.1 or 2C1.7 was the same as that
for the underlying offense, and a 2-level adjustment from Sec. 3B1.3
would apply to the underlying offense (an adjustment from Sec. 3B1.3
does not apply to an offense level from Sec. 2C1.1 or Sec. 2C1.7). In
such case, a 2-level difference would result: that conduct would
already be taken into account under Secs. 2C1.1 and 2C1.7 but would not
be taken into account in the comparison of the offense level from the
underlying offense because the Chapter Three adjustment would not be
included. However, such cases should occur relatively infrequently. In
FY 1995, there were 220 cases sentenced under Sec. 2C1.1 altogether and
26 cases sentenced under 2C1.7.
To address the cases described above, this amendment requires, as
an express exception to the general rule provided for in the amendment,
that the comparisons made in Secs. 2C1.1, 2C1.7, 2E1.1, and 2E1.2
include Chapter Three adjustments. Application notes are added to
Secs. 2C1.1 and 2C1.7 expressly requiring a Chapter Three comparison
(and the application notes in Secs. 2E1.1 and 2E1.2 that require the
same are retained), without any substantive change.
(2) Amendment of Sec. 2X1.1--This amendment also proposes deletion
of the three-level reduction under Sec. 2X1.1(b) (1), (2), or (3), for
attempts, conspiracies, or solicitations not covered by a specific
offense guideline, in which the defendant has not completed all the
acts necessary for the substantive offense and was not ``about to
complete all such acts but for the apprehension or interruption by some
similar event beyond the defendant's control.'' In place of the three-
level reduction, this amendment provides for the possibility of a
downward departure under such circumstances. The arguments for
eliminating the provisions are: (1) A large number of cases that go to
Sec. 2X1.1 theoretically are required to be considered for the
reduction, but only a small number qualify for it; (2) on its face the
provision should be expected to apply rarely; and (3) the concerns
manifested in the provisions can be dealt with adequately through
departure. On the other hand, if the three-level reduction is replaced
by a departure provision, in the rare case when the requirements for a
reduction under subsection (b) are met, the defendant will not have a
right to the reduction but must rely on the sentencing judge's exercise
of the discretion to depart.
In FY 1995 there were 1,568 cases in which the highest guideline
applied was Sec. 2X1.1(a). Of these, 33 (or 2%) received the three-
level reduction under subsection (b) (17 for attempt, 13 for
conspiracy, and 3 for solicitation). The affirmance rate of appeals of
these findings has been very high (90.5% in FY 1995, 85% in FY 1994,
and 94.4% in FY 1993).
Proposed Amendment: Section Sec. 1B1.5(d) is amended by deleting
``final offense level (i.e., the greater offense level taking into
account the Chapter Two offense level and any applicable Chapter Three
adjustments)'' and inserting in lieu thereof ``Chapter Two offense
level, except as otherwise expressly provided''.
The Commentary to Sec. 1B1.5 captioned ``Application Notes'' is
amended in Note 1 by deleting ``, (2),'' and inserting in lieu thereof
``and'' immediately after ``Sec. 2D1.2(a)(1)'' and by deleting ``and
Sec. 2H1.1(a)(1),''.
The Commentary to Sec. 1B1.5 captioned ``Application Notes'' is
amended in Note 2 by deleting in the second sentence ``greater final'';
by deleting ``(i.e., the greater offense level''; by deleting ``both''
and inserting in lieu thereof ``only''; and by deleting ``and any
applicable Chapter Three adjustments).''
The Commentary to Sec. 1B1.5 captioned ``Application Notes'' is
amended in Note 2 by deleting the second and third sentences and
inserting the following in lieu thereof:
``, unless the offense guideline expressly provides for
consideration of both the Chapter Two offense level and applicable
Chapter Three adjustments. For situations in which a comparison
involving both Chapters Two and Three is necessary, see the Commentary
to Secs. 2C1.1 (Offering, Giving, Soliciting, or Receiving a Bribe);
2C1.7 (Fraud Involving Deprivation of the Intangible Right to the
Honest Services of Public Officials); 2E1.1 (Unlawful Conduct Relating
to Racketeer Influenced and Corrupt Organizations); and 2E1.2
(Interstate or Foreign Travel or Transportation in Aid of Racketeering
Enterprise).''.
The Commentary to Sec. 2C1.1 captioned ``Application Notes'' is
amended by inserting the following additional note:
7. For the purposes of determining whether to apply the cross
references in this section, the ``resulting offense level'' means the
greater final offense level (i.e., the offense level determined by
taking into account both the Chapter Two offense level and any
applicable adjustments from Chapter Three, Parts A-D).''.
The Commentary to Sec. 2C1.7 captioned ``Application Notes'' is
amended by inserting the following additional note:
``6. For the purposes of determining whether to apply the cross
references in this section, the ``resulting offense level'' means the
greater final offense level (i.e., the offense level determined by
taking into account both the Chapter Two offense level and any
applicable adjustments from Chapter Three, Parts A-D).''.
Section Sec. 2X1.1 is amended by deleting subsection (b) in its
entirety and redesignating subsection (c) as subsection (b).
The Commentary to Sec. 2X1.1 captioned ``Application Notes'' is
amended by deleting Note 4 in its entirety and inserting the following
in lieu thereof:
``4. This guideline applies to attempts, solicitations, or
conspiracies that are not covered by a specific offense guideline. In
cases to which this guideline applies, a downward departure of up to
three levels may be warranted if the defendant is arrested well before
the defendant or any co-conspirator has completed the acts necessary
for the substantive offense. A downward departure would not be
appropriate under this section in cases in which the defendant or a co-
conspirator completed all the acts such person believed necessary for
successful completion of the substantive offense or the circumstances
demonstrate that the person was about to complete all such acts but for
apprehension or interruption by some similar event
[[Page 164]]
beyond the person's control. A downward departure also would not be
appropriate in cases involving solicitation if the statute treats
solicitation of the substantive offense identically with the
substantive offense, i.e., the offense level in such cases should be
the same as that for the substantive offense.''.
The Commentary to Sec. 2X1.1 captioned ``Background'' is deleted in
its entirety.
The Commentary to Sec. 1B1.3 captioned ``Application Notes'' is
amended by deleting Note 7 in its entirety.
The Commentary to Sec. 2A4.1 captioned ``Application Notes'' is
amended in Note 5 by deleting ``, subject to a possible 3-level
reduction under Sec. 2X1.1(b))''.
The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is
amended by deleting Note 9 in its entirety.
Section 1B1.10 Retroactivity of Amended Guideline Range
11. Synopsis of Proposed Amendment: This amendment responds to
recent litigation, including a circuit conflict and inquiries regarding
the operation of Sec. 1B1.10 and related statutory provisions.
The amendment clarifies Commission intent that the designation of
an amendment for retroactive application to previously sentenced,
imprisoned defendants authorizes only a reduction in the term of
imprisonment pursuant to 18 U.S.C. Sec. 3582(c)(2) (which, in turn,
speaks only to modification of a term of imprisonment) and does not
open any other components of the sentence (e.g., the term of supervised
release) to modification. The amendment further clarifies that the
amount of reduction in the prison sentence, subject to the constraints
of the amended, reduced guideline range and the amount of time
remaining to be served, is within the sound discretion of the court.
Proposed Amendment: Section 1B1.10 is amended in the title by
deleting ``Retroactivity'' and inserting in lieu thereof ``Reduction in
Term of Imprisonment as a Result''.
Section 1B1.10(b) is amended by deleting ``sentence'' the first
time it appears and inserting in lieu thereof ``the term of
imprisonment'', by deleting ``sentence'' the next time it appears and
inserting in lieu thereof ``term of imprisonment'', and by inserting
``, except that in no event may the reduced term of imprisonment be
less than the term of imprisonment the defendant has already served''
immediately before the period at the end of the sentence.
The Commentary to Sec. 1B1.10 captioned ``Application Notes'' is
amended by inserting the following additional note at the end:
``3. The determination of whether to grant a reduction in a term of
imprisonment under 18 U.S.C. Sec. 3582(c)(2) and the amount of such
reduction are within the sound discretion of the court, subject to the
limitations in subsection (b).''.
The Commentary to Sec. 1B1.10 captioned ``Background'' is amended
in the third paragraph by inserting ``to determine an amended guideline
range under subsection (b)'' immediately before the period at the end
of the sentence; and by inserting the adding at the end the following
new paragraph:
``The listing of an amendment in subsection (c) reflects policy
determinations by the Commission that a reduced guideline range is
sufficient to achieve the purposes of sentencing and that, in the sound
discretion of the court, a reduction in the term of imprisonment may be
appropriate for previously sentenced, qualified defendants. The
authorization of such a discretionary reduction does not otherwise
affect the lawfulness of a previously imposed sentence, does not
authorize a reduction in any other component of the sentence, and does
not entitle a defendant to a reduced term of imprisonment as a matter
of right.''.
Section 2B1.1. Larceny, Embezzlement, and Other Forms of Theft;
Receiving, Transporting, Transmitting, or Possessing Stolen Property
12. Synopsis of Proposed Amendment: (a) Source and Purpose--This
amendment addresses a significant interpretive problem involving a
specific offense characteristic in the Theft (Sec. 2B1.1) and Fraud
(Sec. 2F1.1) guidelines. The problem occurs in connection with the
specific offense characteristic under Sec. 2B1.1(b)(6)(B) and
Sec. 2F1.1(b)(6)(B), which provides an enhancement of four levels
(approximate 50 percent increase) and a floor offense level of 24 (51-
63 months for a first offender), if the offense ``affected a financial
institution and the defendant derived more than $1,000,000 in gross
receipts from the offense.'' The proper interpretation of this language
has been the subject of a number of hotline calls and some litigation
(although no circuit conflict has yet resulted). Staff review of the
Theft and Fraud guidelines has raised this matter for possible
Commission attention.
(b) Number of affected cases--FY '95 monitoring data are unable to
distinguish cases that received the similar enhancement for
substantially jeopardizing the safety and soundness of a financial
institution (under Sec. 2B1.1(b)(6)(A) and Sec. 2F1.1(b)(6)(A)) from
this particular enhancement under paragraph (B). One or the other
enhancement was applied in 37 (0.6%) of 6,019 fraud cases and 28 (0.9%)
of 3,142 theft (Sec. 2B1.1) cases. This amendment could decrease the
frequency with which this particular enhancement is given. The
amendment proposes to delete the four-level enhancement in paragraph
(B), while retaining the minimum offense level of 24 (because that is
all the directive requires). This could affect as many as 27 of the
fraud cases (i.e., 27 of the fraud cases received a 4-level enhancement
while 10 were affected by the floor of 24) and 2 of the theft cases
(i.e., 2 of the 28 cases received a 4-level enhancement while 26 were
affected by the floor of 24).
(c) Scope of Amendment--This amendment would continue to apply the
enhancement to a broader spectrum of cases than minimally required
under the congressional directive. However, the commentary would state
that the offense must be perpetrated against one or more financial
institutions and the defendant's $1 million must be derived entirely
from one or more financial institutions. The definition for ``gross
receipts'' in the commentary would be amended to clarify that ``gross
receipts from the offense'' includes property under the control of, or
in the custody of, the financial institution for a second party, e.g.,
a depositor. The Background Commentary would also be amended to reflect
the Commission's intent to implement the congressional directive more
broadly.
Proposed Amendment: Section Sec. 2B1.1(b)(6) is amended by deleting
``(A)''; by deleting ``; or'' immediately following ``institution'' and
inserting in lieu thereof a ``,'' ; and by deleting subsection (B) in
its entirety.
Section Sec. 2B1.1 is amended by inserting the following additional
subsection:
``(7) If (A) obtaining or retaining the gross receipts of one or
more financial institutions was an object of the offense, (B) the
defendant derived more than $1,000,000 in gross receipts from such
institutions, and (C) the offense level as determined above is less
than level 24, increase to level 24.''.
The Commentary to Sec. 2B1.1 captioned ``Application Notes'' is
amended in Note 11 by inserting at the beginning the following:
``For purposes of subsection (b)(7), `gross receipts' means any
moneys, funds, credits, assets, securities, or other real or personal
property, whether tangible or intangible, owned by, or
[[Page 165]]
under the custody or control of, a financial institution, that are
obtained directly or indirectly as a result of such offense. See 18
U.S.C. Secs. 982(a)(4), 1344.''.
The Commentary to Sec. 2B1.1 captioned ``Application Notes'' is
amended in Note 11 by deleting in the second sentence (formerly the
first sentence) ``from the offense,''; by deleting ``(6)(B)''
immediately following ``(b)''; and by deleting ``generally''
immediately following ``(7),''.
The Commentary to Sec. 2B1.1 captioned ``Application Notes'' is
amended in Note 11 by deleting the third sentence (formerly the second
sentence) in its entirety.
The Commentary to Sec. 2B1.1 captioned ``Background'' is amended in
the sixth paragraph by deleting ``Subsection'' and inserting in lieu
thereof ``Subsections''; by deleting ``(A)'' immediately following
``(b)(6)'' and inserting in lieu thereof ``and (b)(7)''; by deleting
``implements'' and inserting in lieu thereof ``implement''; by deleting
``instruction'' and inserting in lieu thereof ``instructions''; and by
inserting ``and section 2507 of Public Law 101-647, respectively''
immediately following ``101-73''.
Section 2F1.1(b)(6) is amended by deleting ``(A)''; by deleting ``;
or'' immediately following ``institution'' and inserting in lieu
thereof a ``,'' ; and by deleting (B) in its entirety.
Section 2F1.1(b) is amended by inserting the following additional
subsection:
``(7) If (A) obtaining or retaining the gross receipts of one or
more financial institutions was an object of the offense, (B) the
defendant derived more than $1,000,000 in gross receipts from such
institutions, and (C) the offense level as determined above is less
than level 24, increase to level 24.''.
The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is
amended in Note 16 by deleting in the first sentence ``from the
offense,''; by deleting ``(6)(B)'' immediately following ``(b)''; and
by deleting ``generally'' immediately following ``(7),''.
The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is
amended in Note 16 by deleting the second sentence in its entirety.
The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is
amended in Note 16 by inserting at the beginning the following:
``For purposes of subsection (b)(7), `gross receipts' means any
moneys, funds, credits, assets, securities, or other real or personal
property, whether tangible or intangible, owned by, or under the
custody or control of, a financial institution, that are obtained
directly or indirectly as a result of such offense. See 18 U.S.C.
Secs. 982(a)(4), 1344.''.
The Commentary to Sec. 2F1.1 captioned ``Background'' is amended in
the seventh paragraph by deleting ``Subsection'' and inserting in lieu
thereof ``Subsections'';
By deleting ``(A)'' immediately following ``(b)(6)'' and inserting
in lieu thereof ``and (b)(7)'';
By deleting ``implements'' and inserting in lieu thereof
``implement'';
By deleting ``instruction'' and inserting in lieu thereof
``instructions'';
And by inserting ``and section 2507 of Public Law 101-647,
respectively'' immediately following ``101-73''.
Section 5A1.1 Sentencing Table
13. Synopsis of Proposed Amendment: This is a two-part amendment.
First, this amendment incorporates the Sentencing Table into a new
guideline at Sec. 5A1.1, in response to questions about the legal
status of the Sentencing Table. By incorporating the Sentencing Table
into a guideline, this amendment also uses a construct for the
Sentencing Table that is consistent with the construct used for other
tables in the Guidelines Manual, such as the Drug Quantity Table in
Sec. 2D1.1.
Second, this amendment addresses an arguably unwarranted ``cliff''
in the Sentencing Table between offense levels 42 and 43. Under the
current table, offense level 42 prescribes guideline ranges of 360
months to life imprisonment for each criminal history category. Offense
level 43, in comparison, prescribes a guideline sentence of life for
each criminal history category.
There is evidence that the Commission initially intended to
preserve level 43 and its resulting life sentence requirement for the
most egregious law violators; i.e., those convicted of first degree
murder, including felony murder, and treason. Note, for example, the
wording of Application Note 1 to Sec. 2A1.1: ``The Commission has
concluded that in the absence of capital punishment life imprisonment
is the appropriate punishment for premeditated killing.'' However, in
providing for a sentencing table with a continuous series of offense
levels, the Commission actually made it possible for those most serious
categories of criminals to be subject to offense levels less than 43
(and, hence, to guideline ranges that do not require a life sentence),
if mitigating guideline adjustments apply. Conversely, the continuous
nature of the Sentencing Table also can result in defendants who commit
less inherently serious crimes; i.e., those carrying base offense
levels less than 43, receiving an offense level of 43 (and, hence, a
required life sentence) as a result of applicable aggravating guideline
adjustments (e.g., aggravating role, weapon enhancement). Prior to a
1994 amendment reducing the quantity-based offense level in the drug
table from 42 to 38, this latter situation occurred more frequently
than it occurs now.
Nevertheless, in those infrequent cases, when a defendant whose
base offense level is less than 43 becomes subject to guideline
enhancements that result in a final, adjusted offense level of 43 or
more, a ``mandatory'' guideline sentence of life imprisonment may not
be warranted. In the last several years, a number of judges have
written or called the Commission to express concern about what they see
as an anomalous, unwarranted ``cliff'' between level 42 (range of 360
months to life) and level 43 (life), particularly in the case of a very
young defendant who has a remaining life expectancy exceeding 30 years.
Those who have contacted the Commission about this sentencing table
phenomenon have pointed out that, for younger defendants, there may be
a definite qualitative as well as a quantitative difference between a
sentence of 30 or more years and a non-parolable sentence of life. In
some of these cases, the applicability of a guideline enhancement of
one or two offense levels can turn a very lengthy, deserved sentence
into a life sentence that may not be warranted and, according to some
who have commented, may even raise Eighth Amendment concerns.
The second part of this amendment addresses this concern by making
level 42 the offense level upper limit in the sentencing table, unless
the defendant was subject to an offense level of 43 as a result of the
application of Sec. 2A1.1 (First Degree Murder), Sec. 2M1.1 (Treason),
or other guideline provision that elevates the offense level to level
43 because of the death of a person. In such cases, level 43 and its
associated life sentence would continue to apply. This approach
preserves level 43 for the most egregious cases while providing a range
of 360 months to life for all other cases that reach level 42 through
guideline enhancements.
This amendment can be expected to affect a relatively small number
(perhaps 30-40) of cases, based on FY 1995 monitoring data. In FY 1995,
80 defendants received a final offense level of 43. Of these, 28 would
not be affected because level 43 was received via Sec. 2A1.1 (First
Degree Murder); (there
[[Page 166]]
were no Sec. 2M1.1 (Treason) cases.) Of the 52 remaining defendants at
final offense level 43, 34 received a life sentence. The amendment
could be expected to impact approximately this number of defendants,
some of whom might still receive a life sentence because the judge
elected to impose it.
Proposed Amendment: The Commentary to Sec. 2A1.1 captioned
``Application Notes'' is amended in Note 1 by deleting ``life
imprisonment is the appropriate punishment for premeditated killing''
and inserting in lieu thereof ``a defendant who commits premeditated
murder should be sentenced at the highest offense level under the
Sentencing Table (subject to any applicable adjustments from Chapter
Three)'' ; and by deleting the second, third, and fourth sentences.
Chapter Five--Determining the Sentence is amended in Part A--
Sentencing Table by deleting ``The Sentencing Table used to determine
the guideline range follows:'' and inserting in lieu thereof:
``Sec. 5A1.1 Sentencing Table
(a) The Sentencing Table used to determined the guideline range is
set forth in subsection (b).''.
Chapter Five--Determining the Sentence is amended in Part A--
Sentencing Table by inserting ``(b)'' in the title of the Sentencing
Table.
The Commentary to Sentencing Table is amended in Note 2 by deleting
``An offense level of more than 43 is to be treated as an offense level
of 43.'' and inserting the following in lieu thereof:
``A total offense level of more than 42 is to be treated as an
offense level of 42. However, if the final offense level is 43 or more
as a result of the application of Sec. 2A1.1 (First Degree Murder),
Sec. 2M1.1 (Treason), or another guideline provision (including a cross
reference to Sec. 2A1.1) that increases the offense level to level 43
because the offense involved first degree murder or resulted in death,
the offense level is to be treated as an offense level of 43.''.
Section 2B3.1 Robbery
14. Synopsis of Proposed Amendment: (a) Source and Purpose--This
amendment addresses a split among the circuit courts regarding the
application of the ``express threat of death'' enhancement in
Sec. 2B3.1 (Robbery).
The majority, relying on the Commission's discussion in Application
Note 6, holds that the enhancement applies when the combination of the
defendant's actions and words would instill in a reasonable person in
the position of the immediate victim (e.g., a bank teller) a greater
amount of fear than necessary to commit the bank robbery. Pursuant to
this approach, the enhancement applies even when the defendant's
statement does not indicate distinctly an intent to kill the victim; it
is sufficient that the victim infers from the defendant's conduct that
a threat of death was made. See United States v. Robinson, 86 F.3d
1197, 1202 (D.C. Cir. 1996) (enhancement applies if (1) a reasonable
person in the position of the immediate victim would very likely
believe the defendant made a threat and the threat was to kill; and (2)
the victim likely thought his life was in peril); United States v.
Murray, 65 F.3d 1161, 1167 (4th Cir. 1995) (``any combination of
statements, gestures, or actions that would put an ordinary victim in
reasonable fear for his or her life is an express threat of death'');
United States v. France, 57 F.3d 865, 868 (9th Cir. 1995) (``[a]n
express threat need not be specific in order to instill the requisite
level of fear in a reasonable person''); United States v. Hunn, 24 F.3d
994 (7th Cir. 1994) (combination of defendant's note and his gesture
that he was pointing a gun through his pocket at the teller would be
understood by a reasonable victim as a death threat); United States v.
Bell, 12 F.3d 139 (8th Cir. 1993) (upholding enhancement based on
demand note's statement ``Make any sudden moves alert anyone I'll pull
the pistol in this purse and the shooting will start!''); United States
v. Smith, 973 F.2d 1374, 1378 (8th Cir. 1992) (combination of
threatening statements to teller and gesture that defendant had a gun
instilled greater fear than necessary to commit the robbery).
The minority holds that only what the defendant does or says, not
what the victim infers, should be used to assess whether an express
threat of death was made within the meaning of the robbery guideline.
United States v. Alexander, 88 F.3d 427, 431 (6th Cir. 1996) (``a
defendant's statement must distinctly and directly indicate that the
defendant intends to kill or otherwise cause the death of the
victim''); United States v. Tuck, 964 F.2d 1079 (11th Cir. 1992)
(same); see also United States v. Hunn, 24 F.3d at 999-1000
(Easterbrook, J., dissenting). The Sixth Circuit also held that the
commentary examples and the Commission's underlying intent at
Application Note 6 are not controlling because they are inconsistent
with the plain meaning of ``express'' in Sec. 2B3.1(b)(2)(F). United
States v. Alexander, 88 F.3d at 431 (referring to Stinson v. United
States, 508 U.S. 36 (1993)).
(b) Policy Considerations--The major policy consideration is how
strictly the Commission intends for the threat of death enhancement to
apply; i.e., must the defendant explicitly threaten death in order for
the enhancement to apply.
(c) Number of Affected Cases--In FY 1995, the enhancement is
applied in 169 out of 1,488 cases (or 11.4% of the cases) sentenced
under the robbery guideline.
(d) Amendment Options--This amendment adopts the majority view and
clarifies the Commission's intent to enhance offense levels for
defendants whose intimidation of the victim exceeds that amount
necessary to constitute an element of a robbery offense. The amendment
deletes the reference to ``express'' in Sec. 2B3.1(b)(2)(F) and
provides for a two-level enhancement ``if a threat of death was made''.
Proposed Amendment: Section Sec. 2B3.1(b)(2)(F) is amended by
deleting ``an express'' and inserting in lieu thereof ``a''.
Option 1:
The Commentary to Sec. 2B3.1 captioned ``Application Notes'' is
amended in Note 6 by deleting ``An express'' and inserting in lieu
thereof ``A '' ``;
By deleting the second sentence in its entirety and inserting in
lieu thereof ``Accordingly, the defendant does not have to state
expressly his intent to kill the victim in order for the enhancement to
apply.'';
And by deleting in the third sentence ``the underlying'' and
inserting in lieu thereof ``this''.
Option 2:
The Commentary to Sec. 2B3.1 captioned ``Application Notes'' is
amended in Note 6 by deleting ``An express'' and inserting in lieu
thereof ``A '' ``;
By deleting the second sentence in its entirety and inserting in
lieu thereof ``Accordingly, the defendant does not have to state
expressly his intent to kill the victim in order for the enhancement to
apply.'';
By deleting in the third sentence ``the underlying'' and inserting
in lieu thereof ``this''; and by deleting ``significantly greater fear
than that necessary to constitute an element of the offense of
robbery'' and inserting in lieu thereof ``a fear of death''.
15. Synopsis of Proposed Amendment: This amendment addresses the
Carjacking Correction Act of 1996, Pub.L. 104-217; 110 Stat. 3020.
Section 2 of that Act amends 18 U.S.C. Sec. 2119(2), which (A) makes it
unlawful to take a motor vehicle by force and violence or by
intimidation, with intent to cause death or serious bodily harm, and
(B) provides for a term of
[[Page 167]]
imprisonment of not more than 25 years if serious bodily injury
results. As amended by the Carjacking Correction Act of 1996, 18 U.S.C.
Sec. 2119(2) includes aggravated sexual abuse under 18 U.S.C. Sec. 2241
and sexual abuse under 18 U.S.C. Sec. 2242 within the meaning of
``serious bodily injury''. Therefore, a defendant will be subject to
the 25-year statutory maximum under 18 U.S.C. Sec. 2119(2) if the
defendant commits a carjacking and rapes the carjacking victim during
the carjacking.
In addition, this amendment amends Sec. 2B3.1(b)(1) to provide
cumulative enhancements if the offense involved bank robbery and
carjacking. Currently, Sec. 2B3.1 provides a 2-level enhancement either
for bank robbery or for carjacking; it does not provide separate
enhancements for those factors.
Two options are presented. Option 1 is a fairly narrow response to
the Act. It amends Application Note 1 of Sec. 2B3.1 (Robbery,
Extortion, and Blackmail), the guideline which covers carjacking
offenses under 18 U.S.C. Sec. 2119 (and only that guideline) to provide
that ``serious bodily injury'' includes aggravated sexual abuse under
18 U.S.C. Sec. 2241 and sexual abuse under 18 U.S.C. Sec. 2242.
Option 2 is a broader response to the Act. It expands the
definition of ``serious bodily injury'' under Sec. 1B1.1. Option 2
makes this broader definition generally applicable to Chapter Two
offense guidelines which contain a ``serious bodily injury''
enhancement. The sexual abuse guideline, Sec. 2A3.1, in turn is amended
to make clear that, for purposes of that guideline, the ``serious
bodily injury'' enhancement covers conduct other than aggravated sexual
abuse and sexual abuse, which are inherent in the conduct covered by
that guideline.
Option 2 also clarifies the guideline definition of serious bodily
injury by inserting the word ``protracted'' immediately preceding the
word ``impairment''. Statutes defining serious bodily injury
consistently use the term ``protracted'' before ``impairment'' (e.g.,
18 U.S.C. Secs. 831, 1365, 1864; 21 U.S.C. Sec. 802). Without use of
the term ``protracted'', even a temporary impairment such as a
``sprained wrist'' would fall within the definition of serious bodily
injury, as would the throwing of sand or pepper in someone's face to
temporarily impair vision. Finally, Option 2 removes two sentences of
commentary that are unhelpful.
[Option 1
Section 2B3.1(b)(1) is amended by deleting ``(A)'' immediately
following ``If'', and by deleting ``or (B) the offense involved
carjacking,''.
Section 2B3.1 is amended by renumbering subdivisions (5) and (6) as
subdivisions (6) and (7) respectively and inserting the following as a
new subdivision (5):
``(5) If the offense involved carjacking, increase by 2 levels.''.
Section 2B3.1 captioned ``Application Notes'' is amended in Note 1
by inserting ``For purposes of this guideline--'' immediately before
``Firearm,'' and inserting ``In addition, `serious bodily injury--'
includes conduct constituting criminal sexual abuse under 18 U.S.C.
Sec. 2241 or Sec. 2242 or any similar offense under state law.''
immediately after ``Instructions).''.
[Option 2
The Commentary to Sec. 1B1.1 captioned ``Application Notes'' is
amended in Note 1(b) by deleting ``As used in the guidelines, the
definition of this term is somewhat different than that used in various
statutes.''.
The Commentary to Sec. 1B1.1 captioned ``Application Notes'' is
amended in Note 1(j) by inserting ``protracted'' immediately before
``impairment''; and by deleting ``As used in the guidelines, the
definition of this term is somewhat different than that used in various
statutes.'' and inserting in lieu thereof `` `Serious bodily injury'
includes conduct constituting criminal sexual abuse under 18 U.S.C.
Sec. 2241 or Sec. 2242 or any similar offense under state law.''.
The Commentary to Sec. 2A3.1 captioned ``Application Notes'' is
amended in Note 1 by inserting ``For purposes of this guideline''
immediately before ```Permanent''; and by inserting the following as
the last sentence:
``However, for purposes of this guideline, `serious bodily injury'
means conduct other than criminal sexual abuse, which already is taken
into account in the base offense level under subsection (a).''.
The Commentary to Sec. 2A3.1 captioned ``Application Notes'' is
amended in Note 1 by inserting the following as the last paragraph:
``The means set forth in 18 U.S.C. Sec. 2241 (a) or (b)'' are: by
using force against the victim; by threatening or placing the victim in
fear that any person will be subject to death, serious bodily injury,
or kidnapping; by rendering the victim unconscious; or by administering
by force or threat of force, or without the knowledge or permission of
the victim, a drug, intoxicant, or other similar substance and thereby
substantially impairing the ability of the victim to appraise or
control conduct. This provision would apply, for example, where any
dangerous weapon was used, brandished, or displayed to intimidate the
victim.''.
The Commentary to Sec. 2A3.1 captioned ``Application Notes'' is
amended by deleting Note 2 in its entirety; and by renumbering Notes 3-
7 as Notes 2-6 respectively.
Section 2B3.1(b)(1) is amended by deleting ``(A)'' immediately
after ``If''; by deleting ``or (B) the offense involved carjacking,''
immediately before ``increase''.
Section 2B3.1(b) is amended by renumbering subdivisions (5) and (6)
as subdivisions (6) and (7) respectively, and by inserting the
following as a new subdivision (5):
``(5) If the offense involved carjacking, increase by 2 levels.''.
Section 2B5.1 Offenses Involving Counterfeit Bearer Obligations of the
United States
16. Synopsis of Proposed Amendment: This is a three-part amendment.
First, this amendment addresses section 807(h) of the Antiterrorism and
Effective Death Penalty Act of 1996. That section requires the
Commission to amend the sentencing guidelines to provide an appropriate
enhancement for a defendant convicted of an international
counterfeiting offense under 18 U.S.C.Sec. 470. The amendment adds a
specific offense characteristic in Sec. 2B5.1 (Offenses Involving
Counterfeit Bearer Obligations of the United States) to provide a two-
level enhancement if the offense occurred outside the United States.
Second, this amendment moves the coverage of offenses involving
altered bearer instruments of the United States from Sec. 2F1.1 (Fraud
and Deceit; Forgery; Offenses Involving Altered or Counterfeit
Instruments Other than Counterfeit Bearer Obligations of the United
States) to Sec. 2B5.1 (Offenses Involving Counterfeit Bearer
Obligations of the United States). Currently, Sec. 2B5.1 covers
counterfeit bearer obligations of the United States. Section 2F1.1
covers altered bearer obligations of the United States. The offense
level in Sec. 2B5.1 is one-level higher than sophisticated fraud (i.e.,
fraud and more than minimal planning) under Sec. 2F1.1 throughout the
range of loss values. There are two reasons for moving offenses
involving altered bearer instruments of the United States from
Sec. 2F1.1 to Sec. 2B5.1: (A) theoretical consistency, and (B)
simplicity of guideline operation.
(A) Theoretical Consistency. The higher offense level for offenses
involving counterfeit bearer obligations of the United States reflects
the lower
[[Page 168]]
level of scrutiny realistically possible in transactions involving
currency and the absence of any requirement that the person passing the
currency produce identification. Under this rationale, however, altered
bearer obligations of the United States seem to belong with counterfeit
bearer obligation of the United States, rather than with other
counterfeit or altered instruments.
(B) Simplicity of Guideline Operation. As a practical matter, the
distinction between an altered instrument and a counterfeit instrument
is not always clear. For example, if a genuine one-dollar bill is
bleached and a photocopy of a twenty-dollar bill made using the genuine
note paper, is the resulting twenty-dollar bill a counterfeit bill or
an altered bill? In one recent case, a defendant made photocopies of
twenty-dollar bills, then cut out the presidential picture of genuine
twenty-dollar bills and switched pictures (using the genuine picture
with the photocopied bill and the photocopied picture with the
otherwise genuine bill). Is the photocopied bill with the genuine
presidential picture a counterfeit or an altered instrument? This
amendment simplifies the guidelines by handling this conduct in the
same offense guideline, thus avoiding any difference based upon such
very fine distinctions.
Third, this amendment clarifies the operation of Sec. 2B5.1
(Offenses Involving Counterfeit Bearer Obligations of the United
States) in two respects to address issues raised in litigation. It
deletes a phrase in Application Note 3 concerning photocopying a note
that could lead to the inappropriate conclusion that an enhancement
from subsection (b)(2) does not apply even to sophisticated copying of
notes. It also adds an application note to provide expressly that items
clearly not intended for circulation are not counted under subsection
(b)(1).
Proposed Amendment: Section 2B5.1 is amended in the title by
inserting ``or Altered'' immediately following ``Counterfeit''.
Section 2B5.1(b) (1) and (b)(2) are both amended by inserting ``or
altered'' immediately following ``counterfeit''.
Section 2B5.1(b) is amended by inserting the following new
subdivision at the end:
``(4) If the offense was committed outside the United States,
increase by 2 levels.''.
The Commentary to Sec. 2B5.1 captioned ``Statutory Provision'' is
amended by deleting ``471'' and inserting in lieu thereof ``470''.
The Commentary to Sec. 2B5.1 captioned ``Application Notes'' is
amended by deleting Note 2, renumbering Note 1 as Note 2 and inserting
the following as the new Note 1:
``1. For purposes of this guideline, ``United States'' means each
of the fifty states, the District of Columbia, the Commonwealth of
Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands,
and American Samoa.'';
In Note 2 (formerly Note 1) by inserting ``or altering''
immediately following ``counterfeiting'';
By renumbering Note 3 as Note 4 and inserting the following as the
new Note 3:
``3. For the purposes of subsection (b)(1), do not count items that
clearly were not intended for circulation (e.g., items that are so
defective that they are unlikely to be accepted even if subjected to
only minimal scrutiny). However, partially completed items that would
have been completed but for the discovery of the offense should be
counted for purposes of such subsection.'';
And in Note 4 (formerly Note 3) by deleting ``merely photocopy
notes or otherwise''.
The Commentary to Sec. 2B5.1 captioned ``Background'' is amended by
inserting ``alters bearer obligations of the United States or''
immediately before ``produces''.
Section 2F1.1 is amended in the title by inserting ``Altered or''
immediately following ``than''.
Section 2D1.6 Use of Communication Facility in Committing Drug Offense
17. Synopsis of Proposed Amendment: This amendment clarifies the
operation of Secs. 2D1.6 (Use of Communication Facility in Committing
Drug Offense; Attempt or Conspiracy), 2E1.1 (Unlawful Conduct Relating
to Racketeer Influenced and Corrupt Organizations), 2E1.2 (Interstate
or Foreign Travel or Transportation in Aid of a Racketeering
Enterprise), and 2E1.3 (Violent Crimes in Aid of Racketeering Activity)
in a manner consistent with the operation of Sec. 1B1.2 (Applicable
Guidelines) governing the selection of the offense guideline section.
This amendment addresses a circuit conflict by specifying that the
``underlying offense'', for purposes of these guidelines, is determined
on the basis of the conduct of which the defendant was convicted.
Compare United States v. McCall, 915 F.2d 811 (2d Cir. 1990) with
United States v. Carrozza, 4 F.3d 70 (1st Cir. 1993). In addition, this
amendment deletes an application note from Secs. 2E1.1, 2E1.2, and
2E1.3 that is unnecessary and is not included in other sections of the
Guidelines Manual.
Proposed Amendment: The Commentary to Sec. 2D1.6 captioned
``Application Notes'' is amended by deleting ``Note'' and inserting in
lieu thereof ``Notes'', by renumbering Note 1 as Note 2, by inserting
the following as new Note 1:
``1. `Offense level applicable to the underlying offense'' means
the offense level determined by using the offense guideline applicable
to the controlled substance offense that the defendant was convicted of
using a communication facility to commit, cause, or facilitate.''.
The Commentary to Sec. 2E1.1 captioned ``Application Notes'' is
amended in Note 1 by deleting ``Where there is more than one underlying
offense'' and inserting in lieu thereof ``The `offense level applicable
to the underlying racketeering activity' under subsection (a)(2) means
the offense level under the applicable offense guideline, as determined
under the provisions of Sec. 1B1.2 (Applicable Guidelines)(i.e., on the
basis of the conduct of which the defendant was convicted). In the case
of more than one underlying offense (for this determination, apply the
provisions of Application Note 5 of the Commentary to Sec. 1B1.2 as if
in a conspiracy case)''; by inserting ``apply Chapter Three, Parts A,
B, and C to subsection (a)(1), and'' immediately following ``level,'',
by deleting ``both (a)(1) and'' and inserting in lieu thereof
``subsection''; by deleting Note 3, and by renumbering the remaining
notes accordingly.
The Commentary to Sec. 2E1.2 captioned ``Application Notes'' is
amended in Note 1 by deleting ``Where there is more than one underlying
offense'' and inserting in lieu thereof ``The `offense level applicable
to the underlying crime of violence or other unlawful activity' under
subsection (a)(2) means the offense level under the applicable offense
guideline, as determined under the provisions of Sec. 1B1.2 (Applicable
Guidelines) (i.e., on the basis of the conduct of which the defendant
was convicted). In the case of more than one underlying offense (for
this determination, apply the provisions of Application Note 5 of the
Commentary to Sec. 1B1.2 as if in a conspiracy case)'',
The Commentary to Sec. 2E1.3 captioned ``Application Notes'' is
amended by deleting ``Notes'' and inserting in lieu thereof ``Note'';
in Note 1 by adding the following as the first sentence:
``The `offense level applicable to the underlying crime or
racketeering activity'' under subsection (a)(2) means the offense level
under the applicable offense guideline, as determined under the
provisions of Sec. 1B1.2 (Applicable
[[Page 169]]
Guidelines)(i.e., on the basis of the conduct of which the defendant
was convicted).'';
And by deleting Note 2.
Fraud, Theft, and Tax Offenses
Chapter Two, Parts B, F, and T (Theft, Fraud, and Tax)
18. Synopsis of Proposed Amendment: This amendment makes the
following changes to guideline Secs. 2B1.1, 2F1.1, and 2T4.1: (1)
Eliminates the more-than-minimal-planning enhancement in Secs. 2B1.1
and 2F1.1 and other guidelines, and builds a corresponding increase
into the loss tables, and creates a two-level enhancement like the one
in Sec. 2T4.1 for offenses involving ``sophisticated means''; (2)
increases the base offense level of Sec. 2B1.1 (the theft guideline)
and revises the loss tables in Secs. 2B1.1, 2F1.1, and 2T4.1 (theft,
fraud, and tax offenses, respectively); (3) changes the current one-
level increments in the loss tables in Secs. 2B1.1, 2F1.1, and 2T4.1
(to two-level increments or a combination of one and two-level
increments); (4) increases the severity of the loss tables in
Secs. 2B1.1, 2F1.1, and 2T4.1 at higher loss amounts; (5) adds
telemarketing enhancements to Secs. 2B1.1 and 2F1.1; (6) adds a cross
reference in Sec. 2F1.1 for offenses involving arson; and (7) makes
conforming technical changes.
(1) Elimination of More-than-Minimal-Planning Enhancement for
Sophisticated Means.
First, the amendment eliminates the specific offense characteristic
for more-than-minimal planning from the theft and fraud guidelines (and
a number of other guidelines), and phases in a corresponding increase
in the loss tables (or, in the case of option 3, into the base offense
level). Arguments for revising or eliminating the ``more than minimal
planning'' specific offense characteristic include: (I) the workload
(and related litigation) burden of the provision is considerable; in
each of the over 9,000 cases sentenced under these guidelines, some
consideration is given to whether this SOC is applicable; (ii) the
definition of more than minimal planning is arguably unclear or
ambiguous; (iii) past Commission studies have shown that the provision
is applied unevenly, thus contributing to unwarranted disparity; and
(iv) the adjustment is applied with such frequency, particularly at
higher dollar amounts, that it arguably should be built into the loss
table or even the base offense level. (The more-than-minimal planning
adjustment is applied in 58.7% of all cases sentenced under Sec. 2B1.1;
of all cases under Sec. 2F1.1, it is applied in 82.5% (and over 89% of
cases involving loss amounts greater than $10,000)).
The amendment proposes creating a two-level specific offense
characteristic in Secs. 2B1.1 and 2F1.1 (and other guidelines that
currently have a more-than-minimal planning enhancement) that would
apply if ``sophisticated means'' were used to impede discovery of the
existence or extent of the offense (with a floor of level 12).
Replacing the more-than-minimal planning enhancement with one for
sophisticated means will increase the fact-finding and application
burden compared to just deleting the more-than-minimal planning
enhancement. In addition, in the proposed loss table options at levels
at or above the point where the two levels from more-than-minimal
planning are automatically built into the loss table, defendants who
would receive the new two-level enhancement for sophisticated means
would effectively receive an additional two-level increase, in addition
to any others provided in this amendment. It is unclear how many cases
would be affected by this new enhancement. In conjunction with the
addition of this enhancement, it is proposed that the current specific
offense characteristic involving use of foreign bank accounts found at
subsection (b)(5) (providing a floor of 12 for such offenses), be
deleted and incorporated into the definition of ``sophisticated means''
for all guidelines that currently have a more-than-minimal planning
enhancement. In FY 1995, of the 6,019 cases sentenced under Sec. 2F1.1,
3 (.05%) received the enhancement for use of foreign bank accounts.
(2) Amendments to Loss Tables.
Three options are presented for changes to the loss tables for the
theft and fraud guidelines. A corresponding change is proposed to the
tax loss table in Sec. 2T4.1 (for options 1 and 2; if option 3 is
chosen, a conforming tax loss table will be prepared). Depending on the
option chosen, the necessity of factual findings for the lowest loss
amounts is eliminated by building these loss amounts into the base
offense level.
Options 1 and 2 of this proposal provide identical base offense
levels of 6 for the theft and fraud guidelines. Option 3 provides a
base offense level of 8.
(3) Loss Tables--Two-level Increments.
Second, in options one and three the loss tables are changed from
the current one-level increments to two-level increments, so that
broader ranges of dollar loss are assigned to a particular offense
level increase. Option two generally retains one-level increments, but
provides two-level increments for losses above $2,000 and $5,000, and
for loss increments above $5,000,000. Option two retains cutting points
that are very similar to the current loss tables, but has no consistent
pattern in the selection of the cutting points.
Several arguments suggest use of two-level increments in the loss
tables, as proposed in Options One and Three: (i) Reduction in
probation officer and judicial workload (broader loss ranges will
produce fewer ``cutting points''; for example, a two-level loss table--
with no other changes--would go from 18 to 10 cutting points); (ii)
increased consistency with other offense guidelines (most alternative
base offense levels and specific offense characteristics increase by at
least two-level increments; for example, the drug table); and (iii) a
table with two-level increments is less mechanistic and lessens the
appearance of false precision compared to the current structure. On the
other hand, one-level increments provide a smoother increase in levels
relative to loss amounts, with a minimized ``cliff'' effect and
somewhat greater proportionality.
(4) Loss Tables--Increased Severity at Higher Loss Amounts.
Fourth, all three options provide for increases in the severity
levels assigned to the higher loss amounts, in addition to the increase
built into the table (or base offense level) in response to the
elimination of the more-than-minimal planning adjustment.
There are several reasons why consideration should be given to
raising the severity levels for cases involving the largest loss
amounts. First, the draft report of the Commission-sponsored ``just
punishment'' study suggests that respondents identified certain kinds
of cases that may warrant greater punishment for higher loss amounts
than currently provided by the loss tables in the theft and fraud
guidelines: embezzlement or theft cases involving bank officials or
postal workers; fraudulent solicitation for a nonexistent charity;
fraud involving false mortgage application with no intent to repay; and
forgery or fraud involving stolen credit cards or writing bad checks.
Second, the draft results of the Federal Judicial Center survey of
federal district court judges and chief probation officers reveal
sentiment that Secs. 2B1.1 and 2F1.1 under punish defendants whose
offenses involve large monetary losses.
Third, the Department of Justice and the Criminal Law Committee of
the Judicial Conference have recommended that consideration be given to
raising the severity levels at higher loss
[[Page 170]]
amounts for theft and fraud cases to more appropriately punish large-
scale offenders.
(5) Telemarketing Enhancements.
The fifth change proposed by this amendment is to add specific
offense characteristics to Sec. 2F1.1 for offense conduct involving
telemarketing. In the 1994 omnibus crime bill, Congress raised the
statutory maximum for telemarketing offenses by five years (18 U.S.C.
Sec. 2326(1)), and by ten years for such offenses that victimized ten
or more persons over age 55 or targeted persons over the age of 55 (18
U.S.C. Sec. 2326(2)). This amendment provides a two-level increase in
Sec. 2F1.1 for offenses involving telemarketing, and an additional,
cumulative 2-level increase if the offense victimized 10 or more
persons over the age of 55, or targeted persons over the age of 55.
(6) Cross Reference--Arson.
The sixth change proposed by the amendment is to add to the fraud
guideline a cross reference to Sec. 2K1.4 (Arson, Property Damage by
Use of Explosives), if the offense involved arson or property
destruction by use of explosives, and if the resulting offense level is
greater. Offenses that involve an underlying arson may be charged as
frauds. The proposed cross reference better ensures that similar
offenses are treated similarly.
(7) Conforming Technical Changes.
The amendment also makes the following technical changes: In
Sec. 2B1.1, subsection (b)(3) is proposed for deletion because the
floor of 6 for offenses involving the theft of mail is unnecessary
given the proposal to increase the base offense level for all offenses
under this guideline from 4 to 6; in Sec. 2B1.1, subsection (b)(4)(B)
providing a four-level increase for offenses involving receiving stolen
property is revised to provide a two-level increase because of the
proposed deletion of more than minimal planning (i.e., the current,
four-level enhancement is applied in the alternative to a two-level
enhancement for more than minimal planning; if the more-than-minimal
planning enhancement is subsumed in the loss tables, it is necessary to
reduce the four-level enhancement for fencing stolen property to two
levels to maintain equipoise). In Sec. 2F1.1, subsection (b)(2)(B),
providing an alternative (to the more-than-minimal-planning) two-level
increase for a scheme involved the defrauding of more than one victim,
is proposed for deletion because the concerns are handled by building
the levels for more than minimal planning into the loss table; and the
definition of more-than-minimal planning in Sec. 1B1.1, comment.
(n.1(f)), is proposed for deletion and replacement by the definition of
``sophisticated means'', with corresponding changes to
Secs. 2A2.1(b)(1), 2B1.1(b)(4)(A), 2B1.3(b)(3), and 2B2.1(b)(1). The
definition of ``sophisticated means'' currently in Sec. 2T1.1 is
revised accordingly.
(A) Proposed Amendment
The Commentary to Sec. 1B1.1 captioned ``Application Notes'' is
amended by deleting application note 1(f) in its entirety and inserting
in lieu thereof:
`` `Sophisticated means to impede discovery of the offense or its
extent,' includes conduct that is more complex or demonstrates greater
intricacy or planning than a routine effort to impede discovery of the
offense or its extent. An enhancement would be applied, for example
where the defendant used transactions through corporate shells or
fictitious entities, or used foreign bank accounts or transactions to
conceal the nature or extent of the fraudulent conduct.''
* * * * *
Section 2B1.1(a) (Base Offense Level) is amended by deleting ``4''
and inserting in lieu thereof [Options 1 and 2: ``6''; Option 3:
``8''].
Section 2B1.1 is amended by deleting (b)(1) in its entirety, and
inserting in lieu thereof, one of the following three options:
Option One
[``(b) Specific Offense Characteristics
(1) If the loss was $5,000 or more, increase the offense level as
follows:
------------------------------------------------------------------------
Loss (apply the greatest) Increase in level
------------------------------------------------------------------------
(A) $5,000 or more........................ Add 2.
(B) 10,000 or more........................ Add 4.
(C) 22,500 or more........................ Add 6.
(D) 50,000 or more........................ Add 8.
(E) 120,000 or more....................... Add 10.
(F) 275,000 or more....................... Add 12.
(G) 650,000 or more....................... Add 14.
(H) 1,500,000 or more..................... Add 16.
(I) 3,500,000 or more..................... Add 18.
(J) 8,000,000 or more..................... Add 20.
(K) 18,000,000 or more.................... Add 22.
(L) 40,000,000 or more.................... Add 24.
(M) 90,000,000 or more.................... Add 26''].
------------------------------------------------------------------------
Option Two
[``(b) Specific Offense Characteristics
(1) If the loss exceeded $2,000, increase the offense level as
follows:
------------------------------------------------------------------------
Loss (apply the greatest) Increase in level.
------------------------------------------------------------------------
(A) More than $2,000...................... Add 2.
(B) More than 5,000....................... Add 4.
(C) More than 10,000...................... Add 5.
(D) More than 20,000...................... Add 6.
(E) More than 40,000...................... Add 7.
(F) More than 70,000...................... Add 8.
(G) More than 120,000..................... Add 9.
(H) More than 200,000..................... Add 10.
(I) More than 350,000..................... Add 11.
(J) More than 500,000..................... Add 12.
(K) More than 800,000..................... Add 13.
(L) More than 1,500,000................... Add 14.
(M) More than 2,500,000................... Add 15.
(N) More than 5,000,000................... Add 16.
(O) More than 7,500,000................... Add 18.
(P) More than 15,000,000.................. Add 20.
(Q) More than 25,000,000.................. Add 22.
(R) More than 50,000,000.................. Add 24''].
------------------------------------------------------------------------
Option Three
[``(b) Specific Offense Characteristics
(1) If the loss exceeded $5,000, increase the offense level as
follows:
------------------------------------------------------------------------
Loss (apply the greatest) Level of increase.
------------------------------------------------------------------------
(A) More than $5,000...................... Add 2.
(B) More than 20,000...................... Add 4.
(C) More than 60,000...................... Add 6.
(D) More than 100,000..................... Add 8.
(E) More than 250,000..................... Add 10.
(F) More than 500,000..................... Add 12.
(G) More than 750,000..................... Add 14.
(H) More than 1,000,000................... Add 16.
(I) More than 3,000,000................... Add 18.
(J) More than 7,000,000................... Add 20.
(K) More than 12,000,000.................. Add 22.
(L) More than 20,000,000.................. Add 24.
(M) More than 40,000,000.................. Add 26.
(N) More than 80,000,000.................. Add 28''].
------------------------------------------------------------------------
Section 2B1.1 is amended by deleting (b)(3) in its entirety and
inserting in lieu thereof:
``If sophisticated means were used to impede discovery of the
offense or its extent, increase by 2 levels. If the resulting offense
level is less than level 12, increase to level 12.''
Section 2B1.1 is amended by deleting (b)(4)(A) in its entirety and
by amending (b)(4)(B) by deleting ``(B)'' and by deleting and changing
``4 levels'' to ``2 levels''.
* * * * *.
Option Three Only
[Section 2F1.1(a) is amended by deleting ``6'' and inserting in
lieu thereof ``8''].
Section 2F1.1 is amended by deleting (b)(1) in its entirety, and
inserting in lieu thereof, one of the following three options:
Option One
[``(b) Specific Offense Characteristics.
(1) If the loss was $5,000 or more, increase the offense level as
follows:
[[Page 171]]
------------------------------------------------------------------------
Loss (apply the greatest) Increase in level
------------------------------------------------------------------------
(A) $5,000 or more........................ Add 2.
(B) 10,000 or more........................ Add 4.
(C) 22,500 or more........................ Add 6.
(D) 50,000 or more........................ Add 8.
(E) 120,000 or more....................... Add 10.
(F) 275,000 or more....................... Add 12.
(G) 650,000 or more....................... Add 14.
(H) 1,500,000 or more..................... Add 16.
(I) 3,500,000 or more..................... Add 18.
(J) 8,000,000 or more..................... Add 20.
(K) 18,000,000 or more.................... Add 22.
(L) 40,000,000 or more.................... Add 24.
(M) 90,000,000 or more.................... Add 26''].
------------------------------------------------------------------------
Option Two
[``(b) Specific Offense Characteristics.
(1) If the loss exceeded $2,000, increase the offense level as
follows:
------------------------------------------------------------------------
Loss (apply the greatest) Increase in level
------------------------------------------------------------------------
(A) More than $2,000...................... Add 2.
(B) More than 5,000....................... Add 4.
(C) More than 10,000...................... Add 5.
(D) More than 20,000...................... Add 6.
(E) More than 40,000...................... Add 7.
(F) More than 70,000...................... Add 8.
(G) More than 120,000..................... Add 9.
(H) More than 200,000..................... Add 10.
(I) More than 350,000..................... Add 11.
(J) More than 500,000..................... Add 12.
(K) More than 800,000..................... Add 13.
(L) More than 1,500,000................... Add 14.
(M) More than 2,500,000................... Add 15.
(N) More than 5,000,000................... Add 16.
(O) More than 7,500,000................... Add 18.
(P) More than 15,000,000.................. Add 20.
(Q) More than 25,000,000.................. Add 22.
(R) More than 50,000,000.................. Add 24''].
------------------------------------------------------------------------
Option Three
[``(b) Specific Offense Characteristics
(1) If the loss exceeded $5,000, increase the offense level as
follows:
------------------------------------------------------------------------
Loss (apply the greatest) Level of increase
------------------------------------------------------------------------
(A) More than $5,000...................... Add 2.
(B) More than 20,000...................... Add 4.
(C) More than 60,000...................... Add 6.
(D) More than 100,000..................... Add 8.
(E) More than 250,000..................... Add 10.
(F) More than 500,000..................... Add 12.
(G) More than 750,000..................... Add 14.
(H) More than 1,000,000................... Add 16.
(I) More than 3,000,000................... Add 18.
(J) More than 7,000,000................... Add 20.
(K) More than 12,000,000.................. Add 22.
(L) More than 20,000,000.................. Add 24.
(M) More than 40,000,000.................. Add 26.
(N) More than 80,000,000.................. Add 28''].
------------------------------------------------------------------------
* * * * *
Section 2F1.1 is amended by deleting (b)(5) in its entirety, and by
deleting (b)(2) in its entirety, and inserting in lieu thereof:
``If sophisticated means were used to impede discovery of the
offense or its extent, increase by 2 levels. If the resulting offense
level is less than level 12, increase to level 12.''
Section 2F1.1 is amended by inserting the following:
``(6) If the offense involved telemarketing, increase by 2 levels.
(7) If the offense [involved telemarketing conduct and either]
victimized 10 or more persons over the age of 55, or targeted persons
over the age of 55, increase by 2 levels.''
Section 2F1.1 is amended by adding the following cross reference as
(c)(2):
``(2) If the offense involved arson or property destruction by use
of explosives, apply Sec. 2K1.4 (Arson, Property Damage by Use of
Explosives), if the resulting offense level is greater than that
determined above.''
* * * * *
Section 2T1.1 is amended by deleting (b)(5) in its entirety and
inserting in lieu thereof:
``If sophisticated means were used to impede discovery of the
offense or its extent, increase by 2 levels. If the resulting offense
level is less than level 12, increase to level 12.''
Section 2T4.1 is amended by deleting the tax table, and inserting
in lieu thereof, one of the following two options:
Option One
------------------------------------------------------------------------
[``Tax Loss Level
------------------------------------------------------------------------
(A) $5,000 or more............................................. 8
(B) 10,000 or more............................................. 10
(C) 22,500 or more............................................. 12
(D) 50,000 or more............................................. 14
(E) 120,000 or more............................................ 16
(F) 275,000 or more............................................ 18
(G) 650,000 or more............................................ 20
(H) 1,500,000 or more.......................................... 22
(I) 3,500,000 or more.......................................... 24
(J) 8,000,000 or more.......................................... 26
(K) 18,000,000 or more......................................... 28
(L) 40,000,000 or more......................................... 30
(M) 90,000,000 or more......................................... 32'']
------------------------------------------------------------------------
Option Two
------------------------------------------------------------------------
[``Tax Loss (apply the greatest) Level
------------------------------------------------------------------------
(A) $2,000 or less............................................. 8
(B) More than 2,000............................................ 9
(C) More than 5,000............................................ 10
(D) More than 10,000........................................... 11
(E) More than 20,000........................................... 12
(F) More than 40,000........................................... 13
(G) More than 70,000........................................... 14
(H) More than 120,000.......................................... 15
(I) More than 200,000.......................................... 16
(J) More than 350,000.......................................... 17
(K) More than 500,000.......................................... 18
(L) More than 800,000.......................................... 19
(M) More than 1,500,000........................................ 20
(N) More than 2,500,000........................................ 21
(O) More than 5,000,000........................................ 22
(P) More than 7,500,000........................................ 24
(Q) More than 15,000,000....................................... 26
(R) More than 25,000,000....................................... 28
(S) More than 50,000,000....................................... 30'']
------------------------------------------------------------------------
Issues for Comment
The following issues for comment are provided to facilitate
informed comment on the issues raised by the preceding amendment.
(1) Loss Tables: In addition to requesting input on the options in
the proposed amendment, the Commission requests comment on whether
Secs. 2B1.1 and 2F1.1 should have different base offense levels and
different starting points and cutting points for the loss tables. If
so, the Commission requests comment on what the respective base offense
levels should be (for example, level 6 for Sec. 2B1.1 and level 8 for
Sec. 2F1.1), on what loss amount should trigger the first increase
($2,000, $5,000, or $10,000 for Sec. 2B1.1; $2,000, $5,000, $10,000, or
$20,000 for Sec. 2F1.1), and what the cutting points of the loss tables
should be.
(2) Telemarketing offenses: In addition to the issues raised by the
proposed amendment, the Commission invites comment on whether the
guidelines should provide a broader enhancement for other frauds
involving the victimization or targeting of persons over the age of 55.
The Commission also invites comment on whether the guidelines should be
amended to add a Chapter Three adjustment that provides a two-level
increase if the offense, regardless of type, involves the victimization
of 10 or more persons over the age of 55 or the targeting of persons
over the age of 55. Alternatively, the Commission invites comment on
whether Sec. 3A1.1 (Vulnerable Victim) should be amended to provide
that it will always apply when an offense involves the victimization of
10 or more persons over the age of 55 or the targeting of persons over
the age of 55, or to provide an enhancement for offenses involving
telemarketing conduct.
(3) Cross Reference: The Commission invites comment on whether the
following cross reference should be adopted: ``If the offense involved
a bribe, gratuity, commercial bribe or kickback, or similar conduct,
apply Sec. 2C1.2 (Offering, Giving, Soliciting, or Receiving a
Gratuity); Sec. 2C1.5 (Payment to Obtain Public Office); Sec. 2C1.6
(Loan or Gratuity to Bank Examiner, or Gratuity for Adjustment of Farm
Indebtedness, or Procuring Bank Loan, or Discount of Commercial Paper);
Sec. 2C1.7 (Fraud Involving Deprivation of
[[Page 172]]
the Intangible Right to the Honest Services of Public Officials;
Conspiracy to Defraud by Interference with Governmental Functions); or
Sec. 2B4.1 (Bribery in Procurement of Bank Loan and Other Commercial
Bribery), whichever is the most applicable, would provide that the
cross reference should apply only if the listed offense conduct results
in a higher offense level.''
(4) Consolidation of Secs. 2B1.1 and 2F1.1: Currently there is
sometimes confusion about whether a given offense should be sentenced
using Sec. 2B1.1 or Sec. 2F1.1 and which definition of loss should be
used. The Commission invites comment on whether Secs. 2B1.1 and 2F1.1
should be consolidated into one guideline and, if so, what provisions
of each should be retained in the consolidated guideline, and how the
two definitions of loss should be combined into one. Alternatively, the
Commission invites comment on whether the definitions of loss in
Secs. 2B1.1 and 2F1.1 should be combined into one definition and, if
so, what provisions of each should be retained in the consolidated
definition and how the new definition should be worded.
Additional Issues for Comment--Determination of Loss
These issues for comment solicit input on possible changes to the
definition of loss in Secs. 2B1.1 and 2F1.1 to clarify the Commission's
intent, resolve issues raised by case law, and aid in consistency of
application.
(1) Standard of causation: Currently, the definition of loss in
Sec. 2F1.1 does not specify a standard of causation governing whether
unintended or unexpected losses are to be included in the loss
calculation under the guidelines. See United States v. Neadle, 72 F.3d
1104, 1108-11 (3d Cir.) (holding defendant fraudulently posted required
$750,000 bond to open insurance company accountable for $23 million in
property damage from a hurricane that the defendant's insurance company
lacked the assets to cover, loss undoubtedly would have gone
unreimbursed regardless of defendant's insurance fraud), amended, 79
F.3d 14 (3d Cir.), cert. denied, 117 S. Ct. 238 (1996).
The Commission invites comment on whether to clarify the standard
of causation necessary to link a harm with an offense under
Sec. 1B1.3(a)(3). More specifically, the Commission requests comment on
whether it should include only harm proximately caused (or directly
caused) by the defendant's conduct, or whether it should include all
harm that would not have occurred ``but for'' the defendant's conduct.
Finally, the Commission invites comment on whether, regardless of which
causation standard is adopted, the Commission should invite the
possibility of a departure when losses far exceed those intended or
reasonably foreseen by the defendant.
(2) Market value: The current definition of loss in theft and fraud
uses the concept of market value as an important factor in determining
loss. The Commission invites comment on whether this concept should be
clarified to specify whether retail, wholesale, or black market value
is intended, depending on the nature of the offense. In addition, the
Commission invites comment on whether market value includes the
enhanced value on the black market when it exceeds fair market value,
or alternatively, whether black market value should be a departure
consideration.
(3) Consequential damages and administrative costs--inclusion of
interest: The definition of loss in fraud provides that reasonably
foreseeable consequential damages and administrative costs are included
in determinations of loss only in cases involving procurement fraud or
product substitution. The Commission invites comment on whether
consequential damages should be used in determinations of loss in all
theft and/or fraud cases, and if so, how such damages should be
determined. Alternatively, should the special rule in fraud on the
inclusion of consequential damages and administrative costs in loss
determinations in procurement fraud and product substitution cases be
deleted? The Commission further invites comment on whether, even if
consequential damages, generally, are not included in loss, they might
be used as an offset against the value of the benefit received by the
victim(s).
Although the definition of loss in the theft and fraud guidelines
excludes interest ``that could have been earned had the funds not been
stolen,'' some courts have interpreted the definition of loss to permit
inclusion in loss of the interest that the defendant agreed to pay in
connection with the offense. Cf., United States v. Hoyle, 33 F.3d 415,
419 (4th Cir. 1994) (``[I]nterest shall not be included to determine
loss for sentencing purposes.'') with United States v. Gilberg, 75 F.3d
15, 18-19 (1st Cir. 1996) (including in loss interest on fraudulently
procured mortgage loan); and United States v. Henderson, 19 F.3d 917,
928-29 (5th Cir.) (``Interest should be included if, as here, the
victim had a reasonable expectation of receiving interest from the
transaction.''), cert. denied, 115 S. Ct. 207 (1994).
The Commission invites comment on whether the definition of loss
should be clarified to (A) exclude all interest from loss; (B) to
permit inclusion of bargained-for interest, or (C) to allow
consideration of bargained-for interest as a departure factor only.
(4) Benefit received by victims: Currently, with the exception of
payments made and collateral pledged in fraudulent loan cases, the
definition of loss does not specify whether benefit received by the
victim(s) reduces the amount of the loss. Courts have generally,
although not unanimously, held that loss in fraud cases must be reduced
by any benefits received by the victim(s). See, e.g.,United States v.
Maurello, 76 F.3d 1304, 1311-12 (3d Cir. 1996) (calculating loss by
subtracting value of satisfactory legal services from amount of fees
paid to bogus lawyer); United States v. Reddeck, 22 F.3d 1504, 1513
(10th Cir. 1994) (reducing loss by value of education received from
bogus university); United States v. Mucciante, 21 F. 3d 1228, 1237-38
(2d Cir.) (refusing to reduce loss by amount that defendant ``repaid *
* * as part of a meretricious effort to maintain [the victims']
confidences'' in a non-Ponzi scheme), cert. denied 115 S. Ct. 361
(1994).
A Ponzi scheme is a particular kind of criminal offense that may
warrant explicit treatment in the definition of loss. A Ponzi scheme is
defined as ``a fraudulent investment scheme in which money placed by
later investors pays artificially high dividends to the original
investors, thereby attracting even larger investments.'' Bryan A.
Garner, A Dictionary of Modern Legal Usage 671 (2d ed. 1995). Several
cases raise some important issues about Ponzi schemes.
The Seventh Circuit was the first to address the issue of
calculating loss from a Ponzi scheme. In United States v. Holiusa, 13
F.3d 1043, 1044-45 (6th Cir. 1994), the defendant perpetuated a Ponzi
scheme by appropriating $11,625,739 from ``investors'' and returning
approximately $8,000,000 in ``interest.'' The appellate court rejected
the district court holding that because the defendant intended ``to
defraud all of the victims of their money'' he was accountable for the
full $11,625,739. Id. at 1045; see also U.S.S.G. Sec. 2F1.1, comment.
(n. 7) (``[I]f an intended loss that the defendant was attempting to
inflict can be determined, this figure will be used if it is greater
than the actual loss.''). The court held that ``[t]he full amount
invested was not the probable or intended loss because [the defendant]
did not at any point intend
[[Page 173]]
to keep the entire sum. * * * Because he did not intend to and did not
keep the full $11.6 million, that amount does not reflect the actual or
intended loss, and is not an appropriate basis for sentencing.''
Holiusa, 13 F.3d at 1046-47. The court remanded the case, instructing
the district court not to include in loss ``amounts that [the
defendant] both intended to and indeed did return to investors.'' Id.
at 1048; see also United States v. Wolfe, 71 F.3d 611, 618 (6th Cir.
1995) (following Holiusa).
While the Seventh Circuit saw the concept of intended loss as the
focus of Ponzi scheme loss calculation, the Eleventh Circuit took a
different approach in United States v. Orton, 73 F.3d 331 (11th Cir.
1996). The Orton defendant had received $525,865.66 from and returned
$242,513.65 to the ``investors.'' Twelve investors received more than
they had invested; the total lost by the other investors was
$391,540.01. Id. at 333. The Eleventh Circuit adopted what it dubbed
the ``loss to losing victims'' method: it held the defendant
accountable for ``the net losses of all victims who lost all or part of
the money they invested.'' Id. at 334. The money that the defendant
received from and returned to those investors who ended up with a net
gain did not enter into the loss calculation. The Orton defendant was
therefore held accountable for $391,540.01.
The Commission invites comment on whether the value of the benefit
received by the victim(s) of an offense should be used to reduce the
amount of the loss and, if so, how benefits that are more theoretical
than real should be valued. The Commission also invites comment on
whether the money returned to victim-investors (including ``profits'')
in a Ponzi scheme should be included in the calculation of loss. In
addition, the Commission invites comment on whether in cases involving
fraudulent representations of a defendant's professional license or
training, the loss should be reduced by the value of the ``benefit/
service'' given to the victim (or to someone else on the victim's
behalf) by the defendant, or whether it should be determined based on
the full charge for the ``service.''
(5) Diversion of government benefits: The Commission invites
comment on how loss should be determined in fraud cases involving the
diversion of government program benefits and kickbacks. These cases
tend to present special difficulties in determining or estimating loss
and determining gain. At the same time, there is a strong societal
interest in the integrity of government programs. More specifically,
the Commission invites comment on whether the ``value of benefits
diverted'' in such cases should be reduced by the ``benefits'' or
services provided by the participants. In addition, the Commission
invites comment on whether special rules should be devised for such
cases to facilitate the determination/estimation of loss or gain, such
as a special rule that determines loss or gain based on a percentage of
the total value of the benefits diverted and, if so, what percentage
should be chosen (such as 5-40%). The Commission also invites comment
on whether the nature and seriousness of such offenses require a
specific offense characteristic to target such conduct and/or a floor
offense level to guarantee a minimum offense level.
(6) Pledged collateral and payments: Currently, the value of
pledged collateral is determined based on the net proceeds of the sale
of the collateral, or if the sale has not been accomplished prior to
sentencing, then the market value of the collateral reduced by the
expected cost of the sale. See, e.g., United States v. Barrett, 51 F.3d
86, 90-91 (7th Cir. 1995) (including in loss the drop in value of
property securing fraudulently obtained loans). The Commission invites
comment on how and when to determine loss in respect to crediting
pledged collateral and payments. More specifically, the Commission
invites comment on whether to clarify the current rule that only
payments made prior to discovery of the offense are to be credited in
determining loss, whether to clarify or change the current rule that
provides that the value of the pledged collateral is determined by the
amount the lending institution has recovered or can expect to recover,
and whether to clarify what constitutes ``discovery of the offense.''
In addition, the Commission invites comment on whether the value of the
pledged collateral should be determined at the time it is pledged or at
the time of discovery of the offense, or some other time. In addition,
the Commission invites comment on whether unforeseen (or unforeseeable)
decreases (or increases) in the value of the collateral should affect
the credit to be used to determine loss.
(7) Gain: Currently gain can be used in lieu of loss in certain
limited circumstances under Sec. 2F1.1. Compare United States v. Kopp,
951 F.2d 521, 530 (3d Cir. 1991) (holding that gain cannot be used if
loss is measurable even if loss is zero), with United States v.
Haddock, 12 F.3d 950, 960 (10th Cir. 1993) (allowing gain to be used as
alternative at all times). The Commission invites comment on whether to
clarify the issue of whether or not gain may be used in lieu of loss.
If the rule should be clarified, should upward departures be encouraged
if the amount of gain substantially exceeds loss? Alternatively, the
Commission invites comment on whether gain should be used whenever it
is greater than actual or intended loss and, if so, how gain should be
determined. The Commission also invites comment on whether there are
situations in which gain should be used for theft-type cases under
Sec. 2B1.1.
(8) Intended loss: Intended loss is to be used in fraud cases when
it is determined to be greater than actual loss. Sec. 2F1.1, comment.
(n. 7). Some courts have held that intended loss should be limited by
concepts of ``economic reality'' or impossibility. Compare United
States v. Moored, 38 F.3d 1419, 1425 (6th Cir. 1994) (focusing on loss
that defendant ``realistically intended'') with United States v.
Lorenzo, 995 F.2d 1448, 1460 (9th Cir.) (``[T]he amount of [intended]
loss * * * does not have to be realistic.''), cert. denied, 510 U.S.
881 (1993).
The Commission invites comment on whether the current rule should
be changed to provide that loss is to be based primarily on actual
loss, with intended loss available only as a possible ground for
departure. The Commission further invites comment on whether, if the
substance of the current rule is to be retained, the magnitude of
intended loss should be limited by the amount that the defendant
realistically could have succeeded in obtaining. More specifically, the
Commission invites comment on whether intended loss should be limited
by concepts of ``economic reality'' or impossibility, such as in a
government sting operation where there can be no loss, or in a false
insurance claims case in which the defendant submits a claim for an
amount in excess of the fair market value of the item.
(9) Risk of loss: Currently, in some cases defendants obtain loans
by fraudulent means but the loss is determined to be zero because of
pledged collateral and payments made prior to discovery. The Commission
invites comment on whether the definition of loss should be revised to
include the concept of risk of loss, so as to ensure higher punishment
levels for defendants who commit serious crimes that, because of the
value of pledged collateral or payments made before discovery, result
in low or even zero loss, and if so, how the risk of loss might be
determined. See Sec. 2F1.1, comment. (n. 7).
[[Page 174]]
(10) Loss amounts that over- or understate the significance of the
offense: The Commission invites comment on whether to provide guidance
for applying the current provision allowing departure where the loss
amount over- or understates the significance of the offense. See
Sec. 2F1.1, comment. (n. 10). More specifically, the Commission invites
comment on whether to specify that where the loss amount included
through Sec. 1B1.3 (Relevant Conduct) is far in excess of the benefit
personally derived by the defendant, the court might depart down to an
offense level corresponding to the loss amount that more appropriately
measures the defendant's culpability. Alternatively, the Commission
invites comment on whether to provide a specific offense characteristic
or special rule to reduce the offense level in such cases.
Chapter Two, Part M
19(A). Issue for comment: Section 511 of the Antiterrorism and
Effective Death Penalty Act of 1996 pertains to biological weapons. It
incorporates attempt and conspiracy into 18 U.S.C. Sec. 175, which
prohibits the production, stockpiling, transferring, acquiring,
retaining, or possession of biological weapons. It also expands the
scope of biological weapons provisions in chapter 10 of title 18 by
expanding the meaning of biological agents.
Section 521 creates a new offense at 18 U.S.C. Sec. 2332c. The new
offense smakes it unlawful for a person, without lawful authority, to
use (or attempt or conspire to use) a chemical weapon against a United
States national outside the United States, any person within the United
States, or any federal property. The penalty is any term of years or
life or, if death results, death or any term of years or life.
The Commission invites comment as to how the guidelines could be
amended to include these statutes. One approach could be to amend
Sec. 2M6.1 (Unlawful Acquisition, Alteration, Use, Transfer, or
Possession of Nuclear Material, Weapons, or Facilities) to include
these statutes. If the Commission were to select this approach, what
changes, if any, would be appropriate to accommodate these offenses?
(B) Issue for comment: Section 702 creates a new offense at 18
U.S.C. Sec. 2332b. The new offense makes it unlawful for a person,
committing conduct occurring outside the United States and conduct
occurring inside the United States and under specified circumstances,
to (1) kill, kidnap, maim, or commit an assault resulting in serious
bodily injury or with a dangerous weapon, or (2) create a substantial
risk of serious bodily injury to another person by damaging (or
conspiring to damage) any real or personal property within the United
States. The specified circumstances are using or obstructing interstate
or foreign commerce, having the federal government or one of its
employees or agents as a victim or intended victim, involving federal
property, and committing the offense in the territorial sea of the
United States or within the special maritime or territorial
jurisdiction of the United States.
The terms of imprisonment under the new offense are (1) death, or
life, or any term of years, if death resulted; (2) any term of years,
for kidnaping; (3) not more than 35 years, for maiming; (4) not more
than 30 years, for assault; (5) not more than 25 years, for damaging or
destroying property; (6) for any term of years not exceeding that which
would have applied if the offense had been committed, for a conspiracy;
and (7) not more than 10 years, for threatening to commit any such
offense.
The provision also expressly precludes the imposition of a term of
probation for any of the above-described offenses and precludes the
imposition of concurrent sentences for terms of imprisonment imposed
under this section with any other terms of imprisonment.
The Commission invites comment on how the guidelines should be
amended to include this statute. For example, one option could be to
amend the statutory index to reference the statute to the guideline for
each of the underlying offenses.
Section 2X3.1 Accessory After the Fact
Section 2X4.1 Misprision of Felony
20. Synopsis of Proposed Amendment: This is a three-part amendment.
First, this amendment clarifies the application of Sec. 2X3.1 when this
guideline is used as the result of a cross reference.
Second, this amendment clarifies the interaction of Sec. 1B1.3
(Relevant Conduct) with Secs. 2X3.1 (Accessory After the Fact) and
2X4.1 (Misprision of Felony). In the case of a guideline with
alternative base offense levels, as opposed to one base offense level
and one or more specific offense characteristics, the question has
arisen as to whether the knowledge requirement set forth in Application
Note 1 applies to the selection of the appropriate base offense level.
Consistent with Sec. 1B1.3, this amendment clarifies that the knowledge
requirement does apply.
Finally, this amendment clarifies that, for purposes of Secs. 2X3.1
and 2X4.1, if the offense guideline applicable to the underlying
offense refers to the defendant, such reference is to the defendant who
committed the underlying offense, not to the defendant who is convicted
of being an accessory or to the defendant who committed the misprision.
Proposed Amendment: The Commentary to Sec. 2X3.1 captioned
``Application Notes'' is amended in Note 1 by deleting:
``Apply the base offense level plus any applicable specific offense
characteristics that were known, or reasonably should have been known,
by the defendant; see Application Note 10 of the Commentary to
Sec. 1B1.3 (Relevant Conduct).'',
And inserting in lieu thereof:
``However, if the application of Sec. 2X3.1 results from a cross
reference or other instruction in another Chapter Two offense guideline
(e.g., Secs. 2J1.2(c)(1), 2J1.3(c)(1)), the underlying offense is the
offense determined by that cross reference or instruction. Determine
the offense level (base offense level, specific offense
characteristics, and cross references) based on the conduct that was
known, or reasonably should have been known, by the defendant; see
Application Note 10 of the Commentary to Sec. 1B1.3 (Relevant Conduct).
In addition, if the Chapter Two offense guideline applicable to the
underlying offense refers to the defendant, such reference is to the
defendant who committed the underlying offense, not to the defendant
who is convicted of being an accessory or to whom this section applies
due to a cross reference or other instruction in another Chapter Two
offense guideline.''.
The Commentary to Sec. 2X4.1 captioned ``Application Notes'' is
amended in Note 1 by deleting ``Apply the base offense level plus any
applicable specific offense characteristics that were'' and inserting
in lieu thereof ``Determine the offense level (base offense level,
specific offense characteristics, and cross references) based on the
conduct that was''; and by inserting at the end the following as the
last sentence:
``In addition, if the Chapter Two offense guideline applicable to
the underlying offense refers to the defendant, such reference is to
the defendant who committed the underlying offense, not to the
defendant who is convicted of committing the misprision or to whom this
section applies due to a cross reference or other instruction in
another Chapter Two offense guideline.''.
[[Page 175]]
Part B--Role in the Offense
Introductory Commentary, Sec. 3B1.1 (Aggravating Role)
21. Synopsis of Proposed Amendment: This two-part amendment (A)
revises the Introductory Commentary to Chapter Three, Part B to put the
application of Secs. 3B1.1 (Aggravating Role) and 3B1.2 (Mitigating
Role) in perspective and show the relationship among these adjustments,
and (B) revises Sec. 3B1.1. Options 1 and 2 of Part B maintain the
current structure of Sec. 3B1.1 but revise the guideline to provide
clearer definitions and cure a significant anomaly in the current
guideline structure. Option 3 presents an alternative structure similar
to the proposed amendment to Sec. 3B1.2.
Following the amendment to Sec. 3B1.2 are several issues for
comment designed to elicit suggestions for alternative approaches.
(A) Proposed Amendment: Chapter 3, Part B--Role in the Offense is
amended in the first sentence of the Introductory Commentary by
inserting ``whether, in committing the offense,'' immediately following
``based upon'';
By deleting ``role the'' immediately before ``defendant'';
By inserting ``(A)'' immediately following ``defendant'';
By deleting ``in committing the offense'' and inserting in lieu
thereof ``an aggravating or a mitigating role, (B) abused a position of
trust or used a special skill, or (C) used a minor''.
Chapter 3, Part B--Role in the Offense is amended in the second
sentence of the Introductory Commentary by deleting ``The determination
of a defendant's role in the offense'' and inserting in lieu thereof
``Each of these determinations'';
By deleting ``all'' and inserting in lieu thereof ``the'';
By deleting ``within the scope of'' and inserting in lieu thereof
``for which the defendant is accountable under'';
And by deleting the ``,'' immediately following ``(Relevant
Conduct)'' and inserting in lieu thereof a ``;''.
Chapter 3, Part B--Role in the Offense is amended in the
Introductory Commentary by deleting the second paragraph in its
entirety and inserting in lieu thereof the following:
Sections 3B1.1 (Aggravating Role) and 3B1.2 (Mitigating Role) are
designed to provide appropriate adjustments in the defendant's offense
level based on the defendant's role and relative culpability in the
offense conduct for which the defendant is accountable under Sec. 1B1.3
(Relevant Conduct). For Sec. 3B1.1 (Aggravating Role) or Sec. 3B1.2
(Mitigating Role) to apply, the offense must involve the defendant and
at least one other participant. If an offense has only one participant,
neither Sec. 3B1.1 nor Sec. 3B1.2 will apply. In some cases, some
participants may warrant an upward adjustment under Sec. 3B1.1, other
participants may warrant a downward adjustment under Sec. 3B1.2, and
still other participants may warrant no role adjustment.''.
(B) Proposed Amendment:
Option 1:
Section Sec. 3B1.1 is amended by deleting ``follows:'' and
inserting in lieu thereof ``follows (Apply the Greatest):''.
Section Sec. 3B1.1(a) is amended by deleting ``a criminal activity
that involved five or more participants or
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