[Federal Register Volume 63, Number 98 (Thursday, May 21, 1998)]
[Notices]
[Pages 28202-28211]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13584]
[[Page 28201]]
_______________________________________________________________________
Part III
United States Sentencing Commission
_______________________________________________________________________
Amendments to the Sentencing Guidelines for United States Courts;
Notice
Federal Register / Vol. 63, No. 98 / Thursday, May 21, 1998 /
Notices
[[Page 28202]]
UNITED STATES SENTENCING COMMISSION
Amendments to the Sentencing Guidelines for United States Courts
AGENCY: United States Sentencing Commission.
ACTION: Notice of submission to Congress of amendments to the
sentencing guidelines, policy statements, and official commentary;
notice of proposed amendment for public comment.
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SUMMARY: Pursuant to its authority under section 994(p) of title 28,
United States Code, the United States Sentencing Commission, on May 1,
1998, submitted to the Congress amendments to the sentencing
guidelines, policy statements, and official commentary together with
reasons for the amendments. The amendments submitted to Congress are
set forth in Part I of this notice.
In addition, pursuant to its authority under section 994(a), (o),
and (p) of such title and section 2(g) of the No Electronic Theft Act
of 1997, Pub. L. 105-147, the Commission is considering promulgating an
amendment to the guidelines and commentary in order to implement
directives to the Commission contained in the No Electronic Theft Act.
The proposed amendment and a synopsis of the issues addressed are set
forth in Part II of this notice. The Commission seeks comment on the
proposed amendment, as well as alternative proposed amendments.
Bracketed text within a proposal indicates alternative proposals and
that the Commission invites comment and suggestions for appropriate
policy choices.
DATES: Pursuant to 28 U.S.C. 994(p), the Commission has specified an
effective date of November 1, 1998, for the amendments submitted to
Congress, subject to their acceptability to Congress.
Written public comment on the amendments proposed to implement the
directives in the No Electronic Theft Act of 1997 should be submitted
not later than August 31, 1998.
ADDRESSES: Public comment on the amendment proposed to implement the
directives in the No Electronic Theft Act of 1997 should be sent to:
United States Sentencing Commission, One Columbus Circle, N.E., Suite
2-500, Washington, D.C. 20002-8002, Attention: Public Information.
FOR FURTHER INFORMATION CONTACT: Mike Courlander, Public Affairs
Officer, telephone: (202) 273-4590.
SUPPLEMENTARY INFORMATION: The United States Sentencing Commission, an
independent agency in the judicial branch of the U.S. Government, is
empowered by 28 U.S.C. 994(a) to promulgate sentencing guidelines and
policy statements for federal sentencing courts. The statute further
directs the Commission to review periodically and revise guidelines
previously promulgated and authorizes it to submit guideline amendments
to the Congress not later than the first day of May each year. See 28
U.S.C. 994(o), (p). Additionally, a number of the amendments included
in Part I of this report are authorized and directed by, or otherwise
respond to, a variety of enactments of the 105th Congress. Absent
action of Congress to the contrary, the amendments become effective on
the date specified by the Commission (i.e., November 1, 1998) by
operation of law.
Notice of the amendments submitted to the Congress on May 1, 1998,
was first published in the Federal Register of January 6, 1998 (63 FR
602). Public hearings on the proposed amendments were held in San
Francisco, CA, on March 5, 1998, and in Washington, DC, on March 12,
1998. After review of the hearing testimony and additional public
comment, the Commission promulgated the amendments set forth in Part I
below, each having been approved by at least four voting Commissioners.
In the Federal Register of January 6, 1998, the Commission also
published a proposal from the Department of Justice on the
implementation of the directives contained in the No Electronic Theft
Act, as well as a general issue for comment on how these directives
might best be carried out. The Commission heard testimony on these
directives at the public hearing in Washington, DC, on March 12, 1998,
and reviewed additional written public comment received on this issue
in response to the Federal Register notice. The Commission also
informally solicited and received the input of parties interested in
copyright and trademark infringement sentencing issues, such as
representatives of the Department of Justice, the defense bar, and
other key groups, in an effort to determine how best to implement the
directives. As a result of this input and after reviewing the hearing
testimony and additional written public comment, the Commission voted,
on April 23, 1998, to publish for comment the three proposals contained
in Part II, below.
In connection with its ongoing process of guideline review, the
Commission welcomes comment on any aspect of the sentencing guidelines,
policy statements, and official commentary.
Authority: 28 U.S.C. 994(a), (o), (p).
Richard P. Conaboy
Chairman.
Part I--Amendments Submitted to Congress on May 1, 1998
1. Amendment: Section 2B1.1(b) is amended by adding at the end the
following new subdivision:
``(8) If the offense involved theft of property from a national
cemetery, increase by 2 levels.''.
The Commentary to Sec. 2B1.1 captioned ``Application Notes'' is
amended in Note 1 by adding at the end the following new paragraph:
``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.''.
The Commentary to Sec. 2B1.1 captioned ``Background'' is amended by
adding at the end the following new paragraph:
``Subsection (b)(8) implements the instruction to the Commission in
Section 2 of Public Law 105-101.''.
Section 2B1.3(b) is amended by adding at the end the following new
subdivision:
``(4) If property of a national cemetery was damaged or destroyed,
increase by 2 levels.''.
The Commentary to Sec. 2B1.3 captioned ``Application Notes'' is
amended in Note 1 by adding at the end the following new paragraph:
``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.''.
The Commentary to Sec. 2B1.3 captioned ``Background'' is amended by
inserting before the first paragraph the following:
``Subsection (b)(4) implements the instruction to the Commission in
Section 2 of Public Law 105-101.''.
Section 2K1.4(b) is amended by striking ``Characteristic'' and
inserting ``Characteristics''; and by adding at the end the following
new subdivision:
``(2) If the base offense level is not determined under (a)(4), and
the offense occurred on a national cemetery, increase by 2 levels.''.
The Commentary to Sec. 2K1.4 is amended by adding at the end the
following new application note and background commentary:
``4. National cemetery means a cemetery (A) established under
section
[[Page 28203]]
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.
Background: Subsection (b)(2) implements the directive to the
Commission in Section 2 of Public Law 105-101.''.
Reason for Amendment: The purpose of this amendment is to provide
an increase for property offenses committed against national
cemeteries. This amendment implements the directive to the Commission
in the Veterans' Cemetery Protection Act of 1997, Pub. L. 105-101,
Sec. 2, 111 Stat. 2202, 2202 (1997). This Act directs the Commission to
provide a sentence enhancement of not less than two levels for any
offense against the property of a national cemetery. In response to the
legislation, this amendment adds a two-level enhancement to Secs. 2B1.1
(Theft), 2B1.3 (Property Destruction), and 2K1.4 (Arson). National
cemetery is defined in the same way as that term is defined in the
statute.
2. Amendment: Section 2F1.1(b) is amended by striking subdivision
(5) in its entirety and inserting the following:
``(5) (A) If the defendant relocated, or participated in
relocating, a fraudulent scheme to another jurisdiction to evade law
enforcement or regulatory officials; (B) if a substantial part of a
fraudulent scheme was committed from outside the United States; or (C)
if the offense otherwise involved sophisticated concealment, increase
by 2 levels. If the resulting offense level is less than level 12,
increase to level 12.''.
Section 2F1.1(b) is amended by adding at the end the following new
subdivision:
``(7) If the offense was committed through mass-marketing, increase
by 2 levels.''.
The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is
amended by redesignating Notes 14 through 18, as Notes 15 through 19,
respectively; and by inserting after Note 13 the following new Note 14:
``14. 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 concealment
means especially complex or especially intricate offense conduct in
which deliberate steps are taken to make the offense, or its extent,
difficult to detect. Conduct such as hiding assets or transactions, or
both, through the use of fictitious entities, corporate shells, or
offshore bank accounts ordinarily indicates sophisticated
concealment.''.
The Commentary to Sec. 2F1.1 captioned ``Application Notes'' is
amended by adding at the end the following new note:
``20. Mass-marketing, as used in subsection (b)(7), 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.''.
Section 2T1.1(b) is amended by striking subdivision (2) in its
entirety and inserting the following:
``(2) If the offense involved sophisticated concealment, increase
by 2 levels.''.
The Commentary to Sec. 2T1.1 captioned ``Application Notes'' is
amended by striking Note 4 in its entirety and inserting the following:
``4. For purposes of subsection (b)(2), sophisticated concealment
means especially complex or especially intricate offense conduct in
which deliberate steps are taken to make the offense, or its extent,
difficult to detect. Conduct such as hiding assets or transactions, or
both, through the use of fictitious entities, corporate shells, or
offshore bank accounts ordinarily indicates sophisticated
concealment.''.
Section 2T1.4(b) is amended by striking subdivision (2) in its
entirety and inserting the following:
``(2) If the offense involved sophisticated concealment, increase
by 2 levels.''.
The Commentary to Sec. 2T1.4 captioned ``Application Notes'' is
amended by striking Note 3 in its entirety and inserting the following:
``3. For purposes of subsection (b)(1), sophisticated concealment
means especially complex or especially intricate offense conduct in
which deliberate steps are taken to make the offense, or its extent,
difficult to detect. Conduct such as hiding assets or transactions, or
both, through the use of fictitious entities, corporate shells, or
offshore bank accounts ordinarily indicates sophisticated
concealment.''.
Section 2T3.1(b) is amended by striking subdivision (1) in its
entirety and inserting the following:
``(1) If the offense involved sophisticated concealment, increase
by 2 levels.''.
The Commentary to Sec. 2T3.1 captioned ``Application Notes'' is
amended by adding at the end the following new note:
``3. For purposes of subsection (b)(1), sophisticated concealment
means especially complex or especially intricate offense conduct in
which deliberate steps are taken to make the offense, or its extent,
difficult to detect. Conduct such as hiding assets or transactions, or
both, through the use of fictitious entities, corporate shells, or
offshore bank accounts ordinarily indicates sophisticated
concealment.''.
Reason for Amendment: This amendment has three purposes: (1) to
provide an increase for fraud offenses that use mass-marketing to carry
out the fraud; (2) to provide an increase for fraud offenses that
involve conduct, such as sophisticated concealment, that makes it
difficult for law enforcement authorities to discover the offense or
apprehend the offender; and (3) to clarify and conform an existing
enhancement that provides an increase for tax offenses that similarly
involve sophisticated concealment.
First, this amendment adds a two-level enhancement in the fraud
guideline for offenses that are committed through mass-marketing. The
Commission identified mass-marketing as a central component of
telemarketing fraud and also determined that there were other
fraudulent schemes that relied on mass-marketing to perpetrate the
offense (for example, Internet fraud). Accordingly, rather than provide
a limited enhancement for telemarketing fraud only, the Commission
determined that a generally applicable specific offense characteristic
in the fraud guideline would better provide consistent and
proportionate sentencing increases for similar types of fraud, while
also ensuring increased sentences for persons who engage in mass-
marketed telemarketing fraud.
Second, this amendment provides an increase for fraud offenses that
involve conduct, such as sophisticated concealment, that makes it
difficult for law enforcement authorities to discover the offense or
apprehend the offenders. The new enhancement provides a two-level
increase and a ``floor'' offense level of level 12 in the fraud
guideline and replaces the current enhancement for ``the use of foreign
bank accounts or transactions to conceal the true nature or extent of
fraudulent conduct.'' There are three alternative provisions to the
enhancement. The first two prongs address conduct that the Commission
[[Page 28204]]
has been informed often relates to telemarketing fraud, although the
conduct also may occur in connection with fraudulent schemes
perpetrated by other means. Specifically, the Commission has been
informed that fraudulent telemarketers increasingly are conducting
their operations from Canada and other locations outside the United
States. Additionally, testimony offered at a Commission hearing on
telemarketing fraud indicated that telemarketers often relocate their
schemes to other jurisdictions once they know or suspect that
enforcement authorities have discovered the scheme. Both types of
conduct are specifically covered by the new enhancement. The third
prong provides an increase if any offense covered by the fraud
guideline otherwise involves sophisticated concealment. This prong
addresses cases in which deliberate steps are taken to make the
offense, or its extent, difficult to detect.
Third, this amendment provides a two-level enhancement for conduct
related to sophisticated concealment of a tax offense. The primary
purpose of this amendment is to conform the language of the current
enhancement for ``sophisticated means'' in the tax guidelines to the
essentially equivalent language of the new sophisticated concealment
enhancement provided in the fraud guideline. Additionally, the
amendment resolves a circuit conflict regarding whether the enhancement
applies based on the personal conduct of the defendant or the overall
offense conduct for which the defendant is accountable. Consistent with
the usual relevant conduct rules, application of this new enhancement
for sophisticated concealment accordingly is based on the overall
offense conduct for which the defendant is accountable.
3. Amendment: Section 2K2.1(a) is amended in subdivision (4) by
striking ``the defendant'' after ``20, if''; in subdivision (4)(A) by
inserting ``the defendant'' before ``had one''; in subdivision (4)(B)
by striking ``is a prohibited person, and''; and in subdivision (4)(B)
by inserting ``; and the defendant (i) is a prohibited person; or (ii)
is convicted under 18 U.S.C. 922(d)'' after ``' 921(a)(30)''.
Section 2K2.1(a)(6) is amended by inserting ``(A)'' after
``defendant''; and by inserting ``; or (B) is convicted under 18 U.S.C.
922(d)'' after ``person''.
The Commentary to Sec. 2K2.1 captioned ``Application Notes'' is
amended in Note 6 by striking ``or'' before ``(vi)''; and by inserting
``; or (vii) has been convicted in any court of a misdemeanor crime of
domestic violence as defined in 18 U.S.C. 921(a)(33)'' after
``922(d)(8)''.
The Commentary to Sec. 2K2.1 captioned ``Application Notes'' is
amended in Note 12 in the first paragraph by striking ``924(j) or (k),
or 26 U.S.C. 5861(g) or (h)'' and inserting ``924 (l) or (m)''; and in
the second paragraph by striking ``only'' after ``if the''; and by
inserting ``or 26 U.S.C. 5861(g) or (h)'' after ``922(k)''.
Reason for Amendment: This amendment has three purposes: (1) to
change the definition of ``prohibited person'' in the firearms
guideline so that it includes a person convicted of a misdemeanor crime
of domestic violence; (2) to provide the same base offense levels for
both a prohibited person and a person who is convicted under 18 U.S.C.
922(d) of transferring a firearm to a prohibited person; and (3) to
make several technical and conforming changes to the firearms
guideline.
The first part of the amendment amends Application Note 6 of
Sec. 2K2.1 (Unlawful Receipt, Possession, or Transportation of Firearms
or Ammunition; Prohibited Transactions Involving Firearms or
Ammunition) to include a person convicted of a misdemeanor crime of
domestic violence within the scope of ``prohibited person'' for
purposes of that guideline. It also defines ``misdemeanor crime of
domestic violence'' by reference to the new statutory definition of
that term in 18 U.S.C. 921(a).
This part of the amendment addresses section 658 of the Treasury,
Postal Service, and General Government Appropriations Act, Pub. L. 104-
208, 110 Stat. 3009 (1996) (contained in the Omnibus Consolidated
Appropriations Act for Fiscal Year 1997). Section 658 amended 18 U.S.C.
922(d) to prohibit the sale of a firearm or ammunition to a person who
has been convicted in any court of a misdemeanor crime of domestic
violence. It also amended 18 U.S.C. 922(g) to prohibit a person who has
been convicted in any court of a misdemeanor crime of domestic violence
from transporting or receiving a firearm or ammunition. Section
922(s)(3)(B)(i), which lists the information a person not licensed
under 18 U.S.C. 923 must include in a statement to the handgun
importer, manufacturer, or dealer, was amended to require certification
that the person to whom the gun is transferred was not convicted in any
court of a misdemeanor crime of domestic violence. Section 658 also
amended 18 U.S.C. 921(a) to define ``misdemeanor crime of domestic
violence''.
Violations of 18 U.S.C. 922(d) and (g) are covered by Sec. 2K2.1.
The new provisions at Sec. 922(d) (sale of a firearm to a ``prohibited
person'') and Sec. 922(g) (transporting, possession, and receipt of a
firearm by a ``prohibited person'') affect Application Note 6 of
Sec. 2K2.1, which defines ``prohibited person''. This part of the
amendment conforms Application Note 6 of Sec. 2K2.1 to the new
statutory provisions.
The second part of this amendment increases the base offense level
for a defendant who is convicted under 18 U.S.C. 922(d), which
prohibits the transfer of a firearm to a prohibited person.
Specifically, this part amends the two alternative base offense levels
that pertain to prohibited persons in the firearms guideline in order
to make those offense levels applicable to the person who transfers the
firearm to the prohibited person. A person who is convicted under 18
U.S.C. 922(d) has been shown beyond a reasonable doubt either to have
known, or to have had reasonable cause to believe, that the transferee
was a prohibited person.
This part of the amendment derives from a recommendation by the
United States Department of Justice and is generally consistent with a
proposed directive contained in juvenile justice legislation approved
by the Senate Judiciary Committee in 1997.
The third part of this amendment makes two technical and conforming
changes in Application Note 12 of Sec. 2K2.1. First, the amendment
corrects statutory references to 18 U.S.C. 924(j) and (k), which were
added as a result of the Violent Crime Control and Law Enforcement Act
of 1994, Pub. L. 103-322, 108 Stat. 1796 (1994). In the Economic
Espionage Act of 1996, Pub. L. 104-294, 110 Stat. 3488 (1996), Congress
again amended 18 U.S.C. 924 and redesignated the provisions as
subsections (l) and (m). The amendment conforms Application Note 12 to
that redesignation. Second, the amendment corrects the misplacement of
the reference to 26 U.S.C. 5861(g) and (h).
4. Amendment: The Commentary to Sec. 2J1.6 captioned ``Application
Notes'' is amended in Note 3 in the first paragraph by striking
``3D1.2'' and inserting ``3D1.1''; and by striking the second paragraph
in its entirety and inserting the following as the new second
paragraph:
``In the case of a conviction on both the underlying offense and
the failure to appear, the failure to appear is treated under
Sec. 3C1.1 (Obstructing or Impeding the Administration of Justice) as
an obstruction of the underlying offense, and the failure to appear
count and the count or counts for the underlying
[[Page 28205]]
offense are grouped together under Sec. 3D1.2(c). (Note that 18 U.S.C.
3146(b)(2) does not require a sentence of imprisonment on a failure to
appear count, although if a sentence of imprisonment on the failure to
appear count is imposed, the statute requires that the sentence be
imposed to run consecutively to any other sentence of imprisonment.
Therefore, unlike a count in which the statute mandates both a minimum
and a consecutive sentence of imprisonment, the grouping rules of
Secs. 3D1.1-3D1.5 apply. See Sec. 3D1.1(b), comment. (n.1), and
Sec. 3D1.2, comment. (n.1).) The combined sentence will then be
constructed to provide a `total punishment' that satisfies the
requirements both of Sec. 5G1.2 (Sentencing on Multiple Counts of
Conviction) and 18 U.S.C. 3146(b)(2). For example, if the combined
applicable guideline range for both counts is 30-37 months and the
court determines that a `total punishment' of 36 months is appropriate,
a sentence of 30 months for the underlying offense plus a consecutive
six months' sentence for the failure to appear count would satisfy
these requirements. (Note that the combination of this instruction and
increasing the offense level for the obstructive, failure to appear
conduct has the effect of ensuring an incremental, consecutive
punishment for the failure to appear count, as required by 18 U.S.C.
3146(b)(2).)''.
The Commentary to Sec. 2J1.6 captioned ``Application Notes'' is
amended by redesignating Note 4 as Note 5; and by inserting the
following as new Note 4:
``4. If a defendant is convicted of both the underlying offense and
the failure to appear count, and the defendant committed additional
acts of obstructive behavior (e.g., perjury) during the investigation,
prosecution, or sentencing of the instant offense, an upward departure
may be warranted. The upward departure will ensure an enhanced sentence
for obstructive conduct for which no adjustment under Sec. 3C1.1
(Obstruction of Justice) is made because of the operation of the rules
set out in Application Note 3.''.
The Commentary to Sec. 2P1.2 captioned ``Application Notes'' is
amended in Note 2 by striking ``as amended,'' after ``18 U.S.C.
1791(c),''; and by inserting ``by the inmate'' after ``served''.
The Commentary to Sec. 2P1.2 captioned ``Application Notes'' is
amended in Note 2 by inserting before the first paragraph the
following:
``In a case in which the defendant is convicted of the underlying
offense and an offense involving providing or possessing a controlled
substance in prison, group the offenses together under Sec. 3D1.2(c).
(Note that 18 U.S.C. 1791(b) does not require a sentence of
imprisonment, although if a sentence of imprisonment is imposed on a
count involving providing or possessing a controlled substance in
prison, section 1791(c) requires that the sentence be imposed to run
consecutively to any other sentence of imprisonment for the controlled
substance. Therefore, unlike a count in which the statute mandates both
a minimum and a consecutive sentence of imprisonment, the grouping
rules of Secs. 3D1.1-3D1.5 apply. See Sec. 3D1.1(b), comment. (n.1),
and Sec. 3D1.2, comment. (n.1).) The combined sentence will then be
constructed to provide a `total punishment' that satisfies the
requirements both of Sec. 5G1.2 (Sentencing on Multiple Counts of
Conviction) and 18 U.S.C. 1791(c). For example, if the combined
applicable guideline range for both counts is 30-37 months and the
court determines a `total punishment' of 36 months is appropriate, a
sentence of 30 months for the underlying offense plus a consecutive six
months' sentence for the providing or possessing a controlled substance
in prison count would satisfy these requirements.''.
The Commentary to Sec. 3C1.1 captioned ``Application Notes'' is
amended in Note 6 by striking ``Where'' and inserting ``If''; and by
striking ``where'' both places it appears and inserting ``if''.
The Commentary to Sec. 3C1.1 captioned ``Application Notes'' is
amended in Note 7 in the first sentence by striking ``Where'' and
inserting ``If''; by striking ``both of the'' and inserting ``both of
an''; by inserting ``(e.g., 18 U.S.C. Sec. 3146 (Penalty for failure to
appear); 18 U.S.C. Sec. 1621 (Perjury generally))'' after ``obstruction
offense'' the first place it appears; and by striking ``the
underlying'' the first place it appears and inserting ``an
underlying''.
Section 3D1.1(b) is amended by striking the first sentence in its
entirety and inserting the following:
``Exclude from the application of Secs. 3D1.2-3D1.5 any count for
which the statute (1) specifies a term of imprisonment to be imposed;
and (2) requires that such term of imprisonment be imposed to run
consecutively to any other term of imprisonment.''.
The Commentary to Sec. 3D1.1 captioned ``Application Notes'' is
amended by striking Note 1 in its entirety and inserting the following:
``1. Subsection (b) applies if a statute (A) specifies a term of
imprisonment to be imposed; and (B) requires that such term of
imprisonment be imposed to run consecutively to any other term of
imprisonment. See, e.g., 18 U.S.C. 924(c) (requiring mandatory term of
five years to run consecutively). The multiple count rules set out
under this Part do not apply to a count of conviction covered by
subsection (b). However, a count covered by subsection (b) may affect
the offense level determination for other counts. For example, a
defendant is convicted of one count of bank robbery (18 U.S.C. 2113),
and one count of use of a firearm in the commission of a crime of
violence (18 U.S.C. 924(c)). The two counts are not grouped together
pursuant to this guideline, and, to avoid unwarranted double counting,
the offense level for the bank robbery count under Sec. 2B3.1 (Robbery)
is computed without application of the enhancement for weapon
possession or use as otherwise required by subsection (b)(2) of that
guideline. Pursuant to 18 U.S.C. 924(c), the mandatory five-year
sentence on the weapon-use count runs consecutively to the guideline
sentence imposed on the bank robbery count. See Sec. 5G1.2(a).
Unless specifically instructed, subsection (b) does not apply when
imposing a sentence under a statute that requires the imposition of a
consecutive term of imprisonment only if a term of imprisonment is
imposed (i.e., the statute does not otherwise require a term of
imprisonment to be imposed). See, e.g., 18 U.S.C. 3146 (Penalty for
failure to appear); 18 U.S.C. 924(a)(4) (regarding penalty for 18
U.S.C. 922(q) (possession or discharge of a firearm in a school zone));
18 U.S.C. 1791(c) (penalty for providing or possessing a controlled
substance in prison). Accordingly, the multiple count rules set out
under this Part do apply to a count of conviction under this type of
statute.''.
The Commentary to Sec. 3D1.2 captioned ``Application Notes'' is
amended in Note 1 in the third sentence by striking ``mandates
imposition of a consecutive sentence'' and inserting ``(A) specifies a
term of imprisonment to be imposed; and (B) requires that such term of
imprisonment be imposed to run consecutively to any other term of
imprisonment''; and by inserting ``; id., comment. (n.1)'' after
``Sec. 3D1.1(b)''.
Section 5G1.2(a) is amended by striking ``mandates a consecutive
sentence'' and inserting ``(1) specifies a term of imprisonment to be
imposed; and (2) requires that such term of imprisonment be imposed to
run consecutively to any other term of imprisonment''; and by inserting
``by that statute'' after ``determined''.
The Commentary to Sec. 5G1.2 is amended in the last paragraph by
striking the first three sentences and inserting:
[[Page 28206]]
``Subsection (a) applies if a statute (1) specifies a term of
imprisonment to be imposed; and (2) requires that such term of
imprisonment be imposed to run consecutively to any other term of
imprisonment. See, e.g., 18 U.S.C. Sec. 924(c) (requiring mandatory
term of five years to run consecutively to any other term of
imprisonment). The term of years to be imposed consecutively is
determined by the statute of conviction, and is independent of a
guideline sentence on any other count.''.
The Commentary to Sec. 5G1.2 is amended in the last paragraph in
the fourth sentence by inserting ``, e.g.,'' after ``See''; and by
adding at the end the following new sentence:
``Subsection (a) also applies in certain other instances in which
an independently determined and consecutive sentence is required. See,
e.g., Application Note 3 of the Commentary to Sec. 2J1.6 (Failure to
Appear by Defendant), relating to failure to appear for service of
sentence.''.
Reason for Amendment: The purpose of this amendment is to clarify
how several guideline provisions, including those on grouping multiple
counts of conviction, work together to ensure an incremental,
consecutive penalty for a failure to appear count. This amendment
addresses a circuit conflict regarding whether the guideline procedure
of grouping the failure to appear count of conviction with the count of
conviction for the underlying offense violates the statutory mandate of
imposing a consecutive sentence. Compare United States v. Agoro, 996
F.2d 1288 (1st Cir. 1993) (grouping rules apply), and United States v.
Flores, No. 93-3771, 1994 WL 163766 (6th Cir. May 2, 1994)
(unpublished) (same), with United States v. Packer, 70 F.3d 357 (5th
Cir. 1995) (grouping rules defeat statutory purposes of 18 U.S.C.
Sec. 3146), cert. denied, 117 S. Ct. 75 (1996). The amendment maintains
the current grouping rules for failure to appear and obstruction of
justice, but addresses internal inconsistencies among different
guidelines and explains how the guideline provisions work together to
ensure an incremental, consecutive penalty for the failure to appear
count. Specifically, the amendment (1) more clearly distinguishes
between statutes that require imposition of a consecutive term of
imprisonment only if imprisonment is imposed (e.g., 18 U.S.C. Sec. 3146
(Penalty for failure to appear); 18 U.S.C. Sec. 1791(b), (c) (Penalty
for providing or possessing contraband in prison)), and statutes that
require both a minimum term of imprisonment and a consecutive sentence
(e.g., 18 U.S.C. Sec. 924(c) (Use of a firearm in relation to crime of
violence or drug trafficking offense)); (2) states that the method
outlined for determining a sentence for failure to appear and similar
statutes ensures an incremental, consecutive punishment; (3) adds an
upward departure provision if offense conduct involves multiple
obstructive acts; (4) makes conforming changes in Sec. 2P1.2 (Providing
or Possessing Contraband in Prison) because the relevant statute, 18
U.S.C. 1791, is similar to 18 U.S.C. 3146; and (5) makes conforming
changes in Secs. 3C1.1, 3D1.1, 3D1.2, and 5G1.2.
5. Amendment: The Commentary to Sec. 3B1.3 captioned ``Application
Notes'' is amended in the first paragraph of Note 1 in the third
sentence by inserting ``public or private'' after ``position of''; in
the fourth sentence by striking ``would apply'' and inserting
``applies''; and in the last sentence by striking ``would'' and
inserting ``does.''.
The Commentary to Sec. 3B1.3 captioned ``Application Notes'' is
amended by redesignating Note 2 as Note 3; and by inserting the
following as new Note 2:
``2. This enhancement also applies in a case in which the defendant
provides sufficient indicia to the victim that the defendant
legitimately holds a position of private or public trust when, in fact,
the defendant does not. For example, the enhancement applies in the
case of a defendant who (A) perpetrates a financial fraud by leading an
investor to believe the defendant is a legitimate investment broker; or
(B) perpetrates a fraud by representing falsely to a patient or
employer that the defendant is a licensed physician. In making the
misrepresentation, the defendant assumes a position of trust, relative
to the victim, that provides the defendant with the same opportunity to
commit a difficult-to-detect crime that the defendant would have had if
the position were held legitimately.''.
The Commentary to Sec. 3B1.3 captioned ``Background'' is amended by
inserting after the first sentence the following:
``The adjustment also applies to persons who provide sufficient
indicia to the victim that they legitimately hold a position of public
or private trust when, in fact, they do not.''.
Reason for Amendment: The purpose of this amendment is to establish
that the two-level increase for abuse of a position of trust applies to
a defendant who is an imposter, as well as to a person who legitimately
holds and abuses a position of trust. This amendment resolves a circuit
conflict on that issue. Compare United States v. Gill, 99 F.3d 484 (1st
Cir. 1996) (adjustment applied to defendant who posed as licensed
psychologist), and United States v. Queen, 4 F.3d 925 (10th Cir. 1993)
(adjustment applied to defendant who posed as financial broker), cert.
denied, 510 U.S. 1182 (1994), with United States v. Echevarria, 33 F.3d
175 (2d Cir. 1994) (defendant who poses as physician does not occupy a
position of trust). The amendment adopts the majority appellate view
and provides that the abuse of position of trust adjustment applies to
an imposter who pretends to hold a position of trust when in fact he
does not. The Commission has determined that, particularly from the
perspective of the crime victim, an imposter who falsely assumes and
takes advantage of a position of trust is as culpable and deserving of
increased punishment as is a defendant who abuses an actual position of
trust.
6. Amendment: Section 3C1.1 is amended by inserting ``(A)'' after
``If''; by inserting ``the course of'' after ``during''; and by
inserting ``of conviction, and (B) the obstructive conduct related to
(i) the defendant's offense of conviction and any relevant conduct; or
(ii) a closely related offense'' after ``instant offense''.
The Commentary to Sec. 3C1.1 captioned ``Application Notes'' is
amended in Note 2 in the second sentence by striking ``Note 3'' and
inserting ``Note 4''; in the third sentence by striking ``Note 4'' and
inserting ``Note 5''; and in the fourth sentence by striking ``Notes 3
and 4'' and inserting ``Notes 4 and 5''.
The Commentary to Sec. 3C1.1 captioned ``Application Notes'' is
amended in Note 4 in the first paragraph by striking ``Note 7'' and
inserting ``Note 8''.
The Commentary to Sec. 3C1.1 captioned ``Application Notes'' is
amended by redesignating Notes 1 through 8, as Notes 2 through 9,
respectively; and by inserting the following as new Note 1:
``1. This adjustment applies if the defendant's obstructive conduct
(A) occurred during the course of the investigation, prosecution, or
sentencing of the defendant's instant offense of conviction, and (B)
related to (i) the defendant's offense of conviction and any relevant
conduct; or (ii) an otherwise closely related case, such as that of a
co-defendant.''.
Reason for Amendment: The purpose of this amendment is to clarify
what the term instant offense means in the obstruction of justice
guideline, Sec. 3C1.1. This amendment resolves a circuit conflict on
the issue of whether the adjustment applies to obstructions that occur
in cases closely related to the defendant's case or only those
specifically related to the offense of which the defendant convicted.
Compare United States v. Powell, 113
[[Page 28207]]
F.3d 464 (3d Cir.) (adjustment applies if defendant attempts to impede
the prosecution of a co-defendant who is charged with the same offense
for which defendant was convicted), cert. denied, 118 S. Ct. 454
(1997), United States v. Walker, 119 F.3d 403 (6th Cir.) (same), cert.
denied, 118 S. Ct. 643 (1997), United States v. Acuna, 9 F.3d 1442 (9th
Cir. 1993) (adjustment applies if defendant attempts to obstruct
justice in a case closely related to his own), and United States v.
Bernaugh, 969 F.2d 858 (10th Cir. 1992) (adjustment applies when
defendant testifies falsely at his own hearing about co-defendants'
roles in the offense), with United States v. Perdomo, 927 F.2d 111 (2d
Cir. 1991) (cannot apply adjustment based on obstructive conduct
outside the scope of charged offense), and United States v. Partee, 31
F.3d 529 (7th Cir. 1994) (same). The amendment, which adopts the
majority view, instructs that the obstruction must relate either to the
defendant's offense of conviction (including any relevant conduct) or
to a closely related case. The amendment also clarifies the temporal
element of the obstruction guideline (i.e., that the obstructive
conduct must occur during the investigation, prosecution, or sentencing
of the defendant's offense of conviction).
7. Amendment: The Commentary to Sec. 3C1.1 captioned ``Application
Notes'' is amended in Note 4 in the first sentence of the first
paragraph by striking ``enhancement'' and inserting ``adjustment''; and
by inserting ``or affect the determination of whether other guideline
adjustments apply (e.g., Sec. 3E1.1 (Acceptance of Responsibility))''
after ``guideline range''; in the second sentence by striking
``enhancement'' and inserting ``adjustment''; in subdivision (d) by
striking the period at the end and inserting a semicolon; and by adding
at the end the following new subdivision:
``(e) lying to a probation or pretrial services officer about
defendant's drug use while on pre-trial release, although such conduct
may be a factor in determining whether to reduce the defendant's
sentence under Sec. 3E1.1 (Acceptance of Responsibility).''.
Reason for Amendment: The purpose of this amendment is to establish
that lying to a probation officer about drug use while released on bail
does not warrant an obstruction of justice adjustment under Sec. 3C1.1.
This amendment resolves a circuit conflict on that issue. Compare
United States v. Belletiere, 971 F.2d 961 (3d Cir. 1992) (lying about
drug use is not obstructive conduct that impedes government's
investigation of instant offense), and United States v. Thompson, 944
F.2d 1331 (7th Cir. 1991) (same), cert. denied, 502 U.S. 1097 (1992),
with United States v. Garcia, 20 F.3d 670 (6th Cir. 1994) (falsely
denying drug use, while not outcome-determinative, is relevant), cert.
denied, 513 U.S. 1159 (1995). The amendment, which adopts the majority
view, excludes from application of Sec. 3C1.1 a defendant's denial of
drug use while on pre-trial release, although the amendment provides
that such conduct may be relevant in determining the application of
other guidelines, such as Sec. 3E1.1 (Acceptance of Responsibility).
8. Amendment: Section 5K2.13 is amended by striking the text in its
entirety and inserting:
``A sentence below the applicable guideline range may be warranted
if the defendant committed the offense while suffering from a
significantly reduced mental capacity. However, the court may not
depart below the applicable guideline range if (1) the significantly
reduced mental capacity was caused by the voluntary use of drugs or
other intoxicants; (2) the facts and circumstances of the defendant's
offense indicate a need to protect the public because the offense
involved actual violence or a serious threat of violence; or (3) the
defendant's criminal history indicates a need to incarcerate the
defendant to protect the public. If a departure is warranted, the
extent of the departure should reflect the extent to which the reduced
mental capacity contributed to the commission of the offense.
Commentary
Application Note:
1. For purposes of this policy statement--
Significantly reduced mental capacity means the defendant, although
convicted, has a significantly impaired ability to (A) understand the
wrongfulness of the behavior comprising the offense or to exercise the
power of reason; or (B) control behavior that the defendant knows is
wrongful.''.
Reason for Amendment: The purpose of this amendment is to allow
(except under certain circumstances) a diminished capacity departure if
there is sufficient evidence that the defendant committed the offense
while suffering from a significantly reduced mental capacity. This
amendment addresses a circuit conflict regarding whether the diminished
capacity departure is precluded if the defendant committed a ``crime of
violence'' as that term is defined in the career offender guideline.
Compare United States v. Poff, 926 F.2d 588 (7th Cir.) (en banc)
(definition of ``non-violent offense'' necessarily excludes a crime of
violence), cert. denied, 502 U.S. 827 (1991), United States v.
Maddalena, 893 F.2d 815 (6th Cir. 1989) (same), United States v.
Mayotte, 76 F.3d 887 (8th Cir. 1996) (same), United States v. Borrayo,
898 F.2d 91 (9th Cir. 1989) (same), and United States v. Dailey, 24
F.3d 1323 (11th Cir. 1994) (same), with United States v. Chatman, 986
F.2d 1446 (D.C. Cir. 1993) (court must consider all the facts and
circumstances to determine whether offense was non-violent; terms are
not mutually exclusive), United States v. Weddle, 30 F.3d 532 (4th Cir.
1994) (same), and United States v. Askari, F.3d, 1998 WL 164561 (3d
Cir. 1998) (en banc) (``non-violent offenses'' are those that do not
involve a reasonable perception that force against persons may be used
in committing the offense), abrogating United States v. Rosen, 896 F.2d
789 (3d Cir. 1990) (non-violent offense means the opposite of crime of
violence). The amendment replaces the current policy statement with a
new provision that essentially represents a compromise approach to the
circuit conflict. The new policy statement allows a diminished capacity
departure if there is sufficient evidence that the defendant committed
the offense while suffering from a significantly reduced mental
capacity, except under the following three circumstances: (1) the
significantly reduced mental capacity was caused by the voluntary use
of drugs or other intoxicants; (2) the facts and circumstances of the
defendant's offense indicate a need to protect the public because the
offense involved actual violence or a serious threat of violence; or
(3) the defendant's criminal history indicates a need to incarcerate
the defendant to protect the public. The amendment also adds an
application note that defines ``significantly reduced mental capacity''
in accord with the decision in United States v. McBroom, 124 F.3d 533
(3d Cir. 1997). The McBroom court concluded that ``significantly
reduced mental capacity'' included both cognitive impairments (i.e., an
inability to understand the wrongfulness of the conduct or to exercise
the power of reason) and volitional impairments (i.e., an inability to
control behavior that the person knows is wrongful). The application
note specifically includes both types of impairments in the definition
of ``significantly reduced mental capacity''.
9. Amendment: Section 5B1.3(d) is amended by adding at the end the
following new subdivision:
``(6) Deportation
If (A) the defendant and the United States entered into a
stipulation of
[[Page 28208]]
deportation pursuant to section 238(c)(5) of the Immigration and
Nationality Act (8 U.S.C. Sec. 1228(c)(5)); or (B) in the absence of a
stipulation of deportation, if, after notice and hearing pursuant to
such section, the Attorney General demonstrates by clear and convincing
evidence that the alien is deportable--a condition ordering deportation
by a United States district court or a United States magistrate
judge.''.
Section 5D1.3(d) is amended by adding at the end the following new
subdivision:
``(6) Deportation
If (A) the defendant and the United States entered into a
stipulation of deportation pursuant to section 238(c)(5) of the
Immigration and Nationality Act (8 U.S.C. Sec. 1228(c)(5)); or (B) in
the absence of a stipulation of deportation, if, after notice and
hearing pursuant to such section, the Attorney General demonstrates by
clear and convincing evidence that the alien is deportable--a condition
ordering deportation by a United States district court or a United
States magistrate judge.''.
Section 5D1.3(e)(5) is amended by striking ``to provide just
punishment for the offense,''.
Section 5B1.3(c) is amended by inserting ``(Policy Statement)''
before ``The following''.
Section 5B1.3(d) is amended by inserting ``(Policy Statement)''
before ``The following''.
Section 5B1.3(e) is amended in the title by adding ``(Policy
Statement)'' at the end.
Section 5D1.3(c) is amended by inserting ``(Policy Statement)''
before ``The following''.
Section 5D1.3(d) is amended by inserting ``(Policy Statement)''
before ``The following''.
Section 5D1.3(e) is amended in the title by adding ``(Policy
Statement)'' at the end.
Reason for Amendment: The purpose of this amendment is to make
several technical and conforming changes to the guidelines relating to
conditions of probation and supervised release. The amendment has three
parts. First, the amendment adds to Sec. 5B1.3 a condition of probation
regarding deportation, in response to section 374 of the Illegal
Immigration Reform and Immigrant Responsibility Act of 1996, Pub. L
104-208, 110 Stat. 3009 (1996). That section amended 18 U.S.C.
Sec. 3563(b) to add a new discretionary condition of probation with
respect to deportation. Second, this amendment deletes the reference in
the supervised release guideline to ``just punishment'' as a reason for
the imposition of curfew as a condition of supervised release. The need
to provide ``just punishment'' is not included in 18 U.S.C.
Sec. 3583(c) as a permissible factor to be considered in imposing a
term of supervised release. Third, this amendment amends the guidelines
pertaining to conditions of probation and supervised release to
indicate that discretionary (as opposed to mandatory) conditions are
advisory policy statements of the Commission, not binding guidelines.
10. Amendment: Section 5K2.0 is amended in the first paragraph in
the first sentence by inserting a comma after ``3553(b)''; by striking
``guideline'' and inserting ``guidelines''; in the second sentence by
striking ``guidelines'' and inserting ``guideline range''; in the third
sentence by striking ``controlling'' after ``The''; by striking ``can
only be made by the courts'' and inserting ``rests with the sentencing
court on a case-specific basis''; in the last sentence by inserting
``determining'' after ``consideration in''; by striking ``guidelines''
and inserting ``guideline range''; by striking ``guideline level'' and
inserting ``weight''; by inserting ``under the guidelines'' after
``factor''; and by inserting before the period at the end ``or
excessive''.
Section 5K2.0 is amended in the last paragraph by striking ``An''
and inserting ``Finally, an''; by striking ``not ordinarily relevant''
and inserting ``, in the Commission's view, `not ordinarily relevant'
''; and by striking ``in a way that is important to the statutory
purposes of sentencing''.
The Commentary to Sec. 5K2.0 is amended by inserting before the
first paragraph the following:
``The United States Supreme Court has determined that, in reviewing
a district court's decision to depart from the guidelines, appellate
courts are to apply an abuse of discretion standard, because the
decision to depart embodies the traditional exercise of discretion by
the sentencing court. Koon v. United States, 116 S. Ct. 2035 (1996).
Furthermore, `[b]efore a departure is permitted, certain aspects of the
case must be found unusual enough for it to fall outside the heartland
of cases in the Guideline. To resolve this question, the district court
must make a refined assessment of the many facts bearing on the
outcome, informed by its vantage point and day-to-day experience in
criminal sentencing. Whether a given factor is present to a degree not
adequately considered by the Commission, or whether a discouraged
factor nonetheless justifies departure because it is present in some
unusual or exceptional way, are matters determined in large part by
comparison with the facts of other Guidelines cases. District Courts
have an institutional advantage over appellate courts in making these
sorts of determinations, especially as they see so many more Guidelines
cases than appellate courts do.' Id. at 2046-47.''.
Reason for Amendment: The purpose of this amendment is to reference
specifically in the general departure policy statement the United
States Supreme Court's decision in United States v. Koon, 116 S. Ct.
2035 (1996). This amendment (1) incorporates the principal holding and
key analytical points from the Koon decision into the general departure
policy statement, Sec. 5K2.0; (2) deletes language inconsistent with
the holding of Koon; and (3) makes minor, non-substantive changes that
improve the precision of the language of Sec. 5K2.0.
11. Amendment: Section 2B3.2(b) is amended in subdivision (2) by
striking ``(b)(6)'' and inserting ``(b)(7)''.
The Commentary to Sec. 2K2.1 captioned ``Application Notes'' is
amended in Note 5 in the first sentence by striking ``subsections (1)
and (2)'' and inserting ``subsections (a)(1), (a)(2), and (b)''.
The Commentary to Sec. 6A1.3 is amended in the third paragraph by
striking ``117 U.S.'' after ``Watts,'' both places it appears and
inserting ``117 S. Ct.''.
Reason for Amendment: This amendment corrects technical errors in
Secs. 2B3.1, 2K2.1, and 6A1.3.
Part II--Proposed Amendment in Response to the No Electronic Theft
Act of 1997
Synopsis of Proposed Amendment: In section 2(g) of the No
Electronic Theft Act of 1997, Pub. L. 105B147, Congress directed the
Commission to (1) ``ensure that the applicable guideline range for a
defendant convicted of a crime against intellectual property (including
offenses set forth at section 506(a) of title 17, United States Code,
and sections 2319, 2319A, and 2329 of title 18, United States Code) is
sufficiently stringent to deter such a crime and to adequately reflect
the additional considerations set forth in paragraph (2)''; and (2)
``ensure that the guidelines provide for consideration of the retail
value and quantity of the items with respect to which the crime against
intellectual property was committed.''
Three possible approaches for implementing these directives are set
forth below. Option One is the result of the Commission's review and
consideration of the directives, after taking into account pertinent
hearing testimony, written public comment, and
[[Page 28209]]
other input of interested parties. Upon the Commission's request for
input from the Department of Justice, the Department proposed Options
Two and Three as possible approaches for carrying out the statutory
directives. The Commission invites comment on each of these three
proposals, as well as any other comment on how the congressional
directives might best be implemented. Additionally, the Commission
invites comment on whether the Commission can and should promulgate any
of these proposed amendments (or any other amendments to the
guidelines, policy statements, and official commentary to carry out
these directives) pursuant to the emergency amendment authority of
section 21 of the Sentencing Act of 1987.
Note: Persons commenting on this issue may wish to consider
whether the authority of the Commission to adopt emergency
amendments to the guidelines in order to implement the directives is
sufficiently clear inasmuch as the authority to act on an emergency
basis under section 21 of the Sentencing Act of 1987, which was
cited in section 2(g) of the No Electronic Theft Act of 1997, has
expired and may not have been revived adequately by that section.
Proposed Amendment:
Option One [Commission Proposal]:
Strike Sec. 2B5.3 and insert the following:
Sec. 2B5.3. Criminal Infringement of Copyright or Trademark
(a) Base Offense Level: 6
(b) Specific Offense Characteristics
(1) If (A) the offense involved (i) the infringement of a copyright
other than a copyright violation under 18 U.S.C. 2319A, (ii) the
infringement of both a copyright and a trademark, or (iii) palmed-off
counterfeit goods; and (B) the infringed value exceeded $2,000,
increase by the number of levels from the monetary table in Sec. 2F1.1
(Fraud and Deceit) corresponding to that value.
(2) If (A) subsection (b)(1) does not apply; and (B) the infringing
value exceeded $2,000, increase by the number of levels from the
monetary table in Sec. 2F1.1 corresponding to that value.
[(3) If the offense involved online electronic infringement,
increase by 2 levels.]
[(4) If the offense was not committed for commercial advantage or
private financial gain, decrease by [2] levels, but not below level 6.]
[(5) If the offense involved the conscious or reckless risk of
serious bodily injury or death, increase by [2] levels. If the
resulting offense level is less than level [13][14], increase to level
[13][14]].
Commentary
Application Notes:
1. For purposes of this guideline--
Infringed value means the average retail value of the infringed-
upon item multiplied by the number of infringing items. Infringed-upon
item means the legitimate item with respect to which or against which
the crime against intellectual property was committed. Average retail
value of the infringed-upon item generally means the average price that
a well-informed consumer typically would pay for the legitimate item
(which may be less than the Manufacturer's Suggested Retail Price). In
cases involving the interception of a communication in violation of 18
U.S.C. Sec. 2511, the average retail value of the infringed-upon item
means the price the user would have paid if that communication had been
obtained lawfully.
Infringing value means the average retail value of the infringing
item multiplied by the number of infringing items.
Infringing item means the item that violates the copyright or
trademark laws.
Palmed-off counterfeit goods means counterfeit goods that a
consumer reasonably would believe are the legitimate items, because of
price comparability and apparent substitutability.
Online electronic infringement includes the unlawful producing,
reproducing, distributing, selling, performing, or trafficking in
copyrighted or trademarked articles or services via an electronic
bulletin board, a worldwide web site, or any online facility.
Commercial advantage or private financial gain includes receipt, or
expectation of receipt, of anything of value, including the receipt of
other protected works.
2. The enhancement in subsection (b)(2) applies to any infringement
case not covered by subsection (b)(1) and in which the infringing value
exceeded $2,000. The types of cases to which subsection (b)(2) is
intended to apply include, for example, most cases involving trademark
infringement, as well as cases involving the unlawful recording of a
musical performance in violation of 18 U.S.C. Sec. 2319A.
3. There may be cases in which the offense level substantially
understates or overstates the seriousness of the offense or the
culpability of the defendant. In such cases, an upward or downward
departure, as appropriate, may be warranted.
Background: This guideline treats copyright and trademark
violations much like fraud. The enhancements in subsections (b)(1) and
(2) are intended as an approximate determination of the aggregate
pecuniary harm resulting from trafficking in goods or services that
violate the copyright or trademark laws.
The Electronic Communications Privacy Act of 1986 prohibits the
interception of satellite transmission for purposes of direct or
indirect commercial advantage or private financial gain. Such
violations are similar to copyright offenses and are therefore covered
by this guideline.''.
Option Two [Department of Justice Proposal]:
Strike Sec. 2B5.3 and insert the following:
``Sec. 2B5.3. Criminal Infringement of Copyright or Trademark
(a) Base Offense Level: 6
(b) Specific Offense Characteristics
(1) If the economic harm exceeded $2,000, increase by the
corresponding number of levels from the table in Sec. 2F 1.1 (Fraud and
Deceit).
(2) If the offense involved online electronic infringement,
increase by 2 levels.
(3) If the offense posed a threat to public health and safety,
increase by 2 levels.
Commentary
Statutory Provisions: 17 U.S.C. Sec. 506(a); 18 U.S.C. 2318, 2319,
2319A, 2320, 2511. For additional statutory provision(s), see Appendix
A (Statutory Index).
Application Notes:
1. For purposes of this guideline--
Infringed upon items means the items (including phonorecords and
computer programs) with respect to which or against which the crime
against intellectual property was committed.
Infringing items means the items that violate the copyright or
trademark laws; often, infringing trademarks, and the items bearing
them, are referred to as counterfeit and items that infringe copyrights
are referred to as pirated.
Retail value means the Manufacturer's Suggested Retail Price
(MSRP).
Copies means both copies and phonorecords.
Trafficked in includes transported, transferred, distributed, sold
or otherwise disposed of.
2. Economic harm in 2318, 2319 (506(a)), and 2320 cases is the
retail value of the infringed upon items, multiplied by the number of
copies produced and trafficked in. This recognizes that infringement
causes losses not only for the trademark and copyright owners, but for
others in the distribution chains of legitimate articles, and for
members of the public who are
[[Page 28210]]
deceived into buying what they may believe are legitimate articles.
A single copy that is produced and then sold by a single defendant
counts as one copy.
3. Economic harm in 2319A cases is the retail value of the
infringing items, multiplied by the number of copies produced
(including the number of primary unlawful fixations, i.e., `masters,'
from which those copies are made) and/or transmissions and/or the
number of copies sold, offered for sale, distributed, offered for
distribution, rented, offered for rent, and trafficked in. The value of
infringing items is the standard in these cases because merchandise
that violates Sec. 2319A has no legitimate counterpart. A single copy
that is produced and then sold by a single defendant counts as one
copy.
4. Online electronic infringement includes the producing,
reproducing, distributing, selling, performing, or trafficking in
copyrighted or trademarked articles or services via an electronic
bulletin board, a worldwide web site, or any online facility. The ease
with which infringers can operate in the online environment and the
access they have to limitless numbers of customers gives them the
capability of causing substantial harm. For example, a defendant may
post copyrighted material to an electronic bulletin board, making it
accessible for others to illegally obtain, copy, and further
distribute. In such an instance, it may not be possible to determine
precisely the number of items (copies) downloaded by persons who access
the facility, but it is reasonable to assure, based on the worldwide
possibility for distribution and the number of items offered at the
facility, that the harm is substantial.
5. In many instances, items that violate the trademark and
copyright laws also present public health and safety hazards. These
hazards can appear in many contexts. For example, counterfeit products,
such as automotive parts, airplane parts, foodstuffs, pharmaceuticals,
and electrical devices, place members of the public in danger. The
enhancement shall apply in cases in which the products, if used in
their intended manner, would threaten public health and safety.
6. An upward departure may be warranted in cases in which the
economic harm underrepresents the actual harm or would lead to an
unfair result. This Application Note applies in infringement
situations, other than those referred to in Application Note 4, in
which the number of copies produced and trafficked in is impossible to
calculate and the harm to the copyright or trademark owner, others in
the legitimate distribution chains, and the public is substantial. For
example, rather than operate as an individual, a defendant may be part
of a distribution or manufacturing network in which he or she supplies
other distributors with unlawful products or parts of products, such as
counterfeit handbags or watches or their parts or pirated sound
recordings or motion pictures. In such an instance, it may not be
possible to determine precisely the number of items (copies) provided
to other persons for distribution, but it is reasonable, based on the
available facts (including the number of persons in the distribution
network), that the number is large enough to create substantial harm.
The upward departure provided for in this Application Note is available
regardless of whether the conduct was for financial gain.
7. A downward departure may be warranted in cases in which the
retail price of the infringing items is less than 30% of the retail
value of the infringed upon item. In such cases, it may not be
reasonable to conclude that each sale of an infringing item represents
a lost sale for the copyright or trademark owner or others in the
distribution chain. For example, a counterfeit watch may retail for
$15, while the infringed upon watch may retail for $5,000. A sentencing
calculation based on the retail value of the infringed items may lead
to an unfair result.
Background: This guideline treats copyright and trademark
violations much like fraud.
The Electronic Communications Privacy Act of 1986 prohibits the
interception of satellite transmission for purposes of direct or
indirect commercial advantage or private financial gain. Such
violations are similar to copyright offenses and are, therefore,
covered by this guideline.''.
Option Three [Department of Justice Proposal]:
Strike Sec. 2B5.3 and insert the following:
Sec. 2B5.3. Criminal Infringement of Copyright or Trademark
(a) Base Offense Level: 6
(b) Specific Offense Characteristics
(1) If the economic harm exceeded $2,000, increase by the
corresponding number of levels from the table in Sec. 2F1.1 (Fraud and
Deceit).
(2) If the offense involved online electronic infringement,
increase by 2 levels.
(3) If the retail price of the infringing items is less than 50% of
the manufacturer's suggested retail price of the infringed upon items,
decrease by 2 levels; if the retail price of the infringing items is
less than 30% of the manufacturer's suggested retail price of the
infringed upon items, decrease by 4 levels.
Commentary
Statutory Provisions: 17 U.S.C. Sec. 506(a), 18 U. S. C. 2318,
2319, 2319A, 2320, 2511. For additional statutory provision(s), see
Appendix A (Statutory Index).
Application Notes:
1. For purposes of this guideline
Infringed upon items means the legitimate items (including
phonorecords and computer programs) with respect to which or against
which the crime against intellectual property was committed.
Infringing items means the items that violate the copyright or
trademark laws; often, infringing trademarks, and the items bearing
them, are referred to as counterfeit and items that infringe copyrights
are referred to as pirated.
Copies means both copies and phonorecords.
2. Economic harm in section 2318, 2319 (506(a)), and 2320 cases is
the manufacturer's suggested retail price (msrp) of the infringed upon
items, multiplied by the number of copies involved in the offense. This
recognizes that the economic harm caused by infringement affects not
only the trademark and copyright owners, but also others in the
distribution chains of legitimate articles, and members of the public
who are deceived into buying what they may believe are legitimate
articles.
Because there is no infringed upon item in section 2319A cases,
`economic harm' in those cases is the retail price of the infringing
items, multiplied by the number of copies involved in the offense
(including the number of primary unlawful recordings, i.e., `masters,'
from which those copies are made).
Economic harm in section 2511 caves is the price the user or users
would have paid if the service had been obtained lawfully.
3. Online electronic infringement includes the producing,
reproducing, distributing, selling, performing, or trafficking in
copyrighted or trademarked articles or services via an electronic
bulletin board, a worldwide web site, or any online facility. The ease
with which infringers can operate in the online environment and the
access they have to limitless numbers of customers gives them the
capability of causing substantial harm.
4. An upward departure may he warranted in cases in which the
unlawful conduct presents a reasonably
[[Page 28211]]
foreseeable risk to public health or safety. These hazards appear in
many contexts. For example, counterfeit products, such as automotive
parts, airplane parts, foodstuffs, pharmaceuticals, and electrical
devices, place members of the public in danger.
5. An upward departure may be warranted in cases in which the
standard calculation of economic harm under-represents the actual harm
or would lead to an unfair result. This Application Note applies in
infringement situations, other than those referred to in Application
Note 3, in which the number of copies involved in the offense is
impossible to calculate and the harm to the copyright or trademark
owner, others in the legitimate distribution chain, and the public is
substantial. For example, rather that operate as an individual, a
defendant may be part of a distribution or manufacturing network in
which he or she supplies other distributors with unlawful products or
parts of products, such as counterfeit handbags or watches or their
parts or pirated sound recordings or motion pictures or their
packaging, In such cases, it may not be possible to determine precisely
the number of items (copies) provided to other persons for
distribution, but it is reasonable, based on the available facts
(including the number of persons in the distribution network), that the
number is large enough to create substantial harm. The upward departure
provided for in this Application Note is available regardless of
whether the conduct was for commercial advantage or financial gain.
Background: This guideline treats copyright and trademark
violations much like fraud.
The Electronic Communications Privacy Act of 1986 prohibits the
interception of satellite transmission for purposes of direct or
indirect commercial advantage or private financial gain. Such
violations are similar to copyright offenses and are, therefore,
covered by this guideline.''.
[FR Doc. 98-13584 Filed 5-20-98; 8:45 am]
BILLING CODE 2210-40-P
