[Federal Register Volume 63, Number 229 (Monday, November 30, 1998)]
[Notices]
[Pages 65980-65993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-31756]
[[Page 65979]]
_______________________________________________________________________
Part VI
United States Sentencing Commission
_______________________________________________________________________
Sentencing Guidelines for United States Courts; Notice
Federal Register / Vol. 63, No. 229 / Monday, November 30, 1998 /
Notices
[[Page 65980]]
UNITED STATES SENTENCING COMMISSION
Sentencing Guidelines for United States Courts
AGENCY: United States Sentencing Commission.
ACTION: Notice of intent to re-promulgate temporary, emergency
amendment as permanent amendment; and other proposed amendments to
sentencing guidelines, policy statements, and commentary. Request for
public comment.
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SUMMARY: Pursuant to section 994(a), (o), and (p) of title 28, United
States Code, and certain other provisions of law, the Commission is
considering promulgating amendments to the sentencing guidelines,
policy statements, and commentary. This notice sets forth the proposed
amendments and, for each proposed amendment, a synopsis of the issues
addressed by that amendment. The Commission seeks comment on the
proposed amendments, alternative proposed amendments, and any other
aspect of the sentencing guidelines, policy statements, and commentary.
The Commission may submit amendments to the Congress not later than May
1, 1999.
Part I sets out the Commission's proposed re-promulgation of a
telemarketing fraud amendment as a permanent amendment. On September
23, 1998, the Commission submitted this telemarketing fraud amendment
to Congress as a temporary, emergency amendment in response to the
Telemarketing Fraud Protection Act of 1998, Pub. L. 105-184.
Part II sets out a proposed ``Economic Crime Package.'' The
Economic Crime Package developed from the Commission's work in the past
two years to examine the sufficiency of guidelines covering certain
economic crimes, particularly fraud, theft, and tax offenses. The
primary focus of this examination has been: (1) To develop a loss table
that incorporates the more-than-minimal-planning enhancement and
increases sentence severity for large-dollar loss offenses; (2) to
develop a loss definition that, among other things, is more consistent
across offense types and easier to use; (3) to consolidate the theft,
property destruction, and fraud guidelines in order to provide
uniformity of applicable commentary; and (4) to make necessary
conforming changes to all other guidelines that refer to the fraud and
theft loss tables.
Recent highlights of the Commission's work in this area include (1)
soliciting, in January 1998, public comment on various amendment
proposals and issues for comment (see 63 FR 602-25); (2) conducting, in
March 1998, two public hearings, one of which (in San Francisco,
California) was dedicated exclusively to economic crimes; (3)
Commissioner consideration, in April 1998, of an ``economic crime
package'' of amendments to the sentencing guidelines; and (4)
conducting field testing, in the summer of 1998, of the proposed loss
definition with the Criminal Law Committee of the Judicial Conference,
probation officers, and other guideline users.
The Economic Crime Package primarily is composed of the following:
(1) The Theft, Property Destruction, and Fraud Package; (2) the Tax
Package; (3) More than Minimal Planning Conforming Amendments; (4)
Amendments for Referring Guidelines; and (5) Other Technical and
Conforming Amendments. The proposed amendments in this part are
presented 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, in a case in which the Commission is
considering whether a particular enhancement should provide only a
minimum offense level or a minimum offense level with an additional
two-level increase, each option would appear in bracketed text. Second,
the Commission has highlighted certain issues for comment and invites
suggestions for specific guideline language.
Part III proposes to make certain amendments to the probation and
supervised release guidelines that are consistent with recently enacted
legislation.
Finally, Part IV presents several issues for which the Commission
requests public comment.
DATES: The Commission will announce at a later date the deadline for
public comment on these proposed amendments and issues for comment, and
the date for any public hearing(s) that may be scheduled.
ADDRESSES: Public comment should be sent to: United States Sentencing
Commission, One Columbus Circle, NE, Suite 2-500, Washington, DC 20002-
8002, Attention: Public Information.
FOR FURTHER INFORMATION CONTACT: Michael Courlander, Public Affairs
Officer, Telephone: (202) 273-4590.
SUPPLEMENTARY INFORMATION: The United States Sentencing Commission is
an independent agency in the judicial branch of the United States
Government. The Commission promulgates sentencing guidelines and policy
statements for federal sentencing courts pursuant to 28 U.S.C. 994(a).
The Commission also periodically reviews and revises previously
promulgated guidelines pursuant to 28 U.S.C. 994(o) and submits
guideline amendments to the Congress not later than the first day of
May each year, pursuant to 28 U.S.C. 994(p).
(Note: The publication of these proposed amendments and issues
for comment was approved before October 21, 1998.)
Authority: 28 U.S.C. 994(a), (o), (p), (x); Pub. L. 105-184,
section 6, June 23, 1998, 112 Stat. 520.
Richard P. Conaboy,
Chairman.
Part I--Notice of Proposed Re-Promulgation of Telemarketing Fraud
Amendment as Permanent Amendment
1. Synopsis of Proposed Amendment: On September 23, 1998, in
response to directives contained in the Telemarketing Fraud Protection
Act of 1998, Pub. L. 105-184, the Commission submitted to Congress a
temporary, emergency amendment that provided (1) a two-level increase
and a minimum offense level of level 12 in the fraud guideline
(Sec. 2F1.1) for offenses that involve sophisticated means; and (2) a
two-level increase in the vulnerable victim guideline (Sec. 3A1.1) for
offenses that involve a large number of vulnerable victims. The
amendment, particularly the sophisticated means enhancement, built upon
and broadened an amendment submitted to Congress on May 1, 1998, which
created an enhancement in Sec. 2F1.1 for sophisticated concealment. The
Commission specified an effective date of November 1, 1998 for the
emergency amendment.
The Commission proposes to re-promulgate this amendment as a
permanent, non-emergency amendment and submit it to Congress not later
than May 1, 1999. Under the terms of the congressionally granted
authority, the emergency amendment is temporary unless re-promulgated
in the next amendment cycle under regularly applicable amendment
procedures. See Pub. L. 100-182, Sec. 21, set forth as an editorial
note under 28 U.S.C. Sec. 994.
Proposed Amendment: Section 2F1.1(b) is amended by striking
[[Page 65981]]
subdivision (3) and all that follows through the end of the subsection
and inserting the following:
``(3) If the offense was committed through mass-marketing, increase
by 2 levels.
(4) If the offense involved (A) a misrepresentation that the
defendant was acting on behalf of a charitable, educational, religious
or political organization, or a government agency; or (B) violation of
any judicial or administrative order, injunction, decree, or process
not addressed elsewhere in the guidelines, increase by 2 levels. If the
resulting offense level is less than level 10, increase to level 10.
(5) If (A) the defendant relocated, or participated in relocating,
a fraudulent scheme to another jurisdiction to evade law enforcement or
regulatory officials; (B) a substantial part of a fraudulent scheme was
committed from outside the United States; or (C) the offense otherwise
involved sophisticated means, increase by 2 levels. If the resulting
offense level is less than level 12, increase to level 12.
(6) If the offense involved (A) the conscious or reckless risk of
serious bodily injury; or (B) possession of a dangerous weapon
(including a firearm) in connection with the offense, increase by 2
levels. If the resulting offense level is less than level 13, increase
to level 13.
(7) If the offense--
(A) substantially jeopardized the safety and soundness of a
financial institution; or
(B) affected a financial institution and the defendant derived more
than $1,000,000 in gross receipts from the offense,
increase by 4 levels. If the resulting offense level is less than level
24, increase to level 24.''.
The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is
amended by striking Application Note 14 and all that follows through
the end of the Application Notes and inserting the following:
``15. For purposes of subsection (b)(5)(B), `United States' means
each of the 50 states, the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands, Guam, the Northern
Mariana Islands, and American Samoa.
For purposes of subsection (b)(5)(C), `sophisticated means' means
especially complex or especially intricate offense conduct pertaining
to the execution or concealment of an offense. For example, in a
telemarketing scheme, locating the main office of the scheme in one
jurisdiction but locating soliciting operations in another jurisdiction
would ordinarily indicate sophisticated means. Conduct such as hiding
assets or transactions, or both, through the use of fictitious
entities, corporate shells, or offshore bank accounts also ordinarily
would indicate sophisticated means.
The enhancement for sophisticated means under subsection (b)(5)(C)
requires conduct that is significantly more complex or intricate than
the conduct that may form the basis for an enhancement for more than
minimal planning under subsection (b)(2)(A).
If the conduct that forms the basis for an enhancement under
subsection (b)(5) is the only conduct that forms the basis for an
adjustment under Sec. 3C1.1 (Obstruction of Justice), do not apply an
adjustment under Sec. 3C1.1.
16. `Financial institution,' as used in this guideline, is defined
to include any institution described in 18 U.S.C. Secs. 20, 656, 657,
1005-1007, and 1014; any state or foreign bank, trust company, credit
union, insurance company, investment company, mutual fund, savings
(building and loan) association, union or employee pension fund; any
health, medical or hospital insurance association; brokers and dealers
registered, or required to be registered, with the Securities and
Exchange Commission; futures commodity merchants and commodity pool
operators registered, or required to be registered, with the Commodity
Futures Trading Commission; and any similar entity, whether or not
insured by the federal government. `Union or employee pension fund' and
``any health, medical, or hospital insurance association,'' as used
above, primarily include large pension funds that serve many
individuals (e.g., pension funds of large national and international
organizations, unions, and corporations doing substantial interstate
business), and associations that undertake to provide pension,
disability, or other benefits (e.g., medical or hospitalization
insurance) to large numbers of persons.
17. An offense shall be deemed to have `substantially jeopardized
the safety and soundness of a financial institution' if, as a
consequence of the offense, the institution became insolvent;
substantially reduced benefits to pensioners or insureds; was unable on
demand to refund fully any deposit, payment, or investment; was so
depleted of its assets as to be forced to merge with another
institution in order to continue active operations; or was placed in
substantial jeopardy of any of the above.
18. `The defendant derived more than $1,000,000 in gross receipts
from the offense,' as used in subsection (b)(7)(B), generally means
that the gross receipts to the defendant individually, rather than to
all participants, exceeded $1,000,000. `Gross receipts from the
offense' includes all property, real or personal, tangible or
intangible, which is obtained directly or indirectly as a result of
such offense. See 18 U.S.C. Sec. 982(a)(4).
19. If the defendant is convicted under 18 U.S.C. Sec. 225
(relating to a continuing financial crimes enterprise), the offense
level is that applicable to the underlying series of offenses
comprising the `continuing financial crimes enterprise.'
20. If subsection (b)(7) (A) or (B) applies, there shall be a
rebuttable presumption that the offense involved `more than minimal
planning.''.
The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is
amended by redesignating Notes 3 through 13 as Notes 4 through 14,
respectively; and by inserting after Note 2 the following new Note 3:
``3. `Mass-marketing,' as used in subsection (b)(3), means a plan,
program, promotion, or campaign that is conducted through solicitation
by telephone, mail, the Internet, or other means to induce a large
number of persons to (A) purchase goods or services; (B) participate in
a contest or sweepstakes; or (C) invest for financial profit. The
enhancement would apply, for example, if the defendant conducted or
participated in a telemarketing campaign that solicited a large number
of individuals to purchase fraudulent life insurance policies.''.
The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is
amended in Note 1 by striking ``Sec. 2F1.1(b)(3)'' and inserting
``Sec. 2F1.1(b)(4)''; in redesignated Note 5 (formerly Note 4), by
striking ``(b)(3)(A)'' and inserting ``(b)(4)(A)''; and in redesignated
Note 6 (formerly Note 5), by striking ``(b)(3)(B)'' and inserting
``(b)(4)(B)''.
The Commentary to Sec. 2F1.1 captioned ``Background'' is amended by
inserting after the fifth paragraph the following new paragraph:
``Subsection (b)(5) implements, in a broader form, the instruction
to the Commission in section 6(c)(2) of Public Law 105-184.''.
Section 3A1.1(b) is amended to read as follows:
``(b)(1) If the defendant knew or should have known that a victim
of the offense was a vulnerable victim, increase by 2 levels.
(2) If (A) subdivision (1) applies; and (B) the offense involved a
large number of vulnerable victims, increase the offense level
determined under subdivision (1) by 2 additional levels.''.
[[Page 65982]]
The Commentary to Sec. 3A1.1 captioned ``Application Notes'' is
amended in Note 2 in the first paragraph by striking `` `victim'
includes any person'' before ``who is'' and inserting `` `vulnerable
victim' means a person (A)''; and by inserting after ``(Relevant
Conduct)'' the following:
``; and (B) who is unusually vulnerable due to age, physical or
mental condition, or who is otherwise particularly susceptible to the
criminal conduct''.
The Commentary to Sec. 3A1.1 captioned ``Application Notes'' is
amended in Note 2 in the second paragraph by striking ``where'' each
place it appears and inserting ``in which''.
The Commentary to Sec. 3A1.1 captioned ``Application Notes'' is
amended in Note 2 in the third paragraph by striking ``offense
guideline specifically incorporates this factor'' and inserting
``factor that makes the person a vulnerable victim is incorporated in
the offense guideline''.
The Commentary to Sec. 3A1.1 captioned ``Background'' is amended by
adding at the end the following additional paragraph:
``Subsection (b)(2) implements, in a broader form, the instruction
to the Commission in section 6(c)(3) of Public Law 105-184.''.
The Commentary to Sec. 2B5.1 captioned ``Application Notes'' is
amended in Note 1 by inserting ``United States'' before ``Virgin
Islands''.
Part II--The Economic Crime Package
In May, 1997, the Commission set as one of its priorities the
systematic study and analysis of the guidelines for fraud, theft, and
tax offenses. After approximately two years of data collection,
analyses, public comment, and public hearings, the Commission developed
a comprehensive ``Economic Crime Package''.
The Economic Crime Package is composed of the following: (A) The
Theft, Property Destruction, and Fraud Package; (B) the Tax Package;
(C) More than Minimal Planning Conforming Amendments; (D) Amendments
for Referring Guidelines; and (E) other technical and conforming
amendments.
In addition to seeking comment on the Economic Crime Package, the
Commission invites suggestions for options, other than those presented
in the Package, for treating theft, fraud, and tax offenses in the
guidelines.
(A) The Theft, Property Destruction, and Fraud Package
2. Synopsis of Proposed Amendment: The ``Theft, Property
Destruction, and Fraud Package'' has the following principal features:
(A) A consolidated theft, fraud, and property destruction guidelines;
(B) a new loss table for fraud and theft offenses, with more than
minimal planning ``built in''; and (C) a clarified loss definition.
The new consolidated guideline begins with a base offense level of
level 6. This base offense level has the effect of increasing the base
offense level for theft and property destruction cases. However, this
increase will be offset, for the most part, by a higher floor offense
level in the new loss table for these offenses. The current loss table
for theft and property destruction has its first offense level increase
at amounts exceeding $100, whereas the offense level increase in the
new loss table will begin at amounts exceeding $2000.
The proposed guideline also provides for a loss table that builds
more than minimal planning into the table, instead of maintaining this
factor as a separate two-level enhancement. The first level from the
former enhancement is built in at amounts exceeding $10,000; the second
level is built in at amounts exceeding $20,000. The proposed loss table
also provides an increase in offense level severity beginning at
amounts exceeding $40,000. Because more than minimal planning is built
into the loss table, the package also presents options for departure
language that would either prohibit or discourage a departure from the
guideline range based on more than minimal planning, or lack thereof.
The enhancement for sophisticated means is included in the
consolidated guideline based on the assumption that the enhancement,
promulgated as a temporary, emergency amendment effective November 1,
1998, will be re-promulgated as a permanent amendment during the next
amendment cycle. (See, Part I--Notice of Re-Promulgation of
Telemarketing Fraud Amendment as Permanent Amendment.) Other changes in
the guideline structure include (A) the addition of risk of death to
the risk of serious bodily injury enhancement and an increase in the
floor offense level from level 13 to level 14 in this enhancement; (B)
options for a floor offense level and offense level increase for the
gross receipts enhancement; and (C) options for a bribery cross
reference and other, general cross references.
The clarified loss definition begins with the general rule that
loss is the greater of actual loss or intended loss. The loss
definition also: (A) Defines ``actual loss,'' ``reasonably
foreseeable,'' and ``intended loss''; (B) provides flexibility in
determining the loss amount, giving consideration to a number of
factors; (C) provides that gain shall be used instead of loss if gain
is greater than loss and more accurately reflects the seriousness of
the offense; (D) provides rules for crediting amounts the defendant
paid back to the victim; (E) provides special rules relating to certain
kinds of cases, such as ``Ponzi'' schemes; (F) presents options on
whether interest can be considered in the loss calculation; and (G)
sets out upward and downward departure considerations.
Proposed Amendment: Strike the heading to Part B of Chapter Two,
the heading to Subpart 1 of Part B of Chapter Two, the Introductory
Commentary to such subpart, Secs. 2B1.1, 2B1.3, and 2F1.1, and insert
the following:
Part B--Basic Economic Offenses
1. Theft, Embezzlement, Receipt of Stolen Property, Property
Destruction, Fraud, and Insider Trading
Introductory Commentary
These sections address basic forms of property offenses: theft,
embezzlement, fraud, forgery, counterfeiting (other than offenses
involving altered or counterfeit bearer obligations of the United
States), insider trading, transactions in stolen goods, and simple
property damage or destruction. (Arson is dealt with separately in Part
K, Offenses Involving Public Safety.) These guidelines apply to
offenses prosecuted under a wide variety of federal statutes, as well
as offenses that arise under the Assimilative Crimes Act.
Sec. 2B1.1. Larceny, Embezzlement, and Other Forms of Theft;
Offenses Involving Stolen Property; Property Damage or Destruction;
Fraud and Deceit; Offenses Involving Altered or Counterfeit Instruments
Other than Counterfeit Bearer Obligations of the United States.
(a) Base Offense Level: 6.
(b) Specific Offense Characteristics.
(1) If the loss exceeded $2,000, increase the offense level as
follows:
------------------------------------------------------------------------
Loss (apply the greatest) Increase in level
------------------------------------------------------------------------
(A) More than $2,000....................... Add 1.
(B) More than $5,000....................... Add 2.
(C) More than $10,000...................... Add 4.
(D) More than $20,000...................... Add 6.
(E) More than $40,000...................... Add 8.
(F) More than $80,000...................... Add 10.
(G) More than $200,000..................... Add 12.
(H) More than $500,000..................... Add 14.
(I) More than $1,200,000................... Add 16.
(J) More than $2,500,000................... Add 18.
(K) More than $7,500,000................... Add 20.
(L) More than $20,000,000.................. Add 22.
(M) More than $50,000,000.................. Add 24.
[[Page 65983]]
(N) More than $100,000,000................. Add 26.
------------------------------------------------------------------------
(2) If the offense involved theft from the person of another,
increase by 2 levels.
(3) If the offense involved receiving stolen property, and the
defendant was a person in the business of receiving and selling stolen
property, increase by 2 levels.
(4) If the offense involved misappropriation of a trade secret and
the defendant knew or intended that the offense would benefit a foreign
government, foreign instrumentality, or foreign agent, increase by 2
levels.
(5) If the offense was committed through mass-marketing, increase
by 2 levels.
(6) If (A) the offense involved theft of property from a national
cemetery; or (B) property of a national cemetery was damaged or
destroyed, increase by 2 levels.
(7) If the offense involved (A) a misrepresentation that the
defendant was acting on behalf of a charitable, educational, religious,
or political organization, or a government agency; or (B) a violation
of any judicial or administrative order, injunction, decree, or process
not addressed elsewhere in the guidelines, increase by 2 levels. If the
resulting offense level is less than 10, increase to level 10.
(8) If (A) the defendant relocated, or participated in relocating,
a fraudulent scheme to another jurisdiction to evade law enforcement or
regulatory officials; (B) a substantial part of a fraudulent scheme was
committed from outside the United States; or (C) the offense otherwise
involved sophisticated means, increase by 2 levels. If the resulting
offense level is less than level 12, increase to level 12.
(9) If the offense involved (A) the conscious or reckless risk of
death or serious bodily injury; or (B) possession of a dangerous weapon
(including a firearm) in connection with the offense, increase by 2
levels. If the resulting offense level is less than level 14, increase
to level 14.
(10) If (A) the offense involved an organized scheme to steal
vehicles or vehicle parts, or to receive stolen vehicles or vehicle
parts, and (B) the offense level as determined above is less than level
14, increase to level 14.
(11) If the offense substantially jeopardized the safety and
soundness of a financial institution, increase by 4 levels. If the
resulting offense level is less than level 24, increase to level 24.
[Gross Receipts, Option 1: [(12) If (A) the defendant derived more
than $1,000,000 in gross receipts from one or more financial
institutions as a result of the offense; and (B) the offense level as
determined above is less than level 24, increase to level 24.]
[Gross Receipts, Option 2: [(12) If (A) the defendant derived more
than $1,000,000 in gross receipts from one or more financial
institutions as a result of the offense, increase by 2 levels. If the
resulting offense level is less than level 24, increase to level 24.]
[Note: The Commission also has the option to keep the current 4-
level enhancement (as well as the floor) gross receipts SOC.]
(c) Cross References.
(1) If (A) a firearm, destructive device, explosive material, or
controlled substance was taken, or the taking of such item was an
object of the offense; or (B) the stolen property received,
transported, transferred, transmitted, or possessed was a firearm,
destructive device, explosive material, or controlled substance, apply
Sec. 2D1.1 (Unlawful Manufacturing, Importing, Exporting, or
Trafficking; Attempt or Conspiracy), Sec. 2D2.1 (Unlawful Possession;
Attempt or Conspiracy), Sec. 2K1.3 (Unlawful Receipt, Possession, or
Transportation of Explosive Materials; Prohibited Transactions
Involving Explosive Materials), or Sec. 2K2.1 (Unlawful Receipt,
Possession, or Transportation of Firearms or Ammunition; Prohibited
Transactions Involving Firearms or Ammunition), as appropriate, if the
resulting offense level is greater than that determined above.
(2) If the offense involved (A) arson; or (B) property destruction
by use of explosives, apply Sec. 2K1.4 (Arson: Property Destruction by
Use of Explosives).
[(3) If the offense involved (A) commercial bribery, or (B)
bribery, gratuity, or a related offense involving a public official,
apply Sec. 2B4.1 (Bribery in Procurement of Bank Loan and Other
Commercial Bribery) or a guideline from Chapter Two, Part C (Offenses
Involving Public Officials), as most appropriate [, if the resulting
offense level is greater than that determined above].]
[(4) If (A) none of subdivisions (1), (2), or (3) of this
subsection apply; (B) the defendant was convicted under a statute
proscribing false, fictitious, or fraudulent statements or
representations generally (e.g., 18 U.S.C. Sec. 1001, 1341, 1342, or
1343); and (C) the conduct set forth in the count of conviction is more
specifically covered by another guideline in Chapter Two, apply that
other guideline.]
(d) Special Instruction.
(1) If the defendant was convicted under 18 U.S.C. Sec. 1030(a)(4)
or (5), the minimum guideline sentence, notwithstanding any other
adjustment, shall be six months' imprisonment.
Commentary
Statutory Provisions: 7 U.S.C. Secs. 6, 6b, 6c, 6h, 6o, 13, 23; 15
U.S.C. Secs. 50, 77e, 77q, 77x, 78j, 78ff, 80b-6, 1644, 1983-1988,
1990c; 18 U.S.C. Secs. 225, 285-289, 471-473, 500, 510, 511, 553(a)(1),
(2), 641, 656, 657, 659, 662, 664, 1001-1008, 1010-1014, 1016-1022,
1025-1028, 1029, 1030(a)(5), 1031, 1341-1344, 1361, 1363, 1702, 1703,
1708, 1831, 1832, 2113(b), 2312-2317, 2321; 29 U.S.C. Secs. 439, 461,
501(c), 1131. For additional statutory provision(s), see Appendix A
(Statutory Index).
Application Notes:
1. For purposes of this guideline--
`Financial institution' means (A) any institution described in 18
U.S.C. Secs. 20, 656, 657, 1005-1007, and 1014; (B) any state or
foreign bank, trust company, credit union, insurance company,
investment company, mutual fund, savings (building and loan)
association, union or employee pension fund; (C) any health, medical or
hospital insurance association; (D) brokers and dealers registered, or
required to be registered, with the Securities and Exchange Commission;
(E) futures commodity merchants and commodity pool operators
registered, or required to be registered, with the Commodity Futures
Trading Commission; and (F) any similar entity, whether or not insured
by the federal government. `Union or employee pension fund' and
`health, medical, or hospital insurance association,' primarily include
large pension funds that serve many individuals (e.g., pension funds of
large national and international organizations, unions, and
corporations doing substantial interstate business), and associations
that undertake to provide pension, disability, or other benefits (e.g.,
medical or hospitalization insurance) to large numbers of persons.
`Firearm' and `destructive device' are defined in the Commentary to
Sec. 1B1.1 (Application Instructions).
`Foreign instrumentality,' `foreign agent,' and `trade secret' have
the meaning given those terms in 18 U.S.C. Sec. 1839(1), (2), and (3),
respectively.
`Mass-marketing,' means a plan, program, promotion, or campaign
that is conducted through solicitation by telephone, mail, the
Internet, or other means to induce a large number of persons to (A)
purchase goods or services; (B) participate in a contest or
sweepstakes; or (C) invest for financial profit. The enhancement would
apply,
[[Page 65984]]
for example, if the defendant conducted or participated in a
telemarketing campaign that solicited a large number of individuals to
purchase fraudulent life insurance policies.
`National cemetery' means a cemetery (A) established under section
2400 of title 38, United States Code; or (B) under the jurisdiction of
the Secretary of the Army, the Secretary of the Navy, the Secretary of
the Air Force, or the Secretary of the Interior.
`Theft from the person of another' means the taking, without the
use of force, of property that was being held by another person or was
within arms' reach. Examples include pick-pocketing or non-forcible
purse-snatching, such as the theft of a purse from a shopping cart.
2. For purposes of subsection (b)(1)--
(A) General Rule. Loss is the greater of the actual loss or the
intended loss.
`Actual loss' means the reasonably foreseeable pecuniary harm that
resulted or will result from the conduct for which the defendant is
accountable under Sec. 1B1.3 (Relevant Conduct). `Reasonably
foreseeable pecuniary harm' means pecuniary harm that the defendant
knew or, under the circumstances of the particular case, should have
known would likely follow, in the ordinary course of events, as a
result of that conduct.
`Intended loss' means the pecuniary harm intended to be caused by
the conduct for which the defendant is accountable under Sec. 1B1.3,
even if that harm would have been unlikely or impossible to accomplish
(e.g., as in a government sting operation).
(B) Determination of Loss. The court need not determine the precise
amount of the loss. Rather, it need only make a reasonable estimate of
that amount, based on available information and using, as appropriate
and practicable under the circumstances to best effectuate the general
rule in subdivision (A), factors such as the following:
(i) The fair market value of the property, or other thing of value,
taken or otherwise unlawfully acquired, misapplied, misappropriated, or
destroyed; or if the fair market value is impracticable to determine or
inadequately measures the harm, the cost to the victim of replacing
property taken or otherwise unlawfully acquired or destroyed.
(ii) The cost of repairs to damaged property, not to exceed the
replacement cost had the property been destroyed.
(iii) The approximate number of victims multiplied by the average
loss to each victim.
(iv) More general factors, such as the scope and duration of the
offense and revenues generated by similar operations.
(C) Gain. The court shall use gain instead of loss under subsection
(b)(1) if both (i) gain is greater than loss (which may be zero); and
(ii) gain more accurately reflects the seriousness of the offense.
(D) Credits Against Loss. Except as provided in subdivision (F)(i),
loss shall be reduced by the value of the economic benefit the
defendant or other persons acting jointly with the defendant
transferred to the victim before the defendant knew or should have
known that the offense had been detected.
In the case of collateral, the value of the economic benefit is the
amount the victim has recovered as of the time of sentencing from
disposition of the collateral. If the collateral has not been disposed
of by that time, the value is its fair market value as of the time of
sentencing.
In any other case, the value of the economic benefit is its fair
market value as of the time of transfer to the victim.
However, in cases in which the economic benefit transferred to the
victim has little or no value to the victim because it is substantially
different from what the victim intended to receive, loss shall not be
reduced by the value of that economic benefit.
For purposes of this subdivision: (i) ``economic benefit'' includes
money, property, or services performed; and (ii) ``transferred'' means
pledged or otherwise provided as collateral, returned, or otherwise
conveyed.
Option 1: [(E) Opportunity Costs. Interest (of any kind),
anticipated profits, and other opportunity costs shall not be included
in determining loss. However, there may be cases in which the amount of
interest, anticipated profits, and other opportunity costs is so
substantial that not including that amount as part of the loss would
substantially understate the seriousness of the offense or the
culpability of the defendant. In such cases, an upward departure may be
warranted.]
Option 2: [(E) Interest. Interest shall be included in determining
loss only if it is bargained for as part of a lending transaction that
is involved in the offense. The court shall include any such interest
that is accrued and unpaid as of the time the defendant knew or should
have known that the offense had been detected.]
(F) Special Rules. The following special rules shall be used to
assist in determining actual loss in the cases indicated:
(i) Fraudulent Investment Schemes. In a case involving a fraudulent
investment scheme, such as a Ponzi scheme, actual loss is the sum of
the net actual losses of each victim who lost all or part of that
victim's principal investment as a result of the fraudulent investment
scheme. Because this subdivision provides, in cases covered hereunder,
for determination of the net loss of each victim, subdivision (D),
relating generally to credits against loss, shall not apply to such
cases.
(ii) Stolen or Counterfeit Credit Cards and Access Devices;
Purloined Numbers and Codes. In a case involving stolen or counterfeit
credit cards (see 15 U.S.C. Sec. 1602(k)), stolen or counterfeit access
devices (see 18 U.S.C. Sec. 1029(e)(1)), or purloined numbers or codes,
the actual loss includes any unauthorized charges made with the credit
cards, access devices, or numbers or codes. The actual loss determined
for each such credit card, access device, or number or code shall be
not less than $100.
(iii) Diversion of Government Program Benefits. In a case involving
diversion of government program benefits, actual loss is the value of
the benefits diverted from intended recipients or uses.
(iv) Davis-Bacon Act Cases. In a case involving a Davis-Bacon Act
violation (i.e., a violation of 40 U.S.C. Sec. 276a, criminally
prosecuted under 18 U.S.C. Sec. 1001), the actual loss is the
difference between the legally required and actual wages paid.
(G) Upward Departure Considerations. There may be cases in which
the loss substantially understates the seriousness of the offense or
the culpability of the defendant. In such cases, an upward departure
may be warranted. The following is a non-exhaustive list of factors
that the court may consider in determining whether an upward departure
is warranted:
(i) A primary objective of the offense was an aggravating, non-
monetary objective. For example, a primary objective of the offense was
to inflict emotional harm.
(ii) The offense caused or risked substantial non-monetary harm.
For example, the offense caused physical harm, psychological harm, or
severe emotional trauma, or resulted in a substantial invasion of a
privacy interest.
(iii) The offense created a risk of substantial loss beyond the
loss determined above.
(iv) The offense (I) endangered national security or military
readiness; or (II) caused a loss of confidence in an important
institution.
(v) The offense (I) endangered the solvency or financial security
of one or more victims; or (II) impacted numerous victims and the loss
determination
[[Page 65985]]
substantially understates the aggregate harm.
(H) Downward Departure Considerations. There also may be cases in
which the loss substantially overstates the seriousness of the offense
or the culpability of the defendant. In such cases, a downward
departure may be warranted. The following is a non-exhaustive list of
factors that the court may consider in determining whether a downward
departure is warranted:
(i) The primary objective of the offense was a mitigating, non-
monetary objective. For example, the primary objective of the offense
was to fund medical treatment for a sick parent. [However, if, in
addition to that primary objective, a substantial objective of the
offense was to benefit the defendant economically, a downward departure
would not be warranted.]
(ii) The defendant made complete, or substantially complete,
restitution prior to the time the defendant knew or should have known
that the offense had been detected.
(I) Appropriate Deference. The sentencing judge is in a unique
position to assess the evidence and estimate the loss based upon that
evidence. Accordingly, the court's loss determination is entitled to
appropriate deference. See 18 U.S.C. Sec. 3742(e) and (f).
3. In some cases in which the amount of intended loss exceeds the
actual loss, whether some of the intended loss would have occurred may
be speculative. In such cases, the offense level ordinarily applicable
to that amount of intended loss sometimes must be reduced, in
accordance with Sec. 2X1.1. (Conspiracies, Attempts, Solicitations).
Specifically, in a case involving only inchoate offense conduct (i.e.,
a case in which the defendant was convicted only of an attempt,
conspiracy, or solicitation, and in which the offense involved only
intended loss), a decrease of three levels sometimes may apply, as
provided under Sec. 2X1.1.
Similarly, in the case of a partially completed offense (e.g., an
offense involving a completed fraud that is part of a larger, attempted
fraud in which both actual loss and additional intended loss result),
the offense level is to be determined, and may be decreased in some
cases, in accordance with the provisions of Sec. 2X1.1, whether the
defendant is convicted of the substantive offense, the inchoate offense
(attempt, solicitation, or conspiracy), or both. As explained more
fully in Application Note 4 of the Commentary to Sec. 2X1.1, in such a
case, a three-level decrease in the offense level for the intended loss
sometimes may apply, except that the offense level for the intended
loss, with or without a three-level decrease, shall not be used if it
is less than the offense level for the actual loss.
Options on Discouraged or Prohibited Departure Based on MMP:
[4. [Option 1: The Commission has determined that the amount of
loss involved in a particular case is a more appropriate factor in
distinguishing the seriousness of an offense than is the extent of
planning. Accordingly, (A) a sentence below the applicable guideline
range [Option 2: [ordinarily]] would not be warranted in a case merely
because it involved only minimal planning; and (B) a sentence above the
applicable guideline range [Option 2: [ordinarily]] would not be
warranted in a case merely because it involved more-than-minimal
planning.]
5. Subsection (b)(7)(A) applies in the case of a misrepresentation
that the defendant was an employee or authorized agent of a charitable,
educational, religious or political organization, or a government
agency. Examples of conduct to which this factor applies include (A)
the mail solicitation by a group of defendants of contributions to a
non-existent famine relief organization; (B) the diversion by a
defendant of donations given for a religiously affiliated school as a
result of telephone solicitations to church members in which the
defendant falsely claims to be a fund-raiser for the school; and (C)
the posing by a defendant as a federal collection agent in order to
collect a delinquent student loan.
Subsection (b)(7)(B) provides an adjustment for violation of any
judicial or administrative order, injunction, decree, or process. If it
is established that an entity the defendant controlled was a party to
the prior proceeding, and the defendant had knowledge of the prior
decree or order, this provision applies even if the defendant was not a
specifically named party in that prior case. For example, a defendant
whose business was previously enjoined from selling a dangerous
product, but who nonetheless engaged in fraudulent conduct to sell the
product, would be subject to this provision. This subsection does not
apply to conduct addressed elsewhere in the guidelines; e.g., a
violation of a condition of release (addressed in Sec. 2J1.7 (Offense
Committed While on Release)) or a violation of probation (addressed in
Sec. 4A1.1 (Criminal History Category)).
The enhancements in subsection (b)(7) are alternative rather than
cumulative; however, if both of the enumerated factors apply in a
particular case, an upward departure may be warranted.
7. For purposes of subsection (b)(8)(B), ``United States'' means
each of the 50 states, the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands, Guam, the Northern
Mariana Islands, and American Samoa.
For purposes of subsection (b)(8)(C), `sophisticated means' means
especially complex or especially intricate offense conduct pertaining
to the execution or concealment of an offense. For example, in a
telemarketing scheme, locating the main office of the scheme in one
jurisdiction but locating soliciting operations in another jurisdiction
would ordinarily indicate sophisticated means. Conduct such as hiding
assets or transactions, or both, through the use of fictitious
entities, corporate shells, or offshore bank accounts also ordinarily
would indicate sophisticated means.
If the conduct that forms the basis for an enhancement under
subsection (b)(8) is the only conduct that forms the basis for an
adjustment under Sec. 3C1.1 (Obstruction of Justice), do not apply an
adjustment under Sec. 3C1.1.
8. For purposes of subsection (b)(10), a minimum measure of loss is
provided in the case of an ongoing, sophisticated operation (such as an
auto theft ring or ``chop shop'') to steal vehicles or vehicle parts or
to receive stolen vehicles or vehicle parts. ``Vehicles'' refers to all
forms of vehicles, including aircraft and watercraft.
9. For purposes of subsection (b)(11), an offense shall be
considered to have substantially jeopardized the safety and soundness
of a financial institution if, as a consequence of the offense, the
institution (A) became insolvent; (B) substantially reduced benefits to
pensioners or insureds; (C) was unable on demand to refund fully any
deposit, payment, or investment; (D) was so depleted of its assets as
to be forced to merge with another institution in order to continue
active operations; or (E) was placed in substantial jeopardy of
experiencing any of the conditions described in subdivisions (A)
through (D) of this note.
10. For purposes of subsection (b)(12), the defendant shall be
considered to have derived more than $1,000,000 in gross receipts if
the gross receipts to the defendant individually, rather than to all
participants, exceeded $1,000,000. ``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
[[Page 65986]]
directly or indirectly as a result of the offense. See 18 U.S.C.
Secs. 982(a)(4), 1344.
11. Subsection (c)[(4)] provides a cross reference to another
Chapter Two guideline in cases in which the defendant is convicted of a
general fraud statute, and the conduct set forth in the count of
conviction is more specifically covered by that other Chapter Two
guideline. Sometimes offenses involving fraudulent statements are
prosecuted under 18 U.S.C. Sec. 1001, or a similarly general statute,
although the offense is also covered by a more specific statute.
Examples include false entries regarding currency transactions, for
which Sec. 2S1.3 (Structuring Transactions to Evade Reporting
Requirements; Failure to Report Cash or Monetary Transactions; Failure
to File Currency and Monetary Instrument Report; Knowingly Filing False
Reports) would be more apt, and false statements to a customs officer,
for which Sec. 2T3.1 (Evading Import Duties or Restrictions
(Smuggling); Receiving or Trafficking in Smuggled Property) likely
would be more apt. In certain other cases, the mail or wire fraud
statutes, or other relatively broad statutes, are used primarily as
jurisdictional bases for the prosecution of other offenses.
Offenses involving fraudulent identification documents and access
devices, in violation of 18 U.S.C. Secs. 1028 and 1029, are also
covered by this guideline. If the primary purpose of the offense
involved the unlawful production, transfer, possession, or use of
identification documents for the purpose of violating, or assisting
another to violate, the laws relating to naturalization, citizenship,
or legal resident status, apply Sec. 2L2.1 or Sec. 2L2.2, as
appropriate, rather than this guideline, pursuant to subsection (c)(3).
12. If the defendant is convicted under 18 U.S.C. Sec. 225
(relating to a continuing financial crimes enterprise), the offense
level is that applicable to the underlying series of offenses
comprising the continuing financial crimes enterprise.
Background: This guideline covers offenses involving theft, stolen
property, property damage or destruction, fraud, forgery, insider
trading, and counterfeiting (other than offenses involving altered or
counterfeit bearer obligations of the United States). It also covers
offenses involving altering or removing motor vehicle identification
numbers, trafficking in automobiles or automobile parts with altered or
obliterated identification numbers, odometer laws and regulations,
obstructing correspondence, the falsification of documents or records
relating to a benefit plan covered by the Employment Retirement Income
Security Act, and the failure to maintain, or falsification of,
documents required by the Labor Management Reporting and Disclosure
Act.
Because federal fraud statutes often are broadly written, a single
pattern of offense conduct usually can be prosecuted under several code
sections, as a result of which the offense of conviction may be
somewhat arbitrary. Furthermore, most fraud statutes cover a broad
range of conduct with extreme variation in severity. The specific
offense characteristics and cross references contained in this
guideline are designed with these considerations in mind.
The Commission has determined that, ordinarily, the sentences of
defendants convicted of federal offenses should reflect the nature and
magnitude of the pecuniary harm caused by their crimes. Accordingly,
along with other relevant factors under the guidelines, loss serves as
a measure of the seriousness of the offense and the defendant's
relative culpability and is a principal factor in determining the
offense level under this guideline. Because of the structure of the
Sentencing Table (Chapter 5, Part A), subsection (b)(1) results in an
overlapping range of enhancements based on the loss.
Both direct and consequential pecuniary harm that is reasonably
foreseeable to result from the offense will be taken into account in
determining the loss. Accordingly, in any particular case, the
determination of loss may include consideration of factors not
specifically set forth in this guideline. For example, in an offense
involving unlawfully accessing, or exceeding authorized access to, a
``protected computer,'' as defined in 18 U.S.C. Sec. 1030(e)(2)(A) or
(B), ``loss'' is the reasonably foreseeable pecuniary harm to the
victim, which typically includes costs such as conducting a damage
assessment and restoring the system and data to their condition prior
to the offense, and any lost revenue due to interruption of service.
The Commission does not intend that the cost to the government of
prosecution and criminal investigation of an offense covered by this
guideline will be included in the determination of loss, even if such
costs are reasonably foreseeable.
Theft from the person of another, such as pickpocketing or non-
forcible purse-snatching, receives an enhanced sentence because of the
increased risk of physical injury. This guideline does not include an
enhancement for thefts from the person by means of force or fear; such
crimes are robberies and are covered under Sec. 2B3.1 (Robbery).
A minimum offense level of 14 is provided for offenses involving an
organized scheme to steal vehicles or vehicle parts. Typically, the
scope of such activity is substantial, but the value of the property
may be particularly difficult to ascertain in individual cases because
the stolen property is rapidly resold or otherwise disposed of in the
course of the offense. Therefore, the specific offense characteristic
of an organized scheme is used as an alternative to loss in setting a
minimum offense level.
Use of false pretenses involving charitable causes and government
agencies enhances the sentences of defendants who take advantage of
victims' trust in government or law enforcement agencies or the
generosity and charitable motives of victims. Taking advantage of a
victim's self-interest does not mitigate the seriousness of fraudulent
conduct; rather, defendants who exploit victims' charitable impulses or
trust in government create particular social harm. In a similar vein, a
defendant who has been subject to civil or administrative proceedings
for the same or similar fraudulent conduct demonstrates aggravated
criminal intent and is deserving of additional punishment for not
conforming with the requirements of judicial process or orders issued
by federal, state, or local administrative agencies.
Subsection (b)(5) implements, in a broader form, the instruction to
the Commission in section 6(b)(1) of Public Law 105-184. Subsection
(b)(6) implements the instruction to the Commission in section 2 of
Public Law 105-101. Subsection (b)(8) implements, in a broader form,
the instruction to the Commission in section 6(c)(2) of Public Law 105-
184. Subsection (b)(9)(B) implements, in a broader form, the
instruction to the Commission in section 110512 of Public Law 103-322.
Subsection (b)(11) implements, in a broader form, the instruction to
the Commission in section 961(m) of Public Law 101-73. Subsection
(b)(12) implements the instruction to the Commission in section 2507 of
Public Law 101-647. Subsection (d)(1) implements the instruction to the
Commission in section 805(c) of Public Law 104-132.''.
(B) The Tax Package
3. Synopsis of Proposed Amendment: The following proposed amendment
provides increases that are similar to the loss table presented in the
consolidated theft, fraud, and property destruction
[[Page 65987]]
guideline, except at amounts between $12,500 and $80,000.
Proposed Amendment: Strike the tax table in Sec. 2T4.1 and insert a
new table as follows:
``Sec. 2T4.1. Tax Table.
------------------------------------------------------------------------
Offense
Tax loss (apply the greatest) level
------------------------------------------------------------------------
(A) $2,000 or less............................................ 6
(B) More than $2,000.......................................... 8
(C) More than $5,000.......................................... 10
(D) More than $12,500......................................... 12
(E) More than $30,000......................................... 14
(F) More than $80,000......................................... 16
(G) More than $200,000........................................ 18
(H) More than $500,000........................................ 20
(I) More than $1,200,000...................................... 22
(J) More than $2,500,000...................................... 24
(K) More than $7,500,000...................................... 26
(L) More than $20,000,000..................................... 28
(M) More than $50,000,000..................................... 30
(N) More than $100,000,000.................................... 32.''.
------------------------------------------------------------------------
Issue for Comment: On May 1, 1998, the Commission submitted to
Congress an amendment that provided a two-level enhancement in the
fraud guideline, Sec. 2F1.1, for sophisticated concealment. The
Commission also submitted amendments that generally conformed the
sophisticated means enhancement in Secs. 2T1.1, 2T1.4 and 2T3.1 to the
sophisticated concealment enhancement provided in the fraud guideline.
Subsequent to these amendments, the Congress enacted the
Telemarketing Fraud Protection Act of 1998, Pub. L. 105-184. This Act
required the Commission to act under emergency authority and, among
other things, specifically required the Commission to provide ``an
additional appropriate sentencing enhancement, if [a telemarketing]
offense involved sophisticated means, including but not limited to
sophisticated concealment efforts, such as perpetrating the offense
from outside the United States.''
The Commission responded to this directive by building on the
amendment to Sec. 2F1.1 that added sophisticated concealment. The new
amendment, which was submitted to Congress in September, 1998,
broadened the scope of the ``sophisticated concealment'' enhancement to
cover ``sophisticated means'' of executing or concealing a fraud
offense.
The Commission invites comment on whether it should amend
Secs. 2T1.1, 2T1.4, and 2T3.1 to generally conform the sophisticated
concealment enhancement (and the accompanying commentary) to the
sophisticated means enhancement added to the fraud guideline in
response to the Telemarketing Fraud Protection Act. The Commission also
invites comment on whether it should provide a minimum offense level of
[12] for tax offenses that involve either sophisticated concealment or
sophisticated means (if the Commission conforms the enhancement in
Secs. 2T1.1, 2T1.4, and 2T3.1).
(C) More Than Mimimal Planning Conforming Amendments
4. Synopsis of Proposed Amendment: The following amendment makes
conforming changes that necessarily follow from the incorporation of
more than minimal planning into the loss table. The amendment proposes
to strike references to more than minimal planning in appropriate
places throughout the guidelines.
Proposed Amendment: The Commentary to Sec. 1B1.1 captioned
``Application Notes'' is amended in Note 1(f) in the first paragraph by
striking the last sentence as follows:
`` `More than minimal planning' also exists if significant
affirmative steps were taken to conceal the offense, other than conduct
to which Sec. 3C1.1 (Obstructing or Impeding the Administration of
Justice) applies.''.
The Commentary to Sec. 1B1.1 captioned ``Application Notes'' is
amended in Note 1(f) by striking the second paragraph as follows:
`` `More than minimal planning' is deemed present in any case
involving repeated acts over a period of time, unless it is clear that
each instance was purely opportune. Consequently, this adjustment will
apply especially frequently in property offenses.''
The Commentary to Sec. 1B1.1 captioned ``Application Notes'' is
amended in Note 1(f) by striking the last two paragraphs as follows:
``In a theft, going to a secluded area of a store to conceal the
stolen item in one's pocket would not alone constitute more than
minimal planning. However, repeated instances of such thefts on several
occasions would constitute more than minimal planning. Similarly,
fashioning a special device to conceal the property, or obtaining
information on delivery dates so that an especially valuable item could
be obtained, would constitute more than minimal planning.
In an embezzlement, a single taking accomplished by a false book
entry would constitute only minimal planning. On the other hand,
creating purchase orders to, and invoices from, a dummy corporation for
merchandise that was never delivered would constitute more than minimal
planning, as would several instances of taking money, each accompanied
by false entries.''.
The Commentary to Sec. 1B1.1 captioned ``Application Notes'' is
amended in Note 4 in the second paragraph by striking the last sentence
as follows:
``For example, the adjustments from Sec. 2F1.1(b)(2) (more than
minimal planning) and Sec. 3B1.1 (Aggravating Role) are applied
cumulatively.''.
Section 2B1.1(b)(4) is amended by striking subdivision (A) as
follows:
``(A) If the offense involved more than minimal planning, increase
by 2 levels; or''.
Section 2B1.1(b)(4)(B) is amended by striking ``(B)'; and by
striking ``4 `` and inserting ``2''.
The Commentary to Sec. 2B1.1 captioned ``Application Notes'' is
amended in Note 1 by striking `` `More than minimal planning,' ''; and
by striking `` `firearm,' '' and inserting `` `Firearm'' '.
The Commentary to Sec. 2B1.1 captioned ``Application Notes'' is
amended by striking Note 13 as follows:
``13. If subsection (b)(6) (A) or (B) applies, there shall be a
rebuttable presumption that the offense involved `more than minimal
planning.' ''.
The Commentary to Sec. 2B1.1 captioned ``Application Notes'' is
amended by redesignating Notes 14, 15, and 16 as Notes 13, 14, and 15,
respectively.
The Commentary to Sec. 2B1.1 captioned ``Background'' is amended in
the first paragraph by striking the last sentence as follows:
``Because of the structure of the Sentencing Table (Chapter 5, Part
A), subsection (b)(1) results in an overlapping range of enhancements
based on the loss.''.
The Commentary to Sec. 2B1.1 captioned ``Background'' is amended by
striking the second paragraph as follows:
``The guidelines provide an enhancement for more than minimal
planning, which includes most offense behavior involving affirmative
acts on multiple occasions. Planning and repeated acts are indicative
of an intention and potential to do considerable harm. Also, planning
is often related to increased difficulties of detection and proof.''.
Section 2B1.3(b) is amended by striking subdivision (3) as follows:
``(3) If the offense involved more than minimal planning, increase
by 2 levels.''; and by redesignating (b)(4) as (b)(3).
The Commentary to Sec. 2B1.3 captioned ``Application Notes'' is
amended in Note 1 by striking the first paragraph as follows:
`` `More than minimal planning' is defined in the Commentary to
Sec. 1B1.1 (Application Instructions).''
Section 2F1.1(b) is amended by striking subdivision (2) as follows:
``(2) If the offense involved (A) more than minimal planning, or
(B) a scheme
[[Page 65988]]
to defraud more than one victim, increase by 2 levels.''.
The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is
amended by striking Note 2 as follows:
``2. `More than minimal planning' (subsection (b)(2)(A)) is defined
in the Commentary to Sec. 1B1.1 (Application Instructions).'';
by striking Note 4 as follows:
``4. `Scheme to defraud more than one victim,' as used in
subsection (b)(2)(B), refers to a design or plan to obtain something of
value from more than one person. In this context, `victim' refers to
the person or entity from which the funds are to come directly. Thus, a
wire fraud in which a single telephone call was made to three distinct
individuals to get each of them to invest in a pyramid scheme would
involve a scheme to defraud more than one victim, but passing a
fraudulently endorsed check would not, even though the maker, payee
and/or payor all might be considered victims for other purposes, such
as restitution.'';
by striking Note 20 as follows:
``20. If subsection (b)(7) (A) or (B) applies, there shall be a
rebuttable presumption that the offense involved `more than minimal
planning.' '';
by redesignating Note 3 as Note 2, and by redesignating Notes 5 through
19 as Notes 3 through 17, respectively.
The Commentary to Sec. 2F1.1 captioned ``Background'' is amended by
striking the third paragraph as follows:
``The extent to which an offense is planned or sophisticated is
important in assessing its potential harmfulness and the dangerousness
of the offender, independent of the actual harm. A complex scheme or
repeated incidents of fraud are indicative of an intention and
potential to do considerable harm. In pre-guidelines practice, this
factor had a significant impact, especially in frauds involving small
losses. Accordingly, the guideline specifies a 2-level enhancement when
this factor is present.''.
The Commentary to Sec. 3D1.3 captioned ``Application Notes'' is
amended in Note 3 by striking the last sentence as follows:
``In addition, the adjustment for `more than minimal planning'
frequently will apply to multiple count convictions for property
offenses.''.
The ``Illustrations of the Operation of the Multiple-Count Rules''
after guideline 3D1.5 is amended in the fifth sentence of illustration
2 by inserting ``and'' before ``1 level''; by striking ``; and 2 levels
are added because the conduct involved repeated acts with some planning
(Sec. 2F1.1(b)(2)(A))''; and in the last sentence by striking ``9'' and
inserting ``7''.
(D) Amendments for Referring Guidelines
5. Synopsis of Proposed Amendment: Currently, many guideline
provisions refer to the loss tables in the theft (Sec. 2B1.1) and fraud
(Sec. 2F1.1) guidelines. In general, the following amendments show how
the guidelines that refer to either Sec. 2B1.1 or Sec. 2F1.1 are
proposed to be amended if the Commission were to adopt the consolidated
guideline presented in Proposed Amendment 1, above.
The proposed amendment accomplishes the following: (A) Presents a
reference monetary table to be used as an alternative to the loss table
in the consolidated guideline for guidelines that already build in more
than minimal planning; (B) sets out the guidelines that would refer to
this new reference monetary table; (C) presents three options for
amending the pornography and obscenity guidelines; (D) presents two
options for amending the copyright and structuring transactions
guidelines; (E) presents two options for amending Sec. 2B3.2 for
offenses involving the invasion of a protected computer; (F)
consolidates the bank gratuity and principal gratuity guidelines; and
(G) presents technical and conforming amendments that would be required
if the Commission consolidates the theft, fraud, and property
destruction guidelines.
5(A). Reference Monetary Table
Proposed Amendment: Chapter Two, Part X is amended by adding at
the end the following new subpart:
``6. Reference Monetary Table
Sec. 2X6.1. Reference Monetary Table
------------------------------------------------------------------------
Amount (apply the greatest) Increase in level
------------------------------------------------------------------------
(A) More than $2,000....................... Add 1.
(B) More than $5,000....................... Add 2.
(C) More than $10,000...................... Add 3.
(D) More than $20,000...................... Add 4.
(E) More than $40,000...................... Add 6.
(F) More than $80,000...................... Add 8.
(G) More than $200,000..................... Add 10.
(H) More than $500,000..................... Add 12.
(I) More than $1,200,000................... Add 14.
(J) More than $2,500,000................... Add 16.
(K) More than $7,500,000................... Add 18.
(L) More than $20,000,000.................. Add 20.
(M) More than $50,000,000.................. Add 22.
(N) More than $100,000,000................. Add 24.''.
------------------------------------------------------------------------
5(B). Guidelines That Will Refer to Reference Monetary Table
Proposed Amendment: Section 2B5.1(b) is amended by striking:
``(1) If the face value of the counterfeit items exceeded $2,000,
increase by the corresponding number of levels from the table at
Sec. 2F1.1 (Fraud and Deceit).'',
and inserting:
``(1) If the face value of the counterfeit items exceeded $2,000,
increase by the corresponding number of levels from the table in
Sec. 2X6.1 (Reference Monetary Table).''.
Section 2B6.1(b) is amended by striking:
``(1) If the retail value of the motor vehicles or parts involved
exceeded $2,000, increase the offense level by the corresponding number
of levels from the table in Sec. 2F1.1 (Fraud and Deceit).'',
and inserting:
``(1) If the retail value of the motor vehicles or parts involved
exceeded $2,000, increase by the corresponding number of levels from
the table in Sec. 2X6.1 (Reference Monetary Table).''.
Section 2F1.2(b) is amended by striking:
``(1) Increase by the number of levels from the table in Sec. 2F1.1
corresponding to the gain resulting from the offense.'',
and inserting:
``(1) If the gain resulting from the offense exceeded $2,000,
increase by the corresponding number of levels from the table in
Sec. 2X6.1 (Reference Monetary Table).''.
Section 2B4.1(b) is amended by striking:
``(1) If the greater of the value of the bribe or the improper
benefit to be conferred exceeded $2,000, increase the offense level by
the corresponding number of levels from the table in Sec. 2F1.1.'',
and inserting:
``(1) If the greater of the value of the bribe or the improper
benefit to be conferred exceeded $2,000, increase by the corresponding
number of levels from the table in Sec. 2X6.1 (Reference Monetary
Table).''.
Section 2B3.3(b) is amended by striking:
``(1) If the greater of the amount obtained or demanded exceeded
$2,000, increase by the corresponding number of levels from the table
in Sec. 2F1.1.'',
and inserting:
``(1) If the greater of the amount obtained or demanded exceeded
$2,000, increase by the corresponding number of levels from the table
in Sec. 2X6.1 (Reference Monetary Table).''.
Section 2Q2.1(b)(3) is amended by striking:
``(A) If the market value of the fish, wildlife, or plants exceeded
$2,000, increase the offense level by the corresponding number of
levels from the table in Sec. 2F1.1 (Fraud and Deceit); or'',
[[Page 65989]]
and inserting:
``(A) If the market value of the fish, wildlife, or plants exceeded
$2,000, increase by the corresponding number of levels from the table
in Sec. 2X6.1 (Reference Monetary Table), [but in no event more than
[18] levels]; or''.
Section 2C1.1(b)(2) is amended by striking:
``(A) If the value of the payment, the benefit received or to be
received in return for the payment, or the loss to the government from
the offense, whichever is greatest, exceeded $2,000, increase by the
corresponding number of levels from the table in Sec. 2F1.1 (Fraud and
Deceit).'',
and inserting:
``(A) If the value of the payment, the benefit received or to be
received in return for the payment, or the loss to the government from
the offense, whichever is greatest, exceeded $2,000, increase by the
corresponding number of levels from the table in Sec. 2X6.1 (Reference
Monetary Table).''.
Section 2C1.2(b)(2) is amended by striking:
``(A) If the value of the gratuity exceeded $2,000, increase by the
corresponding number of levels from the table in Sec. 2F1.1 (Fraud and
Deceit).'',
and inserting:
``(A) If the value of the gratuity exceeded $2,000, increase by the
corresponding number of levels from the table in Sec. 2X6.1 (Reference
Monetary Table).''.
Section 2C1.7(b)(1) is amended by striking:
``(A) If the loss to the government, or the value of anything
obtained or to be obtained by a public official or others acting with a
public official, whichever is greater, exceeded $2,000, increase by the
corresponding number of levels from the table in Sec. 2F1.1 (Fraud and
Deceit); or'',
and inserting:
``(A) If the loss to the government, or the value of anything
obtained or to be obtained by a public official or others acting with a
public official, whichever is greater, exceeded $2,000, increase by the
corresponding number of levels from the table in Sec. 2X6.1 (Reference
Monetary Table).''.
Section 2E5.1(b) is amended by striking:
``(2) Increase by the number of levels from the table in Sec. 2F1.1
(Fraud and Deceit) corresponding to the value of the prohibited payment
or the value of the improper benefit to the payer, whichever is
greater.'',
and inserting:
``(2) If the value of the prohibited payment or the value of the
improper benefit to the payer, whichever is greater, exceeded $2,000,
increase by the corresponding number of levels from the table in
Sec. 2X6.1 (Reference Monetary Table).''.
5(C). Pornography and Obscenity Guidelines
Proposed Amendment: [Option 1: Section 2G2.2(b) is amended by
striking:
``(2) If the offense involved distribution, increase by the number
of levels from the table in Sec. 2F1.1 corresponding to the retail
value of the material, but in no event by less than 5 levels.'',
and inserting:
``(2) If the offense involved distribution, increase by the number
of levels from the table in Sec. 2X6.1 (Reference Monetary Table)
corresponding to the retail value of the material, but in no event by
less than [5] levels.''.
[Option 2: Section 2G2.2(b)(2) is amended by inserting ``(Fraud and
Deceit)'' after ``Sec. 2F1.1''.
[Option 3: Section 2G2.2(b)(2) is amended by striking ``the number
of levels from the table in Sec. 2F1.1 corresponding to the retail
value of the material, but in no event by less than''.
The Commentary to Sec. 2G2.2 captioned ``Application Notes'' is
amended by adding at the end the following new note:
``4. Subsection (b)(2) provides a five-level enhancement if the
offense involved distribution. If the offense involved distribution by
a large-scale commercial enterprise [(i.e., a commercial enterprise
distributing material having a retail value that is more than
[$40,000])], an upward departure may be warranted.''.
[Option 1: Section 2G3.1(b) is amended by striking:
``(1) If the offense involved an act related to distribution for
pecuniary gain, increase by the number of levels from the table in
Sec. 2F1.1 corresponding to the retail value of the material, but in no
event by less than 5 levels.'',
and inserting:
``(1) If the offense involved an act related to distribution for
pecuniary gain, increase by the number of levels from the table in
Sec. 2X6.1 (Reference Monetary Table) corresponding to the retail value
of the material, but in no event by less than [5] levels.''.
[Option 2: Section 2G3.1(b)(1) is amended by inserting ``(Fraud and
Deceit)'' after ``Sec. 2F1.1''.
[Option 3: Section 2G3.1(b)(1) is amended by striking ``the number
of levels from the table in Sec. 2F1.1 corresponding to the retail
value of the material, but in no event by less than 5'', and inserting
``[5]''.
The Commentary to Sec. 2G3.1 captioned ``Application Note'' is
amended by striking ``Note'' and inserting ``Notes''; and adding at the
end the following new note:
``2. Subsection (b)(1) provides a [five-level] enhancement if the
offense involved an act related to distribution for pecuniary gain.. If
the offense involved distribution by a large-scale commercial
enterprise [(i.e., a commercial enterprise distributing material having
a retail value that is more than [$40,000])], an upward departure may
be warranted''.
[Option 1: Section 2G3.2(b) is amended by striking:
``(2) If 6 plus the offense level from the table at 2F1.1(b)(1)
corresponding to the volume of commerce attributable to the defendant
is greater than the offense level determined above, increase to that
offense level.'',
and inserting:
``(2) If 6 plus the number of levels from the table in Sec. 2X6.1
(Reference Monetary Table) corresponding to the volume of commerce
attributable to the defendant results in a greater offense level than
the offense level determined above, increase to the greater offense
level.''.
[Option 2: Section 2G3.2(b) is amended by striking:
``(2) If 6 plus the offense level from the table at 2F1.1(b)(1)
corresponding to the volume of commerce attributable to the defendant
is greater than the offense level determined above, increase to that
offense level.'',
and inserting:
``(2) If 6 plus the number of levels from the table in Sec. 2F1.1
(Fraud and Deceit) corresponding to the volume of commerce attributable
to the defendant results in a greater offense level than the offense
level determined above, increase to the greater offense level.''.
[Option 3: Section 2G3.2(b) is amended by striking:
``(2) If 6 plus the offense level from the table at 2F1.1(b)(1)
corresponding to the volume of commerce attributable to the defendant
is greater than the offense level determined above, increase to that
offense level.''.
The Commentary to Sec. 2G3.2 is amended by striking:
``Background: Subsection (b)(1) provides an enhancement where an
obscene telephonic communication was received by a minor less than 18
years of age or where a broadcast was made during a time when such
minors were likely to receive it. Subsection (b)(2) provides an
enhancement for large-scale
[[Page 65990]]
``dial-a-porn'' or obscene broadcasting operations that results in an
offense level comparable to the offense level for such operations under
Sec. 2G3.1 (Importing, Mailing, or Transporting Obscene Matter). The
extent to which the obscene material was distributed is approximated by
the volume of commerce attributable to the defendant.'';
and by inserting:
``Application Notes:
1. Subsection (b)(1) provides an enhancement where an obscene
telephonic communication was received by a minor less than 18 years of
age or where a broadcast was made during a time when such minors were
likely to receive it.
2. If the offense involved communications or broadcasting
operations by a large-scale commercial enterprise [(i.e., a commercial
enterprise engaging in a volume of commerce having a value that is more
than [$40,000])], an upward departure may be warranted.''.
5(D). Copyright and Structuring Transactions
Proposed Amendment: [Option 1: Section 2B5.3(b) is amended by
striking:
``(1) If the retail value of the infringing items exceeded $2,000,
increase by the corresponding number of levels from the table in
Sec. 2F1.1 (Fraud and Deceit).'',
and inserting:
``(1) If the retail value of the infringing items exceeded $2,000,
increase by the corresponding number of levels from the table in
Sec. 2X6.1 (Reference Monetary Table).''.
[Option 2: Maintains current reference to the fraud table.
[Option 1: Section Sec. 2S1.3 is amended by striking:
``(a) Base Offense Level: 6 plus the number of offense levels from
the table in Sec. 2F1.1 (Fraud and Deceit) corresponding to the value
of the funds.'',
and inserting:
``(a) Base Offense Level: 6 plus the corresponding number of levels
from the table in Sec. 2X6.1 (Reference Monetary Table), if the value
of the funds exceeded $2,000.
[Option 2: Section Sec. 2S1.3 is amended by striking:
``(a) Base Offense Level: 6 plus the number of offense levels from
the table in Sec. 2F1.1 (Fraud and Deceit) corresponding to the value
of the funds.'',
and inserting:
``(a) Base Offense Level: 6 plus the corresponding number of levels
from the table in Sec. 2F1.1 (Fraud and Deceit), if the value of the
funds exceeded $2,000.''.
5(E). Trespass Offenses Involving Invasion of Protected Computers
Proposed Amendment: [Option 1: Section 2B2.3(b) is amended by
striking:
``(3) If the offense involved invasion of a protected computer
resulting in a loss exceeding $2,000, increase the offense level by the
number of levels from the table in Sec. 2F1.1 corresponding to the
loss.'',
and inserting:
``(3) If (A) the offense involved invasion of a protected computer,
and (B) the loss resulting from the invasion exceeded $2,000, increase
by the corresponding number of levels from the table in Sec. 2X6.1
(Reference Monetary Table).''.
[Option 2: Section 2B2.3(b) is amended by striking:
``(3) If the offense involved invasion of a protected computer
resulting in a loss exceeding $2,000, increase the offense level by the
number of levels from the table in Sec. 2F1.1 corresponding to the
loss.'',
and inserting:
``(3) If (A) the offense involved invasion of a protected computer,
and (B) the loss resulting from the invasion exceeded $2,000, increase
by the corresponding number of levels from the table in Sec. 2F1.1
(Fraud and Deceit).''.
5(F). Consolidation of Bank Gratuity and Principal Gratuity
Guidelines
Proposed Amendment: Section 2C1.2(b)(2) is amended by striking:
``(A) If the value of the gratuity exceeded $2,000, increase by the
corresponding number of levels from the table in Sec. 2F1.1 (Fraud and
Deceit).'',
and inserting:
``(A) If the value of the unlawful payment exceeded $2,000,
increase by the corresponding number of levels from the table in
Sec. 2X6.1 (Reference Monetary Table).''.
Section 2C1.2(b)(2)(B) is amended by striking ``gratuity'' and
inserting ``unlawful payment''.
The Commentary to Sec. 2C1.2 captioned ``Statutory Provision'' is
amended by striking ``Provision'' and inserting ``Provisions''; by
inserting ``Sec. '' following ``U.S.C. Sec. ''; and by inserting '',
212-214, 217'' following ``(1)''.
The Commentary to Sec. 2C1.2 captioned ``Application Notes'' is
amended by adding at the end the following new note:
``5. An unlawful payment may be anything of value; it need not be a
monetary payment.''.
The Commentary to Sec. 2C1.2 captioned ``Background'' is amended by
striking the second and third sentences as follows:
``A corrupt purpose is not an element of this offense. An
adjustment is provided where the value of the gratuity exceeded $2,000,
or where the public official was an elected official or held a high-
level decision-making or sensitive position.'',
and inserting:
``It also applies to the offer to, or acceptance by, a bank
examiner of any unlawful payment; the offer or receipt of anything of
value for procuring a loan or discount of commercial paper from a
Federal Reserve Bank; and the acceptance of a fee or other
consideration by a federal employee for adjusting or canceling a farm
debt.''.
Strike Sec. 2C1.6 in its entirety.
5(G). Technical and Conforming Amendments
Synopsis of Proposed Amendment: The following amendments are
technical and conforming amendments that would be required if the
Commission adopts the amendments in (A) that propose to consolidate the
theft, fraud, and property destruction guidelines.
Proposed Amendment: The Commentary to Sec. 1B1.1 captioned
``Application Notes'' is amended in Note 4 in the second paragraph by
striking the second sentence.
The Commentary to Sec. 1B1.3 captioned ``Application Notes'' is
amended in Note 5 by striking ``Sec. 2F1.1 (Fraud and Deceit)'' and
inserting ``Sec. 2B1.1 (Theft, Property Destruction, and Fraud)''.
Chapter Two is amended by striking ``Sec. 2B1.1 (Larceny,
Embezzlement, and Other Forms of Theft)'' wherever it appears and
inserting ``Sec. 2B1.1 (Theft, Property Destruction, and Fraud)''; and
by striking ``Sec. 2F1.1 (Fraud and Deceit)'' wherever it appears and
inserting ``Sec. 2B1.1 (Theft, Property Destruction, and Fraud)''.
The Commentary to Sec. 2C1.1 captioned ``Application Notes'' is
amended in Note 2 by striking ``and includes both actual and intended
loss''.
The Commentary to Sec. 2C1.7 captioned ``Application Notes'' is
amended in Note 3 by striking ``and includes both actual and intended
loss''.
Section 2F1.2 is deleted in its entirety; and Chapter Two, Part B
is amended by adding at the end the following new guideline:
``Sec. 2B1.4. Insider Trading
(a) Base Offense Level: 8
(b) Specific Offense Characteristic
(1) Increase by the number of levels from the table in Sec. 2B1.1
(Theft, Property Destruction, and Fraud)
[[Page 65991]]
corresponding to the gain resulting from the offense.
Commentary
Statutory Provisions: 15 U.S.C. 78j and 17 CFR 240.10b-5. For
additional statutory provision(s), see Appendix A (Statutory Index).
Application Note:
1. Section 3B1.3 (Abuse of Position of Trust or Use of Special
Skill) should be applied only if the defendant occupied and abused a
position of special trust. Examples might include a corporate president
or an attorney who misused information regarding a planned but
unannounced takeover attempt. It typically would not apply to an
ordinary ``tippee.''
Background: This guideline applies to certain violations of Rule
10b-5 that are commonly referred to as `insider trading.' Insider
trading is treated essentially as a sophisticated fraud. Because the
victims and their losses are difficult if not impossible to identify,
the gain, i.e., the total increase in value realized through trading in
securities by the defendant and persons acting in concert with him or
to whom he provided inside information, is employed instead of the
victims' losses.
Certain other offenses, e.g., 7 U.S.C. Sec. 13(e), that involve
misuse of inside information for personal gain also may appropriately
be covered by this guideline.''.
The Commentary to Sec. 2B5.3 captioned ``Background'' is amended in
the first paragraph by striking``, which will generally exceed the loss
or gain due to the offense''.
Section 2H3.3(a)(2) is amended by inserting ``or destruction''
after ``theft'.
Section 2H3.3(a) is amended by striking subdivision (3).
The Commentary to Sec. 2H3.3 captioned ``Background'' is amended by
striking ``or Sec. 2B1.3 (Property Damage or Destruction)''.
Section 2K1.4(a) is amended in subdivision (3) by striking ``if the
offense was committed in connection with a scheme to defraud; or'' and
inserting a period; and by striking subdivision (4).
Section 2K1.4(b) is amended in subdivision (2) by striking
``(a)(4)'' and inserting ``(a)(3)''.
The Commentary to Sec. 2N2.1 captioned ``Application Notes'' is
amended in Note 2 by inserting ``theft, property destruction, and''
after ``involved''; and by striking ``theft, bribery, revealing trade
secrets, or destruction of property'' and inserting ``bribery''.
The Commentary to Sec. 2N3.1 captioned ``Background'' is amended by
striking ``the guideline for fraud and deception, Sec. 2F1.1,'' and
inserting ``Sec. 2B1.1 (Theft, Property Destruction, and Fraud)''.
The Commentary to Sec. 3B1.3 captioned ``Application Notes'' is
amended by adding at the end the following new note:
``4. The following additional illustrations of an abuse of a
position of trust pertain to theft or embezzlement from employee
pension or welfare benefit plans or labor unions:
(A) If the offense involved theft or embezzlement from an employee
pension or welfare benefit plan and the defendant was a fiduciary of
the benefit plan, an adjustment under this section for abuse of a
position of trust will apply. Fiduciary of the benefit plan is defined
in 29 U.S.C. Sec. 1002(21)(A) to mean a person who exercises any
discretionary authority or control in respect to the management of such
plan or exercises authority or control in respect to management or
disposition of its assets, or who renders investment advice for a fee
or other direct or indirect compensation with respect to any moneys or
other property of such plan, or has any authority or responsibility to
do so, or who has any discretionary authority or responsibility in the
administration of such plan.
(B) If the offense involved theft or embezzlement from a labor
union and the defendant was a union officer or occupied a position of
trust in the union (as set forth in 29 U.S.C. Sec. 501(a)), an
adjustment under this section for an abuse of a position of trust will
apply.''.
Section 3D1.2(d) is amended by striking ``2B1.3'' and inserting
``2B1.4''; and by striking ``Secs. 2F1.1, 2F1.2;''.
Section 3D1.3(b) is amended by striking ``(e.g., theft and
fraud)''.
The Commentary to Sec. 3D1.3 captioned ``Application Notes'' is
amended in Note 3 by striking ``(e.g., theft and fraud)''.
The ``Illustrations of the Operation of the Multiple-Count Rules''
after Sec. 3D1.5 is amended in illustration 4 by striking ``Sec. 2F1.1
(Fraud and Deceit)'' and inserting ``2B1.1 (Theft, Property
Destruction, and Fraud)''; and by striking illustration 2 in its
entirety; and by redesignating illustrations 3 and 4 as illustrations 2
and 3.
Chapter Eight is amended by striking ``Larceny, Embezzlement, and
Other Forms of Theft'' wherever it appears and inserting ``Theft,
Property Destruction, and Fraud''.
Chapter Eight is amended by striking ``2F1.1 (Fraud and Deceit)''
wherever it appears and inserting ``Sec. 2B1.1 (Theft, Property
Destruction, and Fraud)''.
The Commentary to Sec. 8A1.2 captioned ``Application Notes'' is
amended in Note 3(i) by striking ``Sec. '' before ``Sec. 2B1.1''; and
by striking ``(Larceny, Embezzlement, and Other Forms of Theft),
Sec. 2F1.1 (Fraud and Deceit)'' and inserting ``(Theft, Property
Destruction, and Fraud)''.
Section 8C2.1 subsection (a) is amended by striking ``2B1.3'' and
inserting ``2B1.4''; and by striking ``Secs. 2F1.1, 2F1.2;'';
Section 8C2.1 subsection (a) is amended by striking ``2C1.6,''.
Appendix A (Statutory Index) is amended in the line referenced to
15 U.S.C. Sec. 1281 by striking ``2B1.3 `` and inserting ``2B1.1'';
in the lines referenced to 16 U.S.C. Secs. 114, 117c, 123, 146,
413, and 433 by striking ``2B1.3'';
in the lines referenced to any of 18 U.S.C. Secs. 32(a)(b), 33, 37,
43, 112(a), 970(a), 1030(a)(5), 1361, 1363, 1366, 1702, 1705, 1706,
1857, 2275, 2276, 2280, 2281, 2332a, by striking ``2B1.3'' and
inserting ``2B1.1'';
in the lines referenced to any of 18 U.S.C. Secs. 1852 through 1854
by striking ``2B1.3'';
in the line referenced to 49 U.S.C. App. Sec. 1687(g) by striking
``2B1.3'' and inserting ``2B1.1''.
in the line referenced to 18 U.S.C. Sec. 217 by striking ``2C1.6''
and inserting ``2C1.2''; in the lines referenced to any of 7 U.S.C.
Secs. 6, 6b(A), 6b(B), 6b(C), 6c, 6h, 6o, 13(a)(2), 13(a)(3), 13(a)(4),
23, 270, 2024(b), and 2024(c) by striking ``2F1.1'' and inserting
``2B1.1'';
in the line referenced to 12 U.S.C. Sec. 631 by striking ``2F1.1''
and inserting ``2B1.1'';
in the lines referenced to any of 15 U.S.C. Secs. 50, 77e, 77q,
77x, 78j, 80-b-6, 158, 645(a), 714m(a), 1644, 1681q, and 1693n(a) by
striking ``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 15 U.S.C. Sec. 645(b) by striking ``,
2F1.1'';
in the line referenced to 15 U.S.C. Sec. 714m(b) by striking ``,
2F1.1'';
in the lines referenced to any of 16 U.S.C. Secs. 831t(b) and
831t(c) by striking ``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 18 U.S.C. Sec. 152 by striking ``2F1.1''
and inserting ``2B1.1'';
in the line referenced to 18 U.S.C. Sec. 153 by striking ``,
2F1.1'';
in the line referenced to 18 U.S.C. Sec. 500 by striking ``,
2F1.1'';
in the line referenced to 18 U.S.C. Sec. 501 by striking ``2F1.1''
and inserting ``2B1.1'';
in the lines referenced to any of 18 U.S.C. Secs. 502, 503, 505-
510, 513, 514, and 642 by striking ``2F1.1'' and inserting ``2B1.1'';
in the lines referenced to any of 18 U.S.C. Sec. 656, 657, 659,
663, 665(a), and 666(a)(1)(A), by striking ``, 2F1.1'';
[[Page 65992]]
in the lines referenced to any of 18 U.S.C. Secs. 709 and 712 by
striking ``2F1.1'' and inserting ``2B1.1'';
in the lines referenced to any of 18 U.S.C. Secs. 911, 914, 915,
917, 1001-1007, 1010-1022 by striking ``2F1.1'' and inserting
``2B1.1'';
in the line referenced to 18 U.S.C. Sec. 1023 by striking ``,
2F1.1'';
in the lines referenced to any of 18 U.S.C. Secs. 1025, 1026, 1028,
1029, 1030(a)(6), 1031, 1032 by striking ``2F1.1'' and inserting
``2B1.1'';
in the line referenced to 18 U.S.C. Sec. 1033 by striking ``,
2F1.1'';
in the lines referenced to any of 18 U.S.C. Secs. 1035, 1341-1344,
1347, 1422, 1704, 1708, 1712, 1716C, 1720, 1728, 1919, 1920, 1923,
2072, 2073, 2197, and 2272 by striking ``2F1.1'' and inserting
``2B1.1'';
in the lines referenced to any of 18 U.S.C. Secs. 2315 and 2316 by
striking ``, 2F1.1'';
in the lines referenced to any of 19 U.S.C. Secs. 1434-1436, 1919,
and 2316 by striking ``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 20 U.S.C. Sec. 1097(a) by striking ``,
2F1.1'';
in the lines referenced to any of 20 U.S.C. Secs. 1097(b) and
1097(d) by striking ``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 21 U.S.C. Sec. 333(a)(2) by striking
``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 22 U.S.C. Secs. 1980(g), 2197(n), and
4221 by striking ``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 25 U.S.C. Sec. 450d by striking ``,
2F1.1'';
in the line referenced to 26 U.S.C. Sec. 7208 by striking ``2F1.1''
and inserting ``2B1.1'';
in the lines referenced to any of 26 U.S.C. Secs. 7214 and 7232 by
striking ``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 29 U.S.C. Sec. 1141 by striking ``2F1.1''
and inserting ``2B1.1'';
in the lines referenced to any of 38 U.S.C. Secs. 787 and 3502 by
striking ``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 41 U.S.C. Sec. 423(e) striking ``2F1.1''
and inserting ``2B1.1'';
in the lines referenced to any of 42 U.S.C. Secs. 408, 1307(a),
1307(b), 1320a-7b, 1383(d)(2), 1383a(a), 1383a(b), 1395nn(a),
1395nn(c), 1396h(a), 1713 by striking ``2F1.1'' and inserting
``2B1.1'';
in the line referenced to 42 U.S.C. Sec. 1760(g) by striking ``,
2F1.1'';
in the line referenced to 42 U.S.C. Sec. 1761(o)(1) by striking
``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 42 U.S.C. Secs. 1761(o)(2), by striking
``, 2F1.1'';
in the line referenced to 42 U.S.C. Sec. 3220(a) by striking
``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 42 U.S.C. Sec. 3220(b) by striking ``,
2F1.1'';
in the line referenced to 42 U.S.C. Sec. 3426 by striking ``2F1.1''
and inserting ``2B1.1'';
in the line referenced to 42 U.S.C. Sec. 3791 by striking ``,
2F1.1'';
in the line referenced to 42 U.S.C. Sec. 3792 by striking ``2F1.1''
and inserting ``2B1.1'';
in the line referenced to 42 U.S.C. Sec. 3795 by striking ``,
2F1.1'';
in the line referenced to 42 U.S.C. Sec. 5157 by striking ``2F1.1''
and inserting ``2B1.1'';
in the line referenced to 45 U.S.C. Sec. 359(a) by striking
``2F1.1'' and inserting ``2B1.1'';
in the line referenced to 46 U.S.C. Sec. 1276 by striking ``2F1.1''
and inserting ``2B1.1'';
in the lines referenced to any of 49 U.S.C. Secs. 121, 11903,
14912, 16102, 80116, by striking ``2F1.1'' and inserting ``2B1.1'';
in the lines referenced to any of 7 U.S.C. Sec. 13(d) and 13(f) by
striking ``2F1.2'' and inserting ``2B1.4'';
in the line referenced to 15 U.S.C. Sec. 78j by striking ``2F1.2''
and inserting ``2B1.4''; and
in the line referenced to 18 U.S.C. Sec. 1902 by striking ``2F1.2''
and inserting ``2B1.4'.
Part III--Conditions of Probation and Supervised Release
6. Synopsis of Proposed Amendment: In the Departments of Commerce,
Justice, and State, the Judiciary, and Related Agencies Appropriations
Act, 1998, Pub. L. 105-119, Congress amended sections 3563(a) and
3583(d) of title 18, United States Code, to add a new mandatory
condition of probation for persons convicted of sex offenses. The new
mandatory condition requires a person convicted of a sex offense (as
described in 18 U.S.C. Sec. 4042(c)(4)) to report that person's address
and any change of residence to the probation officer supervising the
case and to register as a sex offender in any State where the person
resides, works, or is a student. These amendments to sections 3563(a)
and 3583(d) become effective one year after November 26, 1997.
The following proposed amendment would add this new condition to
the mandatory conditions of probation and supervised release listed in
Secs. 5B1.3 and 5D1.3.
Proposed Amendment: Subsection 5B1.3(a) is amended by adding at the
end the following new subdivision:
``(9) a defendant convicted of a sexual offense as described in 18
U.S.C. Sec. 4042(c)(4) shall report the address where the defendant
will reside and any subsequent change of residence to the probation
officer responsible for supervision, and shall register as a sex
offender in any State where the person resides, is employed, carries on
a vocation, or is a student (see 18 U.S.C. Sec. 3563(a)(8)).''.
Subsection 5D1.3(a) is amended by adding at the end the following
new subdivision:
``(7) a defendant convicted of a sexual offense as described in 18
U.S.C. Sec. 4042(c)(4) shall report the address where the defendant
will reside and any subsequent change of residence to the probation
officer responsible for supervision, and shall register as a sex
offender in any State where the person resides, is employed, carries on
a vocation, or is a student (see 18 U.S.C. Sec. 3583(d)).''.
Part IV--Issues for Comment
7. Unauthorized Compensation: As a result of enacted legislation,
the maximum term of imprisonment for violations of 18 U.S.C. Sec. 209
is now five years if the conduct is willful. Before that change, the
maximum term of imprisonment for any violation of 18 U.S.C. Sec. 209
was one year. The Commission invites comment on whether, in view of the
increased maximum term of imprisonment for violations of 18 U.S.C.
Sec. 209, the guideline offense levels in Sec. 2C1.4 (Payment or
Receipt of Unauthorized Compensation) should be increased, and, if so,
by what amount.
8. Cloning of Wireless Telephones: (A). The Wireless Telephone
Protection Act, Pub. L. 105-418 (the ``Act''), provides a general
directive to the Commission to review and amend, if appropriate, the
sentencing guidelines and policy statements to provide an appropriate
penalty for offenses involving the cloning of wireless telephones,
including attempts and conspiracies. The Commission invites comment on
whether and how it should amend the guidelines for offenses involving
the cloning of wireless telephones, including offenses involving an
attempt or conspiracy to clone a wireless telephone. See 18 U.S.C.
Sec. 1029(e)(9) (as amended by the Act).
Specifically, should the Commission amend Sec. 2F1.1 (Fraud), the
guideline to which such offenses are referenced, to provide a tailored
enhancement (specific offense characteristic) if the offense, including
any relevant conduct, involved the use of hardware (a ``copycat box'')
or software which has been configured for altering or modifying a
wireless telephone? If so, what should be the magnitude of such an
enhancement? Should the
[[Page 65993]]
Commission provide a specific offense characteristic in Sec. 2F1.1, or
a cross reference to other offense guidelines, if the cloning offense
facilitated, or was in connection with, another offense? If such a
specific offense characteristic or a cross reference is warranted, by
how many levels should the sentence for such offenders be increased?
(B). If the Commission does not adopt a comprehensive revision of
the guidelines and commentary for theft, property destruction, and
fraud offenses, such as the comprehensive revision set forth in the
Economic Crime Package proposed in Amendment 2, above (which, in the
proposed loss definition, includes a special rule for access devices
and purloined numbers), should the Commission nevertheless adopt a
special rule for cases involving stolen, unauthorized, or counterfeit
access devices used in cloning offenses? Such a special rule could, for
example, provide for a minimal loss amount of $100 in the case of each
such access device.
9. Nuclear, Chemical, and Biological Weapons: Section 1423(a) of
the Defense Authorization Act for Fiscal Year 1997 expressed the sense
of Congress that the guidelines for the offenses of importation,
attempted importation, exportation, and attempted exportation of
nuclear, biological, and chemical weapons materials provide inadequate
punishment for those offenses. Section 1423(b) of that Act urged the
Commission to amend the guidelines to increase the penalties for such
offenses under (1) section 11 of the Export Administration Act of 1979
(50 U.S.C. App. 2410); (2) sections 38 and 40 of the Arms Export
Control Act (22 U.S.C. 2778 and 2780); (3) the International Economic
Powers Act (50 U.S.C. 1701 et seq.); and (4) section 309(c) of the
Nuclear Non-Proliferation Act of 1978 (22 U.S.C. 2156a(c)).
The Commission invites comment on whether, as Congress suggests,
the guidelines, particularly Secs. 2M5.1 (Evasion of Export Controls)
and 2M5.2 (Exportation of Arms, Munitions, or Military Equipment or
Services Without Required Validated Export License) provide inadequate
penalties for these offenses. If the guidelines provide inadequate
punishment, how should the Commission address that inadequacy? Should
the base offense level be increased? Are there specific offense
characteristics that should be added to the guidelines to take into
account more egregious offense conduct? Alternatively, should
encouraged upward departure commentary be added to these guidelines for
cases in which more egregious conduct occurs?
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 201 of the Chemical Weapons Convention Implementation Act
of 1998 creates a new offense at 18 U.S.C. Sec. 229. The new offense
makes it unlawful for a person knowingly (1) to develop, produce,
otherwise acquire, transfer directly or indirectly, receive, stockpile,
retain, own, possess, or use, or threaten to use, any chemical weapon;
or (2) to assist or induce, in any way, any person to violate paragraph
(1), or to attempt or conspire to violate paragraph (1). The penalty,
set out in 18 U.S.C. Sec. 229A, is any term of years, or, if the death
of another person results, death or life imprisonment.
The Commission also invites comment as to how the guidelines should
be amended to cover 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
conduct that violates these statutes. If the Commission were to select
this approach, what changes, if any, would be appropriate to
accommodate these offenses? For example, should an alternative base
offense level be added in the case of biological or chemical materials,
weapons, or facilities? Are there specific offense characteristics that
should be added to take into account the range of likely offense
conduct? Should commentary encouraging an upward (or downward)
departure be added for cases in which certain atypical conduct occurs?
10. Tax Privacy Issues: The Internal Revenue Service Restructuring
and Reform Act of 1998, Pub. L. 105-206, created an offense, codified
at 26 U.S.C. Sec. 7217, that makes it unlawful for the President, Vice
President, anyone employed in their executive offices, or certain other
high-ranking officials of the executive branch to request the Internal
Revenue Service to conduct or terminate an audit or other investigation
of the tax liability of any person. The maximum term of imprisonment is
5 years.
The Act also amended 26 U.S.C. Sec. 7213, which makes it unlawful
for federal and state employees and certain other persons to disclose
tax return information. The Act amended Sec. 7213 to also make it
unlawful to disclose tax-related computer software. The maximum term of
imprisonment for such offenses is 5 years.
The Taxpayer Browsing Protection Act, Pub. L. 105-35, created an
offense, codified at 26 U.S.C. Sec. 7213A, that makes it unlawful for
federal and state employees and certain other persons to inspect tax
return information in any way other than that authorized under the
Internal Revenue Code. The maximum term of imprisonment for such
offenses is one year.
These new provisions are similar in nature to another tax offense,
codified at 26 U.S.C. Sec. 7216, which makes it unlawful for persons
who are in the business of preparing tax returns to knowingly or
recklessly disclose any such information or to use any such information
for any purpose other than the preparation of the tax return. The
maximum term of imprisonment for such offenses is one year.
The Commission invites comment on whether and/or how the sentencing
guidelines might be amended to address violations of 26 U.S.C.
Secs. 7213, 7213A, 7216, and 7217. One approach may be to rework the
guideline pertaining to the interception of communications or
eavesdropping, Sec. 2H3.1, because arguably all of the offenses
described above implicate the privacy interests of the taxpayer whose
tax information was the subject of the offense. An alternative approach
would be to create a new guideline dealing with the invasion of privacy
with respect to the audit, inspection, or disclosure of tax
information. Are there other approaches that might be appropriate to
address these offenses? The Commission invites alternative suggestions
with proposed offense levels.
[FR Doc. 98-31756 Filed 11-27-98; 8:45 am]
BILLING CODE 2210-40-P, 2211-01-P
