7962 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

SENTENCING COMMISSION

Sentencing Guidelines for United

States Courts

AGENCY: United States Sentencing

Commission.

ACTION: Notice of (A) proposed

temporary, emergency amendments to

sentencing guidelines, policy

statements, and commentary; (B)

proposed permanent, non-emergency

amendments to sentencing guidelines,

policy statements, and commentary.

Request for public comment. Notice of

public hearing.

SUMMARY: Pursuant to section 994(a),

(o), and (p) of title 28, United States

Code, and section 3664 of Pub. L. 106–

310 (with respect to proposed

emergency amendment #1), section

3611 of Pub. L. 106–310 (with respect to

proposed emergency amendment #2),

section 3651 of Pub. L. 106–310 (with

respect to proposed emergency

amendment #3), and section 112(b) of

Pub. L. 106–386 (with respect to

proposed emergency amendment #4) the

Commission is considering

promulgating certain amendments to the

sentencing guidelines, policy

statements, and commentary. This

notice sets forth the proposed

amendments and, for each proposed

amendment, a synopsis of the issues

addressed by that amendment.

DATES: Written public comment on the

proposed emergency amendments in

part (A) should be received by the

Commission not later than February 5,

2001. Written public comment on the

proposed permanent, non-emergency

amendments in part (B), and on the

proposed amendments in part (A) for

purposes of promulgating those

amendments as permanent, nonemergency amendments, should be

received by the Commission not later

than March 26, 2001. The Commission

requests that, to the extent practicable,

commentators submit written public

comment on the proposed permanent,

non-emergency amendments not later

than March 9, 2001, in order for the

Commission to consider that comment

before its public hearing scheduled for

the March 19–20, 2001 session. Note

that the Commission may, at its

February 2001 public meeting, revise

the deadline for submission of written

public comment to provide for an earlier

deadline than the deadline published in

this notice. See USSC Rules of Practice

and Procedure, Rule 1.2.

The Commission plans to hold a

public hearing on the proposed

permanent, non-emergency

amendments during its March 2001

session in Washington, DC. The public

hearing will be held at the Thurgood

Marshall Federal Judiciary Building,

One Columbus Circle, NE., Washington,

DC 20002–8002. A person who desires

to testify at the public hearing should

notify Michael Courlander, Public

Affairs Officer, at (202) 502–4590, not

later than March 9, 2001. Written

testimony for the public hearing must be

received by the Commission not later

than March 9, 2001. Timely submission

of written testimony is a requirement for

testifying at the public hearing. The

Commission requests that, to the extent

practicable, commentators submit an

electronic version of the comment and

of the testimony for the public hearing.

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) 502–4590.

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). This year, the Commission may

submit non-emergency amendments to

the Congress not later than May 1, 2001.

The Commission seeks comment on

the proposed amendments, alternative

proposed amendments, issues for

comment, and any other aspect of the

sentencing guidelines, policy

statements, and commentary.

The Commission also requests public

comment regarding whether the

Commission should specify for

retroactive application to previously

sentenced defendants any of the

proposed, permanent, non-emergency

amendments published in this notice

and in the Federal Register notice of

November 7, 2000 (see 65 FR 66792).

The Commission requests comment

regarding which, if any, of the proposed

non-emergency amendments that may

result in a lower guideline range should

be made retroactive to previously

sentenced defendants pursuant to

§ 1B1.10 (Reduction in Term of

Imprisonment as a Result of Amended

Guideline Range).

The proposed amendments are

presented in this notice in one of two

formats. First, some of the amendments

are proposed as specific revisions to a

guideline or commentary. Bracketed text

within a proposed amendment indicates

a heightened interest on the

Commission’s part for comment and

suggestions for alternative policy

choices; for example, a proposed

enhancement of [2] levels indicates that

the Commission is considering, and

invites comment on, alternative policy

choices regarding the appropriate level

of enhancement. Similarly, bracketed

text within a specific offense

characteristic or application note means

that the Commission specifically invites

comment on whether the proposed

provision is appropriate. Second, the

Commission has highlighted certain

issues for comment and invites

suggestions for how the Commission

should respond to those issues.

Reports and other additional

information pertaining to the proposed

amendments described in this notice

may be accessed through the

Commission’s website at www.ussc.gov.

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

section 112(b) of Pub. L. 106–386; and

sections 3611, 3651, and 3664 of Pub. L. 106–

310; USSC Rules of Practice and Procedure,

Rules 4.3, 4.4.

Diana E. Murphy,

Chair.

Proposed Amendments to the

Sentencing Guidelines

Part (A): Proposed Temporary,

Emergency Amendments and Intent To

Make Permanent Each of the Proposed

Temporary, Emergency Amendments

The Commission hereby gives notice

of, and requests comment on, its intent

to promulgate each of the proposed

amendments set forth in this Part as a

temporary, emergency amendment and

after promulgation as an emergency

amendment, to promulgate each such

amendment as a permanent, nonemergency amendment.

Proposed Amendment: Ecstasy

1. Synopsis of Proposed Amendment:

This proposed amendment addresses

the directive in the Ecstasy AntiProliferation Act of 2000 (the ‘‘Act’’),

section 3664 of Pub. L. 106–310, which

instructs the Commission to provide,

under emergency amendment authority,

increased penalties for the manufacture,

importation, exportation, or trafficking

of Ecstasy. The directive specifically

requires the Commission to increase the

base offense level for 3,4-

methylenedioxy methamphetamine

(MDMA), 3,4-methylenedioxy

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7963

amphetamine (MDA), 3,4-

methylenedioxy-N-ethylamphetamine

(MDEA), paramethoxymethamphetamine (PMA), and any

other controlled substance that is

marketed as Ecstasy and that has either

a chemical structure similar to MDMA

or an effect on the central nervous

system substantially similar to or greater

than MDMA.

The proposed amendment addresses

the directive by amending the Drug

Equivalency Table in § 2D1.1,

Application Note 10, to increase the

marihuana equivalencies for the

specified controlled substances. The

increased equivalencies make the

penalties for these substances

comparable to other drugs of abuse. The

increases also satisfy the sense of

Congress in the Act that the penalties

for these substances, particularly for

high-level traffickers, are too low.

An issue for comment regarding

whether the Commission should base

the penalties of Ecstasy on the penalties

for other drugs of abuse, such as powder

cocaine, methamphetamine mixture, or

mescaline follows the proposed

amendment.

Proposed Amendment

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 10 in the Drug Equivalency Tables

in the subdivision captioned ‘‘LSD, PCP,

and Other Schedule I and II

Hallucinogens (and their immediate

precursors)*’’ in the line referenced to

‘‘MDA’’ by striking ‘‘50 gm’’ and

inserting ‘‘1 kg’’; in the line referenced

to ‘‘MDMA’’ by striking ‘‘35 gm’’ and

inserting ‘‘1 kg’’; in the line referenced

‘‘MDEA’’ by striking ‘‘30 gm’’ and

inserting ‘‘1 kg’’; and by inserting ‘‘1 gm

of Paramethoxymethamphetamine/PMA

= 1 kg of marihuana’’ after the line

referenced to ‘‘MDEA’’.

Issue for Comment: It has been

represented to the Commission that

Ecstasy (i.e., MDMA, MDEA, MDA and

PMA) is similar in its hallucinogenic

effect on the user to mescaline, and also

has been described as having an added

stimulant component that can elevate

heart rate, blood pressure, and body

temperature. It has also been suggested

that the drug is neither physically nor

psychologically addictive. The

Commission invites comment on these

representations and on the appropriate

penalty structure for Ecstasy. The

proposed amendment treats Ecstasy as

being of comparable seriousness to

heroin, providing a marihuana

equivalency for Ecstasy that is the same

as heroin. Accordingly, for sentencing

purposes, 1 gm of Ecstasy will be the

equivalent of 1 kg of marihuana. Should

the Commission alternatively treat

Ecstasy comparably to some other major

drug of abuse? For example, should the

Commission treat Ecstasy as being of

comparable seriousness to powder

cocaine (which would result in a

marihuana equivalency for Ecstasy of

200 gm) or methamphetamine mixture

(which would result in a marihuana

equivalency for Ecstasy of 2 kg)? Or

should the penalty be comparable to

that for mescaline (which would result

in a marihuana equivalency for Ecstasy

of 10 gm) or some multiple of the

penalty for mescaline? Comment also is

requested regarding whether the Drug

Quantity Table in § 2D1.1 should be

revised with respect to Ecstacy to

provide additional incremental

penalties (perhaps with exponential

quantity increases) so as to punish more

severely those offenders who traffic in

larger quantities.

Proposed Amendment: Amphetamine

2. Synopsis of Proposed Amendment:

This proposed amendment implements

the directive in the Methamphetamine

Anti-Proliferation Act of 2000, section

3611 of Pub. L. 106–310 (the ‘‘Act’’),

which directs the Commission to

provide, under emergency amendment

authority, increased guideline penalties

for amphetamine such that those

penalties are comparable to the base

offense level for methamphetamine.

There are no mandatory minimum

sentences for amphetamine offenses.

Currently, a quantity of amphetamine is

sentenced at the same level as an equal

quantity of powder cocaine. That is,

with no or minimal criminal history, an

offender convicted of trafficking 500

grams of amphetamine would receive a

guideline range of 63 to 78 months,

based solely on the weight of the drug.

A weight of 5,000 grams (5 kilograms),

and the lowest criminal history

category, would result in a sentencing

range of 121 to 151 months. The

mathematical relationships between the

weight of amphetamine and the current

five- and ten-year quantity thresholds

for methamphetamine-mix and

methamphetamine-actual are 10-to-1

and 100-to-1, respectively.

The proposed amendment provides

two options for implementing the

directive. Both options propose to treat

amphetamine and methamphetamine

identically, at a 1:1 ratio (i.e., the same

quantities of amphetamine and

methamphetamine would result in the

same base offense level) because of the

similarities of the two substances.

Specifically, amphetamine and

methamphetamine (A) chemically are

similar; (B) are produced by a similar

method, and are trafficked in a similar

manner; (C) share similar methods of

use; (D) affect the same parts of the

brain; and (E) have similar intoxicating

effects. Both options also distinguish

between pure amphetamine (i.e.,

amphetamine (actual)) and

amphetamine mixture in the same

manner, and at the same quantities, as

pure methamphetamine (i.e.,

methamphetamine (actual) and

methamphetamine mixture).

Although both options ultimately

achieve the same penalty increase, the

proposed options differ in how they

implement the directive. Option One

amends the Drug Equivalency Table of

§ 2D1.1 (Unlawful Manufacturing,

Importing, Exporting, or Trafficking

(Including Possession with Intent to

Commit These Offenses); Attempt or

Conspiracy). To determine the offense

level under this option, the quantity of

amphetamine (actual or mixture) is

converted to its marijuana weight

equivalency using the Drug Equivalency

Tables. Option Two, on the other hand,

amends § 2D1.1 specifically to include

amphetamine in the Drug Quantity

Table.

Included in both options is a

reference to the controlled substance

dextroamphetamine, which is a

substance quite similar to amphetamine.

Currently, dextroamphetamine has the

same marihuana equivalency as

amphetamine mixture. The proposed

amendment (A) distinguishes between

dextroamphetamine mixture and

dextroamphetamine (actual); and (B)

provides penalties for the

dextroamphetamine mixture and

dextroamphetamine (actual) that are the

same as amphetamine mixture and

amphetamine (actual), respectively.

Two issues for comment follows the

proposed amendment. The first requests

comment regarding whether the

Commission should provide an

alternative quantity ratio between

amphetamine and methamphetamine.

The second requests comment regarding

whether § 2D1.1(b)(4) should be

amended to include amphetamine and

dextroamphetamine.

Proposed Amendment

Option 1

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 10 in the Drug Equivalency Tables

in the subdivision captioned ‘‘Cocaine

and Other Schedule I and II Stimulants

(and their immediate precursors)*’’ by

striking ‘‘200 gm’’ after ‘‘1 gm of

Amphetamine =’’ and inserting ‘‘2 kg’’;

7964 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

by inserting ‘‘1 gm of Amphetamine

(Actual) = 20 kg of marihuana’’ after the

line referenced to ‘‘Amphetamine’’; by

striking ‘‘200 gm’’ after ‘‘1 gm of

Dextroamphetamine =’’ and inserting ‘‘2

kg’’; and by inserting ‘‘1 gm of

Dextroamphetamine (Actual) = 20 kg of

marihuana’’ after the line referenced to

‘‘Dextroamphetamine’’.

Option 2

Section 2D1.1(c)(1) is amended by

inserting after the fifth entry the

following:

‘‘15 KG or more of Amphetamine, or

1.5 KG or more of Amphetamine

(actual), or 15 KG or more of

Dextroamphetamine, or 1.5 KG or more

of Dextroamphetamine (actual);’’.

Section 2D1.1(c)(2) is amended by

inserting after the fifth entry the

following:

‘‘At least 5 KG but less than 15 KG of

Amphetamine, or at least 500 G but less

than 1.5 KG of Amphetamine (actual), or

at least 5 KG but less than 15 KG of

Dextroamphetamine, or at least 500 G

but less than 1.5 KG of

Dextroamphetamine (actual);’’.

Section 2D1.1(c)(3) is amended by

inserting after the fifth entry the

following:

‘‘At least 1.5 KG but less than 5 KG

of Amphetamine, or at least 150 G but

less than 500 G of Amphetamine

(actual), or at least 1.5 KG but less than

5 KG of Dextroamphetamine, or at least

150 G but less than 500 G of

Dextroamphetamine (actual);’’.

Section 2D1.1(c)(4) is amended by

inserting after the fifth entry the

following:

‘‘At least 500 G but less than 1.5 KG

of Amphetamine, or at least 50 G but

less than 150 G of Amphetamine

(actual), or at least 500 G but less than

1.5 KG of Dextroamphetamine, or at

least 50 G but less than 150 G of

Dextroamphetamine (actual);’’.

Section 2D1.1(c)(5) is amended by

inserting after the fifth entry the

following:

‘‘At least 350 G but less than 500 G

of Amphetamine, or at least 35 G but

less than 50 G of Amphetamine (actual),

or at least 350 G but less than 500 G of

Dextroamphetamine, or at least 35 G but

less than 50 G of Dextroamphetamine

(actual);’’.

Section 2D1.1(c)(6) is amended by

inserting after the fifth entry the

following:

‘‘At least 200 G but less than 350 G

of Amphetamine, or at least 20 G but

less than 35 G of Amphetamine (actual),

or at least 200 G but less than 350 G of

Dextroamphetamine, or at least 20 G but

less than 35 G of Dextroamphetamine

(actual);’’.

Section 2D1.1(c)(7) is amended by

inserting after the fifth entry the

following:

‘‘At least 50 G but less than 200 G of

Amphetamine, or at least 5 G but less

than 20 G of Amphetamine (actual), or

at least 50 G but less than 200 G of

Dextroamphetamine, or at least 5 G but

less than 20 G of Dextroamphetamine

(actual);’’.

Section 2D1.1(c)(8) is amended by

inserting after the fifth entry the

following:

‘‘At least 40 G but less than 50 G of

Amphetamine, or at least 4 G but less

than 5 G of Amphetamine (actual), or at

least 40 G but less than 50 G of

Dextroamphetamine, or at least 4 G but

less than 5 G of Dextroamphetamine

(actual);’’.

Section 2D1.1(c)(9) is amended by

inserting after the fifth entry the

following:

‘‘At least 30 G but less than 40 G of

Amphetamine, or at least 3 G but less

than 4 G of Amphetamine (actual), or at

least 30 G but less than 40 G of

Dextroamphetamine, or at least 3 G but

less than 4 G of Dextroamphetamine

(actual);’’.

Section 2D1.1(c)(10) is amended by

inserting after the fifth entry the

following:

‘‘At least 20 G but less than 30 G of

Amphetamine, or at least 2 G but less

than 3 G of Amphetamine (actual), or at

least 20 G but less than 30 G of

Dextroamphetamine or at least 2 G but

less than 3 G of Dextroamphetamine

(actual);’’.

Section 2D1.1(c)(11) is amended by

inserting after the fifth entry the

following:

‘‘At least 10 G but less than 20 G of

Amphetamine, or at least 1 G but less

than 2 G of Amphetamine (actual), or at

least 10 G but less than 20 G of

Dextroamphetamine, or at least 1 G but

less than 2 G of Dextroamphetamine

(actual);’’.

Section 2D1.1(c)(12) is amended by

inserting after the fifth entry the

following:

‘‘At least 5 G but less than 10 G of

Amphetamine, or at least 500 MG but

less than 1 G of Amphetamine (actual),

or at least 5 G but less than 10 G of

Dextroamphetamine, or at least 500 MG

but less than 1 G of Dextroamphetamine

(actual);’’.

Section 2D1.1(c)(13) is amended by

inserting after the fifth entry the

following:

‘‘At least 2.5 G but less than 5 G of

Amphetamine, or at least 250 MG but

less than 500 MG of Amphetamine

(actual), or at least 2.5 G but less than

5 G of Dextroamphetamine, or at least

250 MG but less than 500 MG of

Dextraomphetamine (actual);’’.

Section 2D1.1(c)(14) is amended by

inserting after the fifth entry the

following:

‘‘Less than 2.5 G of Amphetamine, or

less than 250 MG of Amphetamine

(actual), or less than 2.5 G of

Dextroamphetamine, or less than 250

MG of Dextraomphetamine (actual);’’.

Section 2D1.1(c) is amended in Note

(B) of the ‘‘Notes to Drug Quantity

Table’’, by inserting ‘‘, ‘‘Amphetamine

(actual), ‘‘Dextroamphetamine

(actual)’,’’ after ‘‘terms ‘‘PCP (actual)’’;

by inserting ‘‘, amphetamine,

dextroamphetamine,’’ after ‘‘substance

containing PCP’’; and by inserting ‘‘,

amphetamine (actual),

dextroamphetamine (actual),’’ after

‘‘weight of the PCP (actual)’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 9 by inserting ‘‘, amphetamine,

dextroamphetamine,’’ after ‘‘PCP’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 10 in the Drug Equivalency Tables

in the subdivision captioned ‘‘Cocaine

and Other Schedule I and II Stimulants

(and their immediate precursors)’’ by

striking ‘‘200 gm’’ after ‘‘1 gm of

Amphetamine = and inserting ‘‘2 kg’’;

by inserting ‘‘1 gm of Amphetamine

(Actual) = 20 kg of marihuana’’ after the

line referenced to ‘‘Amphetamine’’; by

striking ‘‘200 gm’’ after ‘‘1 gm of

Dextroamphetamine =’’ and inserting ‘‘2

kg’’; and by inserting ‘‘1 gm of

Dextroamphetamine (Actual) = 20 kg of

marihuana’’ after the line referenced to

‘‘Dextramphetamine’’.

Issues for Comment

(1) In response to the directive in the

Methamphetamine Anti-Proliferation

Act of 2000 that instructs the

Commission to provide, under

emergency amendment authority,

increased guideline penalties for

amphetamine such that those penalties

are comparable to the base offense level

for methamphetamine, the Commission

has proposed two amendment options

that use a 1:1 ratio between

amphetamine and methamphetamine

(i.e., the same quantities of

amphetamine and methamphetamine

will result in the imposition of the same

base offense level from the Drug

Quantity Table in § 2D1.1). The

Commission invites comment on

whether some alternative ratio should

be used. For example, should the

Commission use a 2:1 ratio or a 5:1 ratio

between amphetamine and

methamphetamine, and if so, why?

(2) Section 2D1.1(b)(4) currently

provides a two-level enhancement if the

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7965

offense involved the importation of

methamphetamine or the manufacture

of methamphetamine from listed

chemicals that the defendant knew were

imported unlawfully. The Commission

invites comment regarding whether this

enhancement should be amended to

include the importation of amphetamine

or the manufacture of amphetamine

from listed chemicals that the defendant

knew were imported unlawfully. If so,

should the Commission also include the

importation of dextroamphetamine or

the manufacture of dextroamphetamine

from listed chemicals that the defendant

knew were imported unlawfully,

particularly because

dextroamphetamine is so similar to

amphetamine and would be treated the

same as amphetamine under the

proposed amendment options?

Proposed Amendment: Trafficking in

List I Chemicals

3. Synopsis of Proposed Amendment:

This proposed amendment addresses

the three-part directive in the

Methamphetamine Anti-Proliferation

Act of 2000, section 3651 of Pub. L.

106–310 (the ‘‘Act’’), regarding

enhanced punishment for trafficking in

List I chemicals. That section requires

the Commission to promulgate an

amendment implementing the directive

under emergency amendment authority.

First, the directive instructs the

Commission ‘‘to provide increased

penalties for offenses involving

ephedrine, phenylpropanolamine (PPA),

or pseudoephedrine (including their

salts, optical isomers, and salts of

optical isomers) to correspond to the

quantity of controlled substance that

reasonably could have been

manufactured using the quantity of

ephedrine, PPA, and pseudoephedrine

possessed or distributed.’’ In response to

this directive, the proposed amendment

provides a new chemical table

specifically for ephedrine,

pseudoephedrine, and PPA. The table

ties the base offense levels for these

chemicals to the base offense levels for

methamphetamine (actual) set forth in

§ 2D1.1, assuming a 50 percent yield of

the controlled substance from the

chemicals. Methamphetamine (actual) is

used rather than methamphetamine

mixture because ephedrine, PPA, and

pseudoephedrine produce

methamphetamine (actual).

This new table has a maximum base

offense level of level 38 (as opposed to

a maximum base offense level of 30 for

all other precursor chemicals).

Providing a maximum base offense level

of level 38 increases the sentences for

ephedrine, pseudoephedrine, and PPA

by linking the theoretical yield of these

chemicals to methamphetamine (actual)

instead of methamphetamine (mixture)

as had been done in the past.

Additionally, this adjustment will have

an impact on the relationship between

§§ 2D1.1 and 2D1.11 by eliminating the

six-level distinction that currently exists

between offenses that involve

possession of these precursor chemicals

with intent to manufacture

methamphetamine and offenses that

involve an attempt to manufacture

methamphetamine, at least for offenses

involving ephedrine, PPA, and

pseudoephedrine.

In order to address cases that involve

more than one chemical, the proposed

amendment eliminates the ephedrine

equivalency table and instead proposes

a rule that would require the court to

determine the base offense level by

using the quantity of the single chemical

that results in the greatest base offense

level. An upward departure is provided

for cases in which the offense level does

not adequately address the seriousness

of the offense.

However, the proposed amendment

provides an exception to this rule for

offenses that involve a combination of

ephedrine, pseudoephedrine, or

phenylpropanolamine because these

chemicals often are used in the same

manufacturing process. In a case that

involves two or more of these

chemicals, the base offense level will be

determined using the total quantity of

the chemicals involved, based on an

ephedrine equivalency.

Second, the directive instructs the

Commission ‘‘to establish, based on

scientific, law enforcement, and other

data the Commission considers

appropriate, a table in which the

quantity of controlled substance that

could reasonably have been

manufactured shall be determined by

using a table of manufacturing

conversion ratios for ephedrine, PPA,

and pseudoephedrine.’’ In response to

the directive, the proposed amendment

adds to the Drug Equivalency Tables in

§ 2D1.1 a conversion table for

ephedrine, PPA, and pseudoephedrine

for cases that are cross-referenced out of

§ 2D1.11 because the offense involved

the manufacture of methamphetamine.

This table, which provides for a 50

percent conversion ratio for ephedrine,

PPA, and pseudoephedrine, was

developed using data from the Drug

Enforcement Agency, Office of

Diversion Control, as published on the

web site of the Office of National Drug

Control Policy (ONDCP). These data

indicate that the actual yield of

methamphetamine from ephedrine and

pseudoephedrine is ‘‘typically in the

range of 50 to 75 percent’’.

Third, the directive instructs the

Commission ‘‘to increase penalties for

offenses involving any List I chemical

other than ephedrine, PPA, and

pseudoephedrine, such that those

penalties reflect the dangerous nature of

such offenses, the need for aggressive

law enforcement action to fight such

offenses, and the extreme dangers

associated with unlawful activity

involving methamphetamine and

amphetamine.’’ In response to this

directive, the proposed amendment

increases the base offense level for

Benzaldehyde, Hydriodic Acid,

Methylamine, Nitroethane, and

Norpseudoephedrine by two levels.

These five additional List I chemicals

also are associated with

methamphetamine and amphetamine

production. The maximum base offense

level for these five chemicals will

increase from level 30 to level 32. All

other List I chemicals will remain at

their current maximum base offense

level of level 30.

An issue for comment follows the

proposed amendment regarding

whether, as an alternative, the

maximum base offense level in the

proposed Ephedrine, Pseudoephedrine,

Phenylpropanolamine Table in § 2D1.11

should be set lower than the maximum

base offense level in § 2D1.1. This

reduction would maintain the existing

distinction between offenses involving

possession of precursor chemicals with

intent to manufacture versus attempt to

manufacture for ephedrine, PPA, and

pseudoephedrine currently captured by

the maximum base offense level of 30 in

§ 2D1.11. The original relationship

between controlled substances in

§ 2D1.1 and list I chemicals in § 2D1.11

presumed a 50 percent yield of

controlled substances from each

chemical and then reduced the entire

table by eight levels. The eight level

distinction later was reduced to six

levels in response to a congressional

directive.

Proposed Amendment

Section 2D1.11(d) is amended by

striking the Chemical Quantity Table

and the Notes that follow the Table in

their entirety and inserting the

following:

7966 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

(D)(1) EPHEDRINE, PSEUDOEPHEDRINE, AND PHENYLPROPANOLAMINE QUANTITY TABLE*

[Methamphetamine and amphetamine precursor chemicals]

Quantity Base offense

level

(1) 3 KG or more of Ephedrine; 3 KG or more of Phenylpropanolamine; 3 KG or more of Pseudoephedrine .............................. Level 38.

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

but less than 3 KG of Pseudoephedrine.

Level 36.

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

G but less than 1 KG of Pseudoephedrine.

Level 34.

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

100 G but less than 300 G of Pseudoephedrine.

Level 32.

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

but less than 100 G of Pseuodoephedrine.

Level 30.

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

but less than 70 G of Pseudoephedrine.

Level 28.

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

but less than 40 G of Pseudoephedrine.

Level 26.

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

less than 10 G of Pseudoephedrine.

Level 24.

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

than 8 G of Pseudoephedrine.

Level 22.

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

less than 6 G of Pseudoephedrine.

Level 20.

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

less than 4 G of Pseudoephedrine.

Level 18.

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

less than 2 G of Pseudoephedrine.

Level 16.

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

500 MG but less than 1 G of Pseudoephedrine.

Level 14.

(14) Less than 500 MG of Ephedrine; Less than 500 MG of Phenylpropanolamine; Less than 500 MG of Pseudoephedrine .... Level 12

(D)(2) CHEMICAL QUANTITY TABLE *

[All other precursor chemicals]

Listed chemicals and quantity Base offense

level

(1) List I Chemicals: .......................................................................................................................................................................... Level 32.

51 KG or more of Benzaldehyde;

132 KG or more of Hydriodic Acid;

12 KG or more of Methylamine;

37.8 KG or more of Nitroethane;

600 KG or more of Norpseudoephedrine.

(2) List I Chemicals: .......................................................................................................................................................................... Level 30.

At least 17 KG but less than 51 KG of Benzaldehyde;

20 KG or more of Benzyl Cyanide;

200 G or more of Ergonovine;

400 G or more of Ergotamine;

20 KG or more of Ethylamine;

At least 44 KG but less than 132 KG of Hydriodic Acid;

320 KG or more of Isosafrole;

At least 4 KG but less than 12 KG of Methylamine;

500 KG or more of N-Methylephedrine;

500 KG or more of N-Methylpseudoephedrine;

At least 12.6 KG but less than 37.8 KG of Nitroethane;

At least 200 KG but less than 600 KG of Norpseudoephedrine;

20 KG or more of Phenylacetic Acid;

10 KG or more of Piperidine;

320 KG or more of Piperonal;

1.6 KG or more of Propionic Anhydride;

320 KG or more of Safrole;

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

(3) List I Chemicals: .......................................................................................................................................................................... Level 28.

At least 5.3 KG but less than 17.8 KG of Benzaldehyde;

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

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

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

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

At least 13.2 KG but less than 44 KG of Hydriodic Acid;

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

At least 1.2 KG but less than 4 KG of Methylamine;

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

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

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7967

(D)(2) CHEMICAL QUANTITY TABLE *—Continued

[All other precursor chemicals]

Listed chemicals and quantity Base offense

level

At least 3.8 KG but less than 12.6 KG of Nitroethane;

At least 60 KG but less than 200 KG of Norpseudoephedrine;

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

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

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

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

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

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

List II Chemicals:

11 KG or more of Acetic Anhydride;

1175 KG or more of Acetone;

20 KG or more of Benzyl Chloride;

1075 KG or more of Ethyl Ether;

1200 KG or more of Methyl Ethyl Ketone;

10 KG or more of Potassium Permanganate;

1300 KG or more of Toluene.

(4) List I Chemicals: .......................................................................................................................................................................... Level 26.

At least 1.8 KG but less than 5.3 KG of Benzaldehyde;

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

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

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

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

At least 4.4 KG but less than 13.2 KG of Hydriodic Acid;

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

At least 400 G but less than 1.2 KG of Methylamine;

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

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

At least 1.3 KG but less than 3.8 KG of Nitroethane;

At least 20 KG but less than 60 KG of Norpseudoephedrine;

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

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

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

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

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

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

List II Chemicals:

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

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

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

At least 322.5 KG but less than 1075 KG of Ethyl Ether;

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

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

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

(5) List I Chemicals: .......................................................................................................................................................................... Level 24.

At least 1.2 KG but less than 1.8 KG of Benzaldehyde;

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

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

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

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

At least 3.08 KG but less than 4.4 KG of Hydriodic Acid;

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

At least 280 G but less than 400 G of Methylamine;

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

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

At least 879 G but less than 1.3 KG of Nitroethane;

At least 14 KG but less than 20 KG of Norpseudoephedrine;

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

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

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

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

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

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

List II Chemicals:

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

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

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

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

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

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

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

7968 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

(D)(2) CHEMICAL QUANTITY TABLE *—Continued

[All other precursor chemicals]

Listed chemicals and quantity Base offense

level

(6) List I Chemicals: .......................................................................................................................................................................... Level 22.

At least 712 G but less than 1.2 KG of Benzaldehyde;

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

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

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

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

At least 1.76 KG but less than 3.08 KG of Hydriodic Acid;

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

At least 160 G but less than 280 G of Methylamine;

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

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

At least 503 G but less than 879 G of Nitroethane;

At least 8 KG but less than 14 KG of Norpseudoephedrine;

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

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

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

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

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

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

List II Chemicals:

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

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

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

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

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

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

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

(7) List I Chemicals: .......................................................................................................................................................................... Level 20.

At least 178 G but less than 712 G of Benzaldehyde;

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

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

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

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

At least 440 G but less than 1.76 KG of Hydriodic Acid;

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

At least 40 G but less than 160 G of Methylamine;

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

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

At least 126 G but less than 503 G of Nitroethane;

At least 2 KG but less than 8 KG of Norpseudoephedrine;

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

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

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

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

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

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

List II Chemicals:

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

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

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

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

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

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

At least 52 KG but less than 91 KG of Toluene.

(8) List I Chemicals: .......................................................................................................................................................................... Level 18.

At least 142 G but less than 178 G of Benzaldehyde;

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

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

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

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

At least 352 G but less than 440 G of Hydriodic Acid;

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

At least 32 G but less than 40 G of Methylamine;

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

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

At least 100 G but less than 126 G of Nitroethane;

At least 1.6 KG but less than 2 KG of Norpseudoephedrine;

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

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

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

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7969

(D)(2) CHEMICAL QUANTITY TABLE *—Continued

[All other precursor chemicals]

Listed chemicals and quantity Base offense

level

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

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

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

List II Chemicals:

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

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

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

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

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

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

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

(9) List I Chemicals: .......................................................................................................................................................................... Level 16.

3.6 KG or more of Anthranilic Acid;

At least 107 G but less than 142 G of Benzaldehyde;

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

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

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

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

At least 264 G but less than 352 G of Hydriodic Acid;

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

At least 24 G but less than 32 G of Methylamine;

4.8 KG or more of N-Acetylanthranilic Acid;

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

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

At least 75 G but less than 100 G of Nitroethane;

At least 1.2 KG but less than 1.6 KG of Norpseudoephedrine;

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

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

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

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

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

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

List II Chemicals:

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

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

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

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

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

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

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

(10) List I Chemicals: ........................................................................................................................................................................ Level 14.

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

At least 71.2 G but less than 107 G of Benzaldehyde;

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

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

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

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

At least 176 G but less than 264 G of Hydriodic Acid;

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

At least 16 G but less than 24 G of Methylamine;

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

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

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

At least 56.25 G but less than 75 G of Nitroethane;

At least 800 G but less than 1.2 KG of Norpseudoephedrine;

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

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

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

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

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

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

List II Chemicals:

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

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

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

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

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

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

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

(11) List I Chemicals:

7970 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

(D)(2) CHEMICAL QUANTITY TABLE *—Continued

[All other precursor chemicals]

Listed chemicals and quantity Base offense

level

Less than 2.7 KG of Anthranilic Acid;

Less than 71.2 G of Benzaldehyde;

Less than 80 G of Benzyl Cyanide;

Less than 800 MG of Ergonovine;

Less than 1.6 G of Ergotamine;

Less than 80 G of Ethylamine;

Less than 176 G of Hydriodic Acid;

Less than 1.44 KG of Isosafrole;

Less than 16 G of Methylamine;

Less than 3.6 KG of N-Acetylanthranilic Acid;

Less than 2.25 KG of N-Methylephedrine;

Less than 2.25 KG of N-Methylpseudoephedrine;

Less than 56.25 G of Nitroethane;

Less than 800 G of Norpseudoephedrine;

Less than 80 G of Phenylacetic Acid;

Less than 40 G of Piperidine;

Less than 1.44 KG of Piperonal;

Less than 7.2 G of Propionic Anhydride;

Less than 1.44 KG of Safrole;

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

List II Chemicals:

Less than 66 G of Acetic Anhydride;

Less than 7.05 KG of Acetone;

Less than 120 G of Benzyl Chloride;

Less than 6.45 KG of Ethyl Ether;

Less than 7.2 KG of Methyl Ethyl Ketone;

Less than 60 G of Potassium Permanganate;

Less than 7.8 KG of Toluene.

*Notes:

(A) Except as provided in subdivision (B),

to calculate the base offense level in an

offense that involves two or more chemicals,

use the quantity of the single chemical that

results in the greatest offense level, regardless

of whether the chemicals are set forth in

different tables or in different categories (i.e.

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

guideline.

(B) To calculate the base offense level in

an offense that involves two or more

chemicals set forth in the Ephedrine,

Pseudoephedrine, and Phenylpropanolamine

Quantity Table, (i) convert each chemical to

its ephedrine equivalency using the table

below; (ii) add the quantities that result from

that equivalency; and (iii) use the Ephedrine,

Pseudoephedrine, and Phenylpropanolamine

Quantity Table to determine the base offense

level.

Pseudoephedrine and

Phenylpropanolamine Equivalency

Table

1 gm of Pseudoephedrine=1 gm of

Ephedrine

1 gm of Phenylpropanolamine=1 gm of

Ephedrine

(C) In a case involving ephedrine,

pseudoephedrine, or

phenylpropanolamine tablets, use the

weight of the ephedrine,

pseudoephedrine, or

phenylpropanolamine contained in the

tablets, not the weight of the entire

tablets, in calculating the base offense

level.’’.

The Commentary to § 2D1.11

captioned ‘‘Application Notes’’ is

amended by striking the text of Note 4

in its entirety and inserting the

following:

‘‘(A) Determining the Base Offense

Level for Two or More Chemicals.—

Except as provided in subdivision B, if

the offense involves two or more

chemicals, use the quantity of the single

chemical that results in the greatest

offense level, regardless of whether the

chemicals are set forth in different

tables or in different categories (i.e., list

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

guideline.

Example: The defendant was in

possession of five kilograms of ephedrine and

300 grams of hydriodic acid. Ephedrine and

hydriodic acid typically are used together in

the same manufacturing process to

manufacture methamphetamine. The base

offense level for each chemical is calculated

separately and the chemical with the higher

base offense level is used. Five kilograms of

ephedrine result in a base offense level of

level 38; 300 grams of hydriodic acid result

in a base offense level of 16. In this case, the

base offense level would be level 38.

(B) Determining the Base Offense

Level for Offenses Involving Ephedrine,

Pseudoephedrine, or

Phenylpropanolamine.—If the offense

involves two or more chemicals set forth

in the Ephedrine, Pseudoephedrine, and

Phenylpropanolamine Quantity Table,

(i) convert each chemical to its

ephedrine equivalency; (ii) add the

quantities that result from that

equivalency; and (iii) use the Ephedrine,

Pseudoephedrine, and

Phenylpropanolamine Quantity Table to

determine the base offense level.

Example: The defendant was in

possession of 80 grams of ephedrine and 50

grams of phenylpropanolamine. The 50

grams of phenylpropanolamine converts to

50 grams of ephedrine, which when added to

the quantity of ephedrine, results in a total

of 130 grams of ephedrine. In this case, the

base offense level would be level 32.

(C) Upward Departure.—In a case

involving two or more chemicals used

to manufacture different controlled

substances, or to manufacture one

controlled substance by different

manufacturing processes, an upward

departure may be warranted if the

offense level does not adequately

address the seriousness of the offense.’’.

The Commentary to § 2D1.11

captioned ‘‘Application Notes’’ is

amended by striking Notes 5 and 6 in

their entirety; and by redesignating

Notes 7 and 8 as Notes 5 and 6,

respectively.

The Commentary to § 2D1.11

captioned ‘‘Background’’ is amended in

the first sentence by inserting

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7971

‘‘(including ephedrine,

pseudoephedrine, and

phenylpropanolamine)’’ after ‘‘list I

chemicals’’.

The Commentary to 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 10 in the ‘‘Drug Equivalency

Tables’’ by inserting after the

subdivision captioned ‘‘Schedule V

Substances’’ the following new

subdivision:

List I Chemicals (Relating to the

Manufacture of Amphetamine or

Methamphetamine) * * *

1 gm of Ephedrine=10 kg of marihuana

1 gm of Phenylpropanolamine=10 kg of

marihuana

1 gm of Pseudoephedrine=10 kg of

marihuana

* * * Provided, that in a case

involving ephedrine, pseudoephedrine,

or phenylpropanolamine tablets, use the

weight of the ephedrine,

pseudoephedrine, or

phenylpropanolamine contained in the

tablets, not the weight of the entire

tablets, in calculating the base offense

level.’’.

Issues for Comment

(1) Currently, there is a six level

difference between the base offense

levels in the Drug Quantity Table of

§ 2D1.1 and the Chemical Quantity

Table in § 2D1.11. (The original

relationship between controlled

substances in § 2D1.1 and list I

chemicals in § 2D1.11 presumed a 50

percent yield of controlled substances

from each chemical and then reduced

the entire table in § 2D1.11 by eight

levels. The eight level distinction was

later reduced to six levels as a result of

a congressional directive.) This six level

difference effectively creates a

distinction between offenses involving

possession of precursor chemicals with

intent to manufacture a controlled

substance and offenses involving an

actual attempt to manufacture a

controlled substance. However, the

proposed amendment essentially will

eliminate this distinction for cases

involving ephedrine, pseudoephedrine,

and phenylpropanolamine by (1)

Eliminating that six-level difference in

offense level from the § 2D1.1 offense

level that corresponds to the amount of

controlled substance that could be

manufactured from a given quantity of

precursor chemical (assuming a 50%

yield); and (2) setting the maximum

base offense level at level 38, the

maximum base offense level provided

for the manufacture of

methamphetamine in § 2D1.1. The

Commission invites comment regarding

whether the maximum base offense

level for the proposed Ephedrine,

Pseudoephedrine,

Phenylpropanolamine Table in § 2D1.11

should be lower than level 38. A lower

maximum base offense level would

maintain a distinction between offenses

involving possession of precursor

chemicals with intent to manufacture

methamphetamine and offenses

involving an actual attempt to

manufacture methamphetamine.

(2) In response to the congressional

directive to increase penalties for

offenses involving List I chemicals other

than ephedrine, PPA, and

pseudoephedrine, the Commission

invites comment regarding whether, in

addition to or instead of the proposed

amendment, the penalty structure in

§ 2D1.11 should be changed to increase

penalties for Benzaldehyde, Hydriodic

Acid, Methylamine, Nitroethane, and

Norpseudoephedrine at each quantity

level in the Chemical Quantity Table,

and if so, by how much.

Proposed Amendment: Human

Trafficking

4. Synopsis of Proposed Amendment:

This amendment implements the

directive found at section 112(b) of the

Victims of Trafficking and Violence

Protection Act of 2000 (the ‘‘Act’’), Pub.

L. 106–386.

The directive confers emergency

authority on the Commission to amend

the federal sentencing guidelines to

reflect changes to 18 U.S.C. 1581(a)

(Peonage), 1583 (Enticement into

Slavery), and 1584 (Sale into

Involuntary Servitude). The

Commission is also directed to consider

how to address four new statutes: 18

U.S.C. 1589 (Forced Labor); 18 U.S.C.

1590 (Trafficking with Respect to

Peonage, Involuntary Servitude or

Forced Labor); 18 U.S.C. 1591 (Sex

Trafficking of Children by Force, Fraud

or Coercion); and 18 U.S.C. § 1592

(Unlawful Conduct with Respect to

Documents in Furtherance of Peonage,

Involuntary Servitude or Forced Labor).

Specifically, the Commission is

directed to ‘‘review and, if appropriate,

amend the sentencing guidelines

applicable to * * * the trafficking of

persons including * * * peonage,

involuntary servitude, slave trade

offenses, and possession, transfer or sale

of false immigration documents in

furtherance of trafficking, and the Fair

Labor Standards Act and the Migrant

and Seasonal Agricultural Worker

Protection Act.’’

The Commission is directed to ‘‘take

all appropriate measures to ensure that

these sentencing guidelines * * * are

sufficiently stringent to deter and

adequately reflect the heinous nature of

these offenses.’’ The Commission is also

directed to ‘‘consider providing

sentencing enhancements’’ in cases

which involve: (A) a large number of

victims; (B) a pattern of continued and

flagrant violations; (C) the use or

threatened use of a dangerous weapon;

or (D) the death or bodily injury of any

person.

To address this multi-faceted

directive, this proposed amendment

makes changes to several existing

guidelines and creates a new guideline

for criminal violations of the Migrant

and Seasonal Agricultural Worker

Protection Act. Although the directive

instructs the Commission to amend the

guidelines applicable to the Fair Labor

Standards Act (29 U.S.C. 201 et. seq.),

a criminal violation of the Act is only

a Class B misdemeanor. See 29 U.S.C.

216. Thus, the guidelines are not

applicable to those offenses.

The proposed amendment references

the new offense at 18 U.S.C. 1591 to

§ 2G1.1 (Promoting Prostitution or

Prohibited Sexual Conduct). Section

1591 punishes a defendant who

participates in the transporting or

harboring of a person, or who benefits

from participating in such a venture,

with the knowledge that force, fraud or

coercion will be used to cause that

person to engage in a commercial sex

act or with knowledge that the person

is not 18 years old and will be forced

to engage in a commercial sex act.

Despite the statute’s inclusion in a

chapter of title 18 devoted mainly to

peonage offenses, section 1591 offenses

are analogous to the offenses referenced

to the prostitution guideline.

Section 2G1.1(b)(2) is proposed to be

amended to include a [6][9] level

increase for victimization of children

who have not attained the age of 12

years, a [4][6] level increase for

victimization of children who have not

attained the age of 14 years, and a [2][3]

level increase for children who have not

attained the age of 16 years. This change

increases by [2][5] levels the

punishment for victimization of a child

under 12 years of age and creates an

additional category of victims—children

between the ages of 12 and 14 years.

These changes were proposed in

recognition of Congress’s distinction in

section 1591 between offenses involving

minors under 14 years of age (statutory

cap of ‘‘any term of years or life’’) and

offenses involving minors between 14

and 18 years of age (statutory cap of

‘‘not more than 20 years’’). This change

conforms the guidelines to the penalties

of section 1591.

The special instruction at

§ 2G1.1(d)(2) has been added to ensure

that attempts to violate section 1591 are

7972 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

not to be referred to § 2X1.1 (Attempt,

Solicitation, or Conspiracy). This

change implements Congress’s direction

in 18 U.S.C. 1594 that ‘‘whoever

attempts to violate section * * * 1591

shall be punishable in the same manner

as a completed violation of that

section.’’

An additional application note—

Application Note 12—has been added to

§ 2G1.1 to provide an encouraged

upward departure when an offense

‘‘involved substantially more than

[6][10][25] victims.’’ This encouraged

upward departure was added in

response to Congress’s directive that the

Commission consider enhanced

sentencing in cases which involve ‘‘a

large number of victims.’’ A departure

note is provided, rather than an

enhancement, because of the current

special grouping rule in § 2G1.1(d)(1)

regarding multiple victims that requires

that counts involving different victims

not be grouped.

Section 1591 cases have been

alternatively referred in Appendix A to

§ 2G2.1 (Sexually Exploiting a Minor by

Production of Sexually Explicit Visual

or Printed Material). This has been done

in anticipation that some portion of

section 1591 cases will involve children

being forced or coerced to engage in

commercial sex acts for the purpose of

producing pornography. Such offenses,

as recognized by the higher base offense

level at § 2G2.1, are more serious

because they both involve specific harm

to an individual victim and further an

additional criminal purpose,

commercial pornography. In the interest

of consistency and proportionality, the

same changes have been made to

§ 2G2.1 as those discussed above for

§ 2G1.1.

The proposed amendment conforms

to the view that § 2H4.1 (Peonage,

Involuntary Servitude, and Slave Trade)

continues to be an appropriate tool for

determining sentences for violations of

18 U.S.C. 1581, 1583, and 1584 . Section

2H4.1 is also designed to cover offenses

under three new statutes, 18 U.S.C.

1589, 1590, and 1592. Section 1589

punishes defendants who provide or

obtain the labor services of another by

the use of threats of serious harm or

physical restraint against a person, or by

a scheme or plan intended to make the

person believe that if he or she did not

perform the labor or services, he or she

would suffer physical restraint or

serious harm. This statute also applies

to defendants who provide or obtain

labor services of another by abusing or

threatening abuse of the law or the legal

process. See 18 U.S.C. 1589. Section

1590 punishes defendants who harbor,

transport, or are otherwise involved in

obtaining, a person for labor or services.

Section 1592 punishes a defendant who

knowingly possesses, destroys, or

removes an actual passport, other

immigration document, or government

identification document of another

person in the course of a violation of

§§ 1581 (peonage), 1583 (enticement

into slavery), 1584 (sale into involuntary

servitude), 1589 (forced labor), 1590

(trafficking with respect to these

offenses), 1591 (sex trafficking of

children by force, fraud or coercion), or

1594(a) (attempts to violate these

offenses). Section 1592 also punishes a

defendant who, with intent to violate

§ 1581, § 1583, § 1584, § 1589, § 1590, or

§ 1591, knowingly possesses, destroys,

or removes an actual passport, other

immigration document, or government

identification document of another

person. These statutes prohibit the types

of behaviors which have been

traditionally sentenced under § 2H4.1.

The proposed amendment provides

an alternative, less punitive base offense

level for those who violate 18 U.S.C.

1592, an offense which limits

participation in peonage cases to the

destruction or wrongful confiscation of

a passport or other immigration

document. This alternative, lower base

level reflects the lower statutory

maximum sentence set for section 1592

offenses (i.e., 5 years). The amendment

proposes level [15] as the appropriate

level because similar offenses involving

documents are punishable at level 15

under § 2L2.1 (Trafficking in a

Document Relating to Naturalization,

Citizenship or Legal Resident Status or

a United States Passport). However, the

proposed amendment also includes an

additional, bracketed base offense level

of [18].

Section 2H4.1(b)(2) has been

expanded to provide a 2-level increase

if a dangerous weapon was brandished

or its use was threatened, with an

increase to 4 levels for actual use.

Currently, only actual use of a

dangerous weapon is covered. This

change reflects Congress’s directive to

consider an enhancement for the ‘‘use or

threatened use of a dangerous weapon.’’

The proposed amendment adds an

enhancement at § 2H4.1(b)(3), for

offenses involving more than [6][10][25]

victims. This change reflects Congress’s

directive to consider an enhancement

for cases ‘‘involving a large number of

victims.’’ Also, § 2H4.1, Application

Note 3, which formerly provided an

encouraged upward departure for

offenses involving more than 10 victims,

has been altered to encourage departure

‘‘if the offense involved substantially

more than [6][10][25] victims.’’

The proposed amendment also adds

§ 2H4.1 to the list of guidelines in

§ 2X1.1 that expressly cover attempts

and conspiracies. This change

implements Congress’s direction in 18

U.S.C. 1594 that ‘‘whoever attempts to

violate § 1581, § 1583, § 1584, § 1589,

§ 1590, or § 1591 shall be punishable in

the same manner as a completed

violation of that section.’’ With the

exception of section 1591, all the

specified statutes are referenced to

§ 2H4.1. Conforming amendments are

made to the title of § 2H4.1.

The proposed amendment creates a

new guideline, § 2H4.2 (Willful

Violations of the Migrant and Seasonal

Agricultural Worker Protection Act), in

response to Congress’s directive to

amend the guidelines applicable to such

offenses. These offenses, which have a

statutory maximum sentence of one year

imprisonment for first offenses and

three years imprisonment for

subsequent offenses, currently are not

referred to any specific guideline. The

Department of Justice and Department

of Labor both recommend creation of a

discrete guideline for these offenses.

The proposed base offense level (level

[4][6]) has been proposed in recognition

of the small statutory maximum

sentences set for these cases by

Congress. Similarly, § 2H4.2(b)(1), an

enhancement for bodily injury, and

§ 2H4.2(b)(2), an enhancement for

offenders who commit their offenses

after previously sustaining a civil

penalty for similar misconduct, have

been established to respond to

Congress’s directive that the

Commission consider sentencing

enhancement for these offense

characteristics. This section addresses

the Department of Justice’s and the

Department of Labor’s concern

regarding prior administrative and civil

adjudications.

This proposed amendment also

addresses that portion of section 112 of

the Act that amends chapter 77 of title

18, United States Code, to provide

mandatory restitution for peonage and

involuntary servitude offenses. The

proposed amendment amends § 5E1.1

(Restitution) to include a reference to 18

U.S.C. 1593 in the guideline provision

regarding mandatory restitution.

Proposed Amendment

Section 2G1.1 is amended by striking

subsection (b)(2) in its entirety and

inserting the following:

‘‘[(2) If the offense involved a victim

who had (A) not attained the age of 12

years, increase by [6][9] levels; (B)

attained the age of 12 years but not

attained the age of 14 years, increase by

[4][6] levels; or (C) attained the age of 14

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7973

years but had not attained the age of 16

years, increase by [2][3] levels.]’’.

Section 2G1.1(d) is amended by

adding at the end the following:

‘‘(2) If the defendant was convicted of

an attempt to commit an offense under

18 U.S.C. 1591, do not apply § 2X1.1

(Attempt, Solicitation, or Conspiracy

(Not Covered by a Specific Offense

Guideline)).’’.

The Commentary to § 2G1.1 captioned

‘‘Statutory Provisions’’ is amended by

inserting ‘‘1591,’’ before ‘‘2421’’.

The Commentary to § 2G1.1 captioned

‘‘Application Notes’’ is amended in

Note 2 in the fourth sentence by adding

‘‘(B)’’ after ‘‘purposes of subsection

(b)(1).’’.

The Commentary to § 2G1.1 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘[12.Upward Departure.—If the

offense involved substantially more

than [6][10][25] victims, an upward

departure may be warranted.]’’.

The Commentary to § 2G1.1 captioned

‘‘Background’’ is amended by adding at

the end the following paragraph:

‘‘This guideline also covers offenses

under section 1591 of title 18, United

States Code. These offenses involve

recruiting or transporting a person in

interstate commerce knowing either that

(A) force, fraud, or coercion will be used

to cause the person to engage in a

commercial sex act; or (B) the person (i)

had not attained the age of 18 years; and

(ii) will be caused to engage in a

commercial sex act.’’.

Section 2G2.1 is amended by striking

subsection (b)(1) in its entirety and

inserting the following:

‘‘[(1) If the offense involved a victim

who had (A) not attained the age of 12

years, increase by [6][9] levels; (B)

attained the age of 12 years but not

attained the age of 14 years, increase by

[4][6] levels; or (C) attained the age of 14

years but had not attained the age of 16

years, increase by [2][3] levels.]’’.

Section 2G2.1(c) is amended by

adding at the end the following:

‘‘(2) If the defendant was convicted of

an attempt to commit an offense under

18 U.S.C. 1591, do not apply § 2X1.1

(Attempt, Solicitation, or Conspiracy

(Not Covered by a Specific Offense

Guideline)).’’.

The Commentary to § 2G2.1 captioned

‘‘Statutory Provisions’’ is amended by

inserting ‘‘1591,’’ before ‘‘2251(a)’’.

The Commentary to § 2G2.1 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘[6. Upward Departure.—If the

offense involved substantially more

than [6][10][25] victims, an upward

departure may be warranted.]’’.

Section 2H4.1 is amended in the title

by adding ‘‘; Attempt or Conspiracy’’

after ‘‘Trade’’.

Section 2H4.1(a) is amended by

striking ‘‘22’’ and inserting the

following:

‘‘(1) 22; or

(2) [15][18], if the defendant was

convicted only of an offense under 18

U.S.C. 1592.’’.

Section 2H4.1(b) is amended by

striking subdivision (2) in its entirety

and inserting the following:

‘‘[(2) If (i) a dangerous weapon was

used, increase by 4 levels; or (ii) a

dangerous weapon was brandished or

its use was threatened, increase by 2

levels.]’’.

Section 2H4.1(b) is amended by

redesignating subdivisions (3) and (4) as

subdivisions (4) and (5), respectively,

and inserting after subdivision (2) the

following:

‘‘[(3) If the offense involved more than

[6][10][25] victims, increase by [2][4]

levels.]’’.

The Commentary to § 2H4.1 captioned

‘‘Statutory Provisions’’ is amended by

striking ‘‘1588’’ and inserting ‘‘1590,

1592’’.

The Commentary to § 2H4.1 captioned

‘‘Application Notes’’ is amended by

striking the text of Note 3 in its entirety

and inserting the following:

‘‘Upward Departure.’’ If the offense

involved substantially more than

[6][10][25] victims, an upward departure

may be warranted.’’.

The Commentary to § 2X1.1 captioned

‘‘Application Notes’’ is amended in

Note 1 in the second paragraph by

inserting after ‘‘2E5.1;’’ the following

new lines:

‘‘§ 2G1.1 (if the defendant was

convicted of an attempt to commit an

offense under 18 U.S.C. 1591 (See 18

U.S.C. 1594(a));

§ 2H4.1;’’.

The Commentary to § 2X1.1 captioned

‘‘Application Notes’’ is amended in

Note 1 in the third paragraph by

inserting ‘‘2H4.1’’ after ‘‘2H1.1’’.

Appendix A (Statutory Index) is

amended by inserting after the line

referenced to ‘‘18 U.S.C. 1588’’ the

following new lines:

‘‘18 U.S.C. 1589 2H4.1

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

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

18 U.S.C. 1592 2H4.1’’.

Chapter Two, Part H, is amended in

Subpart 4 by adding at the end the

following:

‘‘§ 2H4.2. Willful Violations of the

Migrant and Seasonal Agricultural

Worker Protection Act

(a) Base Offense Level: [4][6].

(b) Specific Offense Characteristics.

(1) If the offense involved (i) serious

bodily injury, increase by [4] levels; or

(ii) bodily injury, increase by [2] levels.

(2) If the defendant committed any

part of the instant offense subsequent to

sustaining a civil or administrative

adjudication for similar misconduct,

increase by [2] levels.

Commentary

Statutory Provision: 29 U.S.C. 1851

Application Notes:

1. Definitions.—For purposes of

subsection (b)(1), ‘‘bodily injury’’ and

‘‘serious bodily injury’’ have the

meaning given those terms in

Application Note 1 of the Commentary

to § 1B1.1 (Application Instructions).

2. Application of Subsection (b)(2).—

Section 1851 of title 29, United States

Code, covers a wide range of conduct.

Accordingly, the enhancement in

subsection (b)(2) applies only if the

instant offense is similar to previous

misconduct that resulted in a civil or

administrative adjudication under the

provisions of the Migrant and Seasonal

Agricultural Worker Protection Act (29

U.S.C. 1801 et seq.).’’.

Appendix A (Statutory Index) is

amended by inserting after the line

referenced to ‘‘29 U.S.C. 1141’’ the

following:

‘‘29 U.S.C. 1851 2H4.2’’.

Section 5E1.1(a)(1) is amended by

inserting ‘‘§ 1593,’’ after ‘‘18 U.S.C.’’.

The Commentary to § 5E1.1 captioned

‘‘Background’’ is amended in the first

paragraph by inserting ‘‘1593,’’ after ‘‘18

U.S.C. §§ ’’.

Part (B): Proposed Non-Emergency

Amendments

Proposed Amendment: Sexual Predators

5. Synopsis of Proposed Amendment:

This is a three-part amendment that

includes:

(A) Amendments to implement the

‘‘pattern of activity’’ directive in the

Protection of Children from Sexual

Predators Act of 1998, Pub. L. 105–314

(the ‘‘Act’’), and related amendments.

(B) Amendments related to grouping

certain child pornography counts of

conviction.

(C) Amendments to implement the

directive in the Act to provide an

enhancement for transportation offenses

under chapter 117 of title 18, United

States Code, and other related

amendments.

Part (A): Enhancement for Pattern of

Activity

Synopsis: Part A proposes several

options, including a possible

combination of approaches to satisfy the

7974 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

Congressional directive in the Act that

requires the Commission to increase the

penalties in any case in which the

defendant engaged in a pattern of

activity involving the sexual abuse or

exploitation of a minor. There are many

types of conduct that may indicate that

a defendant is a high risk sex offender

engaging in a pattern of prohibited

sexual conduct. Each of these

components considers various aspects

of sex offenders and the types of activity

involved in a pattern of behavior. There

are four options presented by this

amendment that could be used either in

combination or alone to implement the

directive. In addition to these four

options, the proposal amends the

guideline covering terms of supervised

release, § 5D1.2, to provide that the term

of supervised release for a defendant

convicted of a sex crime shall be the

maximum term authorized by statute.

The first option would create a new

Chapter Four guideline, § 4B1.5, that

aims to incapacitate high risk sex

offenders who have an instant offense of

conviction of sexual abuse and a prior

felony conviction for sexual abuse. Two

options are contained within this

option. Option 1A sanctions defendants

whose instant offense of conviction and

prior conviction involve prohibited

sexual conduct. In contrast to option 1B,

option 1A increases the defendant’s

criminal history to not less than

category IV or V, as opposed to criminal

history category VI. Option 1A also

includes a wider range of offenses

involving prohibited sexual conduct.

Under Option 1A, chapter 109A

offenses are bracketed for either (1)

possible exclusion from the scope of

instant offenses of conviction that

would trigger the guideline, or (2)

limiting those offenses to those that are

perpetrated against a minor. Excluding

chapter 109A offenses focuses

application of the guideline to those

defendants who use the internet or other

interstate means to prey on minors.

Option 1B tracks legislation from the

106th Congress that proposed a

mandatory minimum life sentence for

defendants whose instant offense of

conviction and prior conviction

involved direct sexual contact. This

option provides for sentences at or near

the statutory maximum for these types

of defendants.

The second option would create a

Chapter Four guideline, § 4B1.6, that

provides a five-level increase (and a

minimum offense level of level 32) for

defendants who engage in a pattern of

activity involving prohibited sexual

conduct. This guideline requires that (1)

the defendant’s instant offense of

conviction is a sex crime; and (2) the

defendant previously has engaged in

two or more instances of prohibited

sexual conduct, whether or not that

conduct resulted in a conviction.

The third option would provide a

Chapter Two specific offense

characteristic in the sexual abuse

guidelines. This specific offense

characteristic mirrors the current

pattern of activity adjustment in § 2G2.2

(Trafficking in Material Involving the

Sexual Exploitation of a Minor). A

defendant who abuses or exploits a

minor on two or more occasions will

receive a two-level increase in offense

level pursuant to this enhancement.

The fourth option provides language

encouraging an upward departure for a

defendant who commits repeated acts of

sexual abuse of the same minor. This

component would allow courts to

sanction a defendant for a pattern of

multiple acts of abuse of the same

victim over a period of time.

Proposed Amendment

(1) Option 1: Chapter Four, Part B, is

amended by adding at the end the

following:

‘‘§ 4B1.5. Repeat and Dangerous Sex

Offender

(a) A defendant is a repeat and

dangerous sex offender if—

(1) The instant offense of conviction

is a sex crime; and

(2) The defendant committed the

instant offense of conviction subsequent

to sustaining at least one sex offense

conviction.

(b) If (1) a repeat and dangerous sex

offender is not a career offender

pursuant to § 4B1.1 (Career Offender);

and (2) the offense level for that repeat

and dangerous sex offender from the

table below is greater than the offense

level otherwise applicable, the offense

level from the table below shall apply.

Offense statutory maximum Offense

level

(A) Life .......................................... [37]

(B) 25 years or more .................... [34]

(C) 20 years or more, but less

than 25 years ............................ [32]

(D) 15 years or more, but less

than 20 years ............................ [29]

(E) 10 years or more, but less

than 15 years ............................ [24]

(F) 5 years or more, but less than

10 years .................................... [17]

(G) More than 1 year, but less

than 5 years .............................. [12]

(c) If an adjustment from § 3E1.1

(Acceptance of Responsibility) applies,

decrease the applicable offense level in

subsection (b) by the number of levels

corresponding to that adjustment.

(d) A repeat and dangerous sex

offender’s criminal history category in

every case shall be [Option 1A: not less

than Category [IV][V]] [Option 1B:

Category VI].

Commentary

Application Notes:

1. Definitions.—For purposes of this

guideline:

‘Offense Statutory Maximum’ means

the maximum term of imprisonment

authorized for the instant offense of

conviction that is a sex crime, including

any increase in that maximum term

under a sentencing enhancement

provision that applies to that sex crime

because of the defendant’s prior

criminal record (such as the sentencing

enhancement provisions contained in

18 U.S.C. §§ 2247(a) and 2426(a)).

[Option 1A:

‘Sex offense conviction’ has the

meaning given that term in 18 U.S.C.

§ 2426, but such term does not include

trafficking in, receipt of, or possession

of, child pornography.

2. Requirement of Sex Crime as

Instant Offense of Conviction.—For

purposes of subsection (a)(1), the instant

offense of conviction must be an instant

offense of conviction under [chapter

109A,] [chapter 109A perpetrated

against a minor,] chapter 110 (not

including trafficking in, receipt of, or

possession of, child pornography, or

recordkeeping offenses), or chapter 117

(not including transmitting information

about a minor or filing a factual

statement about alien individual), of

title 18, United States Code, or an

attempt or a conspiracy to commit such

an offense.]

[Option 1B:

‘Sex offense conviction’ means a prior

conviction for (A) any sex crime referred

to in Application Note 2; or (B) any

offense under State law consisting of

conduct that would have been such a

sex crime if the conduct had occurred

within the special maritime and

territorial jurisdiction of the United

States. The term ‘‘State’’ has the

meaning given that term in 18 U.S.C.

§ 2426(b)(2).

2. Requirement of Sex Crime as

Instant Offense of Conviction.—For

purposes of subsection (a)(1), the instant

offense of conviction must be an instant

offense of conviction under 18 U.S.C.

§ 2241, § 2242, § 2243, § 2244, § 2245,

§ 2251A, or § 2423, including an attempt

or conspiracy to commit such an

offense.]

3. Determination of Prior Sex Offense

Convictions Under Subsection (a)(2).—

For purposes of subsection (a)(2), the

date that a defendant sustained a

conviction shall be the date that the

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7975

guilt of the defendant was established,

whether by guilty plea, trial or plea of

nolo contendere.

4. Determination of Offense Statutory

Maximum in the Case of Multiple

Counts of Conviction.—In a case in

which more than one count of the

instant offense of conviction is a felony

that is a sex crime, the court shall use

the maximum authorized term of

imprisonment for the count that has the

greatest offense statutory maximum, for

purposes of determining the offense

statutory maximum under subsection

(b).

[5. Departure Provision.—There may

be cases in which reliable information

indicates that the guideline sentence

resulting from application of this

guideline either understates or

overstates the likelihood that the

defendant will commit another sexual

offense, or the seriousness of the

defendant’s criminal history. In such

cases, an upward or a downward

departure, respectively, may be

warranted. Such reliable information

may include, for example, risk

assessments and other expert testimony

regarding the likelihood of

recidivism.]’’.

(2) Option 2:

Chapter Four, Part B, [as amended by

this amendment,] is amended by adding

at the end the following:

‘‘§ 4B1.6 Sexual Predator

If—

(a) the defendant is not a career

offender pursuant to § 4B1.1 (Career

Offender) and is not a repeat and

dangerous sex offender pursuant to

§ 4B1.5 (Repeat and Dangerous Sex

Offender); and

(b)(1) the instant offense of conviction

is a sex offense that the defendant

committed as part of a pattern of activity

involving prohibited sexual conduct

[with a minor]; [[and][or] (2) the instant

offense of conviction is a sex offense

and the defendant is a sexual predator],

increase by [5] levels; but if the resulting

offense level is less than [32][30],

increase to level [32][30].

Commentary

Application Notes:

1. Definitions.—For purposes of this

guideline:

‘Sex offense’ means an offense under

[chapter 109A,] [chapter 109A

perpetrated against a minor,] chapter

110 (not including trafficking, receipt,

or possession of, child pornography), or

chapter 117 of title 18, United States

Code, or an attempt or a conspiracy to

commit any such offense.

‘Pattern of activity’ means any

combination of two or more prior

separate instances of prohibited sexual

conduct by the defendant with a minor

victim other than a minor victim of the

instant offense of conviction, whether or

not the conduct resulted in a conviction

for such conduct.

‘Prohibited sexual conduct’ (A) means

any sexual activity for which a person

can be charged with a criminal offense;

(B) includes the production of child

pornography; (C) includes trafficking in

child pornography if the defendant has

a prior felony conviction for trafficking

in child pornography; and (D) does not

include possession of child

pornography. ‘Child pornography’ has

the meaning given that term in 18 U.S.C.

2256(8).

[2. Sexual Predator Determination.—

For purposes of this guideline, the

defendant is a sexual predator if the

court determines, under the totality of

the circumstances, that the defendant is

likely to continue to engage in

prohibited sexual conduct with minors

in the future. [In making this

determination, the court may rely on

information such as expert

psychosexual evaluations and other

reliable evidence.]]

Background: This guideline is

intended to provide lengthy

incarceration for offenders who present

a continuing danger to the public. It

applies to any offender whose instant

offense of conviction is a sex offense,

regardless of the specific sex offense of

conviction or Chapter Two guideline

under which the offender is sentenced.

The relevant criminal provisions

provide for increased statutory

maximum penalties for repeat sex

offenders and make those increased

statutory maximum penalties available

if the defendant was convicted of any of

several federal and state sex offenses

(see 18 U.S.C. 2247, 2426). In addition,

section 632 of Pub. L. 102–141 and

section 505 of Pub. L. 105–314 directed

the Commission to ensure lengthy

incarceration for offenders who engage

in a pattern of activity involving the

sexual abuse or exploitation of minors.

[The guideline is intended to target

those dangerous offenders for whom

future sex offending is likely. Research

has shown that recidivism rates vary

depending on characteristics of the

offender that may be determined at the

time of sentencing, such as a proven

sexual preference for minors or other

psychopathy. Psychosexual evaluations

by certified professionals using

empirically-validated risk assessment

instruments may be useful to identify

those offenders who are most likely to

reoffend.]

The statutory maximum term of

supervised release is recommended for

offenders sentenced under this

guideline. In addition, treatment and

monitoring are important tools for

supervising offenders and should be

considered as special conditions of the

term of supervised release that is

imposed.]’’.

(3) Option Three: Section 2A3.1(b) is

amended by adding at the end the

following:

‘‘(7) If the defendant engaged in a

pattern of activity involving the sexual

abuse or exploitation of a minor,

increase by [2] levels.’’.

The Commentary to § 2A3.1 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘8. Pattern of Activity

Enhancement.—

‘Pattern of activity involving the

sexual abuse or exploitation of a minor’

means any combination of two or more

separate instances of the sexual abuse or

sexual exploitation of a minor by the

defendant, whether or not the abuse or

exploitation (A) occurred during the

course of the offense; (B) involved the

same or different victims; or (C) resulted

in a conviction for such conduct.

‘Sexual abuse or exploitation’ means

conduct constituting criminal sexual

abuse of a minor, sexual exploitation of

a minor (including trafficking in

material relating to the sexual abuse or

exploitation of a minor), abusive sexual

contact of a minor, any similar offense

under state law, any offense involving

the promotion or enticement of minors

to engage in sexual activity, or an

attempt or a conspiracy to commit any

of the above offenses.

If the defendant engaged in the sexual

abuse or exploitation of a minor at any

time (whether or not such abuse or

exploitation occurred during the course

of the offense or resulted in a conviction

for such conduct) and subsection (b)(7)

does not apply, an upward departure

may be warranted. In addition, an

upward departure may be warranted if

the defendant received an enhancement

under subsection (b)(7) but that

enhancement does not adequately

reflect the seriousness of the sexual

abuse or exploitation involved or the

likelihood of recidivism.

Prior convictions taken into account

under subsection (b)(7) are also counted

for purposes of determining criminal

history points pursuant to Chapter Four,

Part A (Criminal History).’’.

Section 2A3.2(b) is amended by

adding at the end the following:

‘‘(5) If the defendant engaged in a

pattern of activity involving the sexual

abuse or exploitation of a minor,

increase by [2] levels.’’.

7976 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘9. Pattern of Activity

Enhancement.—

‘Pattern of activity involving the

sexual abuse or exploitation of a minor’

means any combination of two or more

separate instances of the sexual abuse or

sexual exploitation of a minor by the

defendant, whether or not the abuse or

exploitation (A) occurred during the

course of the offense; (B) involved the

same or different victims; or (C) resulted

in a conviction for such conduct.

‘Sexual abuse or exploitation’ means

conduct constituting criminal sexual

abuse of a minor, sexual exploitation of

a minor (including trafficking in

material relating to the sexual abuse or

exploitation of a minor), abusive sexual

contact of a minor, any similar offense

under state law, any offense involving

the promotion or enticement of minors

to engage in sexual activity, or an

attempt or a conspiracy to commit any

of the above offenses.

If the defendant engaged in the sexual

abuse or exploitation of a minor at any

time (whether or not such abuse or

exploitation occurred during the course

of the offense or resulted in a conviction

for such conduct) and subsection (b)(5)

does not apply, an upward departure

may be warranted. In addition, an

upward departure may be warranted if

the defendant received an enhancement

under subsection (b)(5) but that

enhancement does not adequately

reflect the seriousness of the sexual

abuse or exploitation involved or the

likelihood of recidivism.

Prior convictions taken into account

under subsection (b)(5) are also counted

for purposes of determining criminal

history points pursuant to Chapter Four,

Part A (Criminal History).’’.

Section 2A3.3(b) is amended by

adding at the end the following:

‘‘(3) If the defendant engaged in a

pattern of activity involving the sexual

abuse or exploitation of a minor,

increase by [2] levels.’’.

The Commentary to § 2A3.3 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘5. Pattern of Activity

Enhancement.—

‘Pattern of activity involving the

sexual abuse or exploitation of a minor’

means any combination of two or more

separate instances of the sexual abuse or

sexual exploitation of a minor by the

defendant, whether or not the abuse or

exploitation (A) occurred during the

course of the offense; (B) involved the

same or different victims; or (C) resulted

in a conviction for such conduct.

‘Sexual abuse or exploitation’ means

conduct constituting criminal sexual

abuse of a minor, sexual exploitation of

a minor (including trafficking in

material relating to the sexual abuse or

exploitation of a minor), abusive sexual

contact of a minor, any similar offense

under state law, any offense involving

the promotion or enticement of minors

to engage in sexual activity, or an

attempt or a conspiracy to commit any

of the above offenses.

If the defendant engaged in the sexual

abuse or exploitation of a minor at any

time (whether or not such abuse or

exploitation occurred during the course

of the offense or resulted in a conviction

for such conduct) and subsection (b)(3)

does not apply, an upward departure

may be warranted. In addition, an

upward departure may be warranted if

the defendant received an enhancement

under subsection (b)(3) but that

enhancement does not adequately

reflect the seriousness of the sexual

abuse or exploitation involved or the

likelihood of recidivism.

Prior convictions taken into account

under subsection (b)(3) are also counted

for purposes of determining criminal

history points pursuant to Chapter Four,

Part A (Criminal History).’’.

Section 2A3.4(b) is amended by

adding at the end the following:

‘‘(6) If the defendant engaged in a

pattern of activity involving the sexual

abuse or exploitation of a minor,

increase by [2] levels.’’.

The Commentary to § 2A3.4 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘9. Pattern of Activity

Enhancement.—

‘Pattern of activity involving the

sexual abuse or exploitation of a minor’

means any combination of two or more

separate instances of the sexual abuse or

sexual exploitation of a minor by the

defendant, whether or not the abuse or

exploitation (A) occurred during the

course of the offense; (B) involved the

same or different victims; or (C) resulted

in a conviction for such conduct.

‘Sexual abuse or exploitation’ means

conduct constituting criminal sexual

abuse of a minor, sexual exploitation of

a minor (including trafficking in

material relating to the sexual abuse or

exploitation of a minor), abusive sexual

contact of a minor, any similar offense

under state law, any offense involving

the promotion or enticement of minors

to engage in sexual activity, or an

attempt or a conspiracy to commit any

of the above offenses.

If the defendant engaged in the sexual

abuse or exploitation of a minor at any

time (whether or not such abuse or

exploitation occurred during the course

of the offense or resulted in a conviction

for such conduct) and subsection (b)(6)

does not apply, an upward departure

may be warranted. In addition, an

upward departure may be warranted if

the defendant received an enhancement

under subsection (b)(6) but that

enhancement does not adequately

reflect the seriousness of the sexual

abuse or exploitation involved or the

likelihood of recidivism.

Prior convictions taken into account

under subsection (b)(6) are also counted

for purposes of determining criminal

history points pursuant to Chapter Four,

Part A (Criminal History).’’.

(4) Option Four: The Commentary to

§ 2A3.1 captioned ‘‘Application Notes’’

is amended by adding at the end the

following:

‘‘8. Upward Departure Provision.—If

the defendant committed repeated acts

of sexual abuse of the same minor over

a period of time and the court

determines that the guideline has not

adequately taken these repeated acts

into account, an upward departure may

be warranted.’’.

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘9. Upward Departure Provision.—If

the defendant committed repeated acts

of sexual abuse of the same minor over

a period of time and the court

determines that the guideline has not

adequately taken these repeated acts

into account, an upward departure may

be warranted.’’.

The Commentary to § 2A3.3 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘5. Upward Departure Provision.—If

the defendant committed repeated acts

of sexual abuse of the same minor over

a period of time and the court

determines that the guideline has not

adequately taken these repeated acts

into account, an upward departure may

be warranted.’’.

The Commentary to § 2A3.4 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘9. Upward Departure Provision.—If

the defendant committed repeated acts

of sexual abuse of the same minor over

a period of time and the court

determines that the guideline has not

adequately taken these repeated acts

into account, an upward departure may

be warranted.’’.

(5) Conforming Amendments: The

Commentary to § 2A3.1 captioned

‘‘Application Notes’’ is amended by

striking Notes 5 and 7 in their entirety;

and by redesignating Note 6 as Note 5.

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended by

striking Note 8.

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7977

The Commentary to § 2A3.3 captioned

‘‘Application Notes’’ is amended by

striking Note 4.

The Commentary to § 2A3.4 captioned

‘‘Application Notes’’ is amended by

striking Note 8.

(6) Supervised Release Provision:

Section 5D1.2 is amended by striking

subsection (b) in its entirety and

inserting the following:

‘‘(b) Except as otherwise provided—

(1) The term of supervised release

imposed shall be not less than any

statutorily required term of supervised

release; and

(2) If the instant offense of conviction

is a sex offense, the term of supervised

release shall be the maximum term of

supervised release authorized by

statute.’’.

The Commentary to § 5D1.2 captioned

‘‘Application Notes’’ is amended in

Note 1 by inserting ‘‘Safety Valve

Cases.—’’ before ‘‘A defendant who

qualifies’’; in Note 2 by inserting

‘‘Supervised Release Cases.—’’ before

‘‘Upon motion of the Government’’; by

redesignating Notes 1 and 2 as Notes 2

and 3, respectively; and by inserting

before Note 2, as redesignated by this

amendment, the following:

‘‘1. Definition.—For purposes of this

guideline, the term ‘sex offense’ means

an offense under [chapter 109A,]

[chapter 109A perpetrated against a

minor,] chapter 110 (not including

trafficking, receipt, or possession of,

child pornography), or chapter 117 of

title 18, United States Code, or an

attempt or a conspiracy to commit any

such offense.’’.

Issue for Comment: Option Two

proposes a new guideline at § 4B1.6 that

would provide a five-level increase and

a minimum offense level of level [32] if

the defendant is a sexual predator. As

highlighted by the bracketed language

‘‘[and][or]’’ in § 4B1.6(b)(2), the

Commission invites comment regarding

whether the court must find both that

the defendant is a sexual predator and

that the defendant engaged in a pattern

of activity involving sexual abuse or

exploitation, or whether a finding of one

of these factors would be sufficient in

order for the five-level increase to apply.

Part (B): Grouping

Synopsis: Part B of the proposed

amendment resolves a circuit conflict

regarding who the ‘‘victim’’ is in child

pornography cases for purposes of

grouping of multiple counts. The

amendment proposes two options for

resolving the circuit conflict on the

grouping of multiple counts of child

pornography trafficking, receipt, and

possession. Option One would allow

grouping of child pornography

trafficking and possession counts

pursuant to § 3D1.2(d). This grouping

provision does not require a

determination of whether counts

involve the same victim in order to

calculate a combined adjusted offense

level for multiple counts of conviction.

Option Two would not permit the

grouping of multiple counts of child

pornography trafficking and possession

pursuant to § 3D1.2. This option is

based on the premise that multiple acts

of possession or trafficking represent

separate instances of fear and risk of

harm, and would require the assignment

of units pursuant to § 3D1.4.

Proposed Amendment

(1) Option One: Section 3D1.2(d) is

amended by inserting after ‘‘§§ 2F1.1,

2F1.2;’’ the following new line:

‘‘§§ 2G2.2, 2G2.4;’’.

(2) Option Two: The Commentary to

§ 2G2.1 captioned ‘‘Application Notes’’

is amended in Note 2 by adding at the

end the following new paragraph:

‘‘Similarly, [multiple counts involving

the exploitation of the same minor are

not to be grouped under § 3D1.2 and]

counts involving the production of

material involving the exploitation of a

minor are not to be grouped under

§ 3D1.2 with counts involving the

trafficking of material involving the

exploitation of a minor, even in cases in

which the production count and the

trafficking count involve the same

minor (i.e., cases that involve both a

count of producing material involving

the exploitation of a minor and a count

of trafficking in the same material). In

such cases, the harm involved in

producing the material is separate and

distinct from the harm involved in

trafficking in that material.’’.

The Commentary to § 2G2.2 captioned

‘‘Application Notes’’ is amended by

adding at the end the following

application note:

‘‘4. For purposes of Chapter Three,

Part D (Multiple Counts), multiple

counts involving trafficking in,

receiving, transporting, shipping,

advertising, or possessing with the

intent to distribute, material involving

the exploitation of a minor are not to be

grouped under § 3D1.2 (Groups of

Closely Related Counts). Such counts do

not involve ‘substantially the same

harm’ for purposes of § 3D1.2.

Similarly, such counts are not to be

grouped under § 3D1.2 with counts

involving the production of material

involving the exploitation of a minor,

even in cases in which the production

count and the trafficking count involve

the same minor (i.e., cases that involve

both a count of producing material

involving the exploitation of a minor

and a count of trafficking in the same

material). In such cases, the harm

involved in producing the material is

separate and distinct from the harm

involved in trafficking in that

material.’’.

The Commentary to § 2G2.4 captioned

‘‘Application Notes’’ is amended by

adding at the end the following

application note:

‘‘3. For purposes of Chapter Three,

Part D (Multiple Counts), multiple

counts involving the possession of

material involving the exploitation of a

minor are not to be grouped under

§ 3D1.2 (Groups of Closely Related

Counts). Such counts do not involve

‘substantially the same harm’ for

purposes of § 3D1.2.’’.

Section 3D1.2(d) is amended by

inserting ‘‘, 2G2.2, 2G2.4;’’ after

‘‘2G2.1’’.

Part (C): Enhancement for

Transportation Offenses and Other

Amendments

Synopsis: Part C of the proposed

amendment responds to the directive in

the Act to provide an enhancement for

offenses under chapter 117 of title 18,

United States Code, involving the

transportation of minors for prostitution

or prohibited sexual conduct. Pursuant

to the authority in the Act and pursuant

to the Commission’s general authority

under 28 U.S.C. 994 to promulgate

guideline amendments, the amendment

proposes a number of offense level

increases in § 2A3.2, the ‘‘statutory

rape’’ guideline, and in § 2A3.4, the

abusive sexual contact guideline.

Specifically, the amendment proposes

to do the following:

(1) Distinguish between chapter 117

violations that involve the commission

of an underlying sexual act and those

violations (e.g., sting cases) that do not,

by providing in an alternative base

offense level in § 2A3.2 three additional

levels for chapter 117 violations that

also involve an underlying sexual act.

(2) Provide an across-the-board threelevel increase in the base offense level

for offenses sentenced under § 2A3.2,

such that the base offense level (A) for

statutory rape in its most basic form

unaccompanied by aggravating conduct

is increased from level 15 to level 18;

(B) for a chapter 117 violation

(unaccompanied by a sexual act) is

increased from level 18 to level 21; and

(C) a chapter 117 violation

(accompanied by a sexual act) results in

a base offense level of level 24. This

increase also maintains the

proportionality between §§ 2A3.2 and

2G2.2.

(3) Provide an enhancement of 2

levels if the offense involved incest as

7978 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

an additional enhancement to the twolevel enhancement for custody, care, or

supervisory control, and provide in the

Commentary a definition of ‘‘incest’’

that tracks that found in the Model

Penal Code. A review of the 228 case

files from FY 99 that involved sex

crimes against children revealed that

26% of the offenders were parents or

relatives of the victim. Additionally, 45

other offenders were either the

boyfriend/girlfriend of the parent, or a

step-parent or step grandparent of the

victim.

(4) Amend the Statutory Index to

include a reference to the statutory rape

guideline, § 2A3.2, for chapter 117

offenses. Often in ‘‘sting’’ cases, the

defendant travels across state lines in

order to meet a minor for what the

defendant believes will be an encounter

involving consensual sexual activity.

(5) Make conforming changes to the

existing three-level decrease for chapter

117 violations that do not include

aggravating conduct so that such

violations receive the offense level

applicable to statutory rape in its basic

form.

(6) Make technical changes (such as

the addition of headings and the

reordering of applications notes) not

intended to have substantive effect.

In addition, the amendment proposes

to amend the guideline covering the

production of child pornography,

§ 2G2.1, to provide additional

enhancements to account for

aggravating conduct that may be present

in such cases, specifically, the

production of sadistic or masochistic

material, serious bodily injury, or the

trafficking of produced materials. Note

that the addition of the enhancement in

§ 2G2.1 for the production of sadistic or

masochistic material would result in the

grouping of child pornography

trafficking and production counts of

conviction under § 3D1.2(c), contrary to

the proposal in Option 2 of Part B of this

amendment. These amendments also are

intended to restore proportionality in

sentences between child pornography

production offenses and child

pornography trafficking offenses.

Proposed Amendment

Section 2A3.1(b) is amended by

adding at the end the following:

‘‘(7) If the offense involved incest,

increase by 2 levels.’’.

The Commentary to § 2A3.1 captioned

‘‘Application Notes’’ is amended in

Note 1 by striking ‘‘For purposes of this

guideline—’’ and inserting the

following:

‘‘Definitions.—For purposes of this

guideline:

‘Incest’ means any sexual act between

the defendant and the victim in any case

in which the defendant-victim

relationship is that of (A) ancestordescendant (e.g., parent-child and

grandparent-child); (B) brother-sister of

the whole or half blood; (C) sisterbrother of the whole or half blood; (D)

uncle-nephew of the whole blood; (E)

uncle-niece of the whole blood; (F)

aunt-nephew of the whole blood; or (G)

aunt-niece of the whole blood. The

relationships referred to in this

definition include blood relationships

without regard to legitimacy, the

relationship of parent-child by

adoption, and the relationship of step

parent-step child.’’; and by inserting

after ‘‘18 U.S.C. 2256(8).’’ the following

new paragraph:

‘‘ ‘Sexual act’ has the meaning given

that term in 18 U.S.C. 2246(2).’’.

The Commentary to § 2A3.1 captioned

‘‘Application Notes’’ is amended in

Note 2 by inserting ‘‘Custody, Care, and

Supervisory Control Enhancement.—’’

before ‘‘Subsection’’.

Section 2A3.2(a) is amended by

redesignating subdivisions (1) and (2) as

subdivisions (2) and (3), respectively;

and by inserting after ‘‘Base Offense

Level:’’ the following:

‘‘(1) [24], if the offense involved a

violation of chapter 117 of title 18,

United States Code and the commission,

or attempted commission, of a sexual

act;’’.

Section 2A3.2(a) is amended in

redesignated subdivision (2) by striking

‘‘18’’ and inserting ‘‘[21]’’; and by

inserting ‘‘, but not the commission, or

attempted commission, of a sexual act’’

before the semicolon.

Section 2A3.2(a) is amended in

redesignated subdivision (3) by striking

‘‘15’’ and inserting ‘‘[18]’’.

Section 2A3.2(b) is amended by

striking subdivision (4) in its entirety

and inserting the following:

‘‘(4) If (A) none of subsections (b)(1)

through (b)(3) applies; and (B)

subsection (a)(1) applies, decrease by 6

levels.’’;

By redesignating subdivision (4) as

subdivision (5); and by inserting after

subdivision (3) the following:

‘‘(4) If the offense involved incest,

increase by 2 levels.’’.

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended in

Note 1 by striking ‘‘For purposes of this

guideline—’’ and inserting the

following:

‘‘Definitions.—For purposes of this

guideline:

‘Incest’ means any sexual act between

the defendant and the victim in any case

in which the defendant-victim

relationship is that of (A) ancestordescendant (e.g., parent-child and

grandparent-child); (B) brother-sister of

the whole or half blood; (C) sisterbrother of the whole or half blood; (D)

uncle-nephew of the whole blood; (E)

uncle-niece of the whole blood; (F)

aunt-nephew of the whole blood; or (G)

aunt-niece of the whole blood. The

relationships referred to in this

definition include blood relationships

without regard to legitimacy, the

relationship of parent-child by

adoption, and the relationship of step

parent-step child.’’; and by inserting

after ‘‘(sexual abuse)’’ the following

paragraph:

‘‘ ‘Sexual act’ has the meaning given

that term in 18 U.S.C. 2246(2).’’.

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended by

striking Note 2 in its entirety; and by

redesignating Notes 3 through 7 as

Notes 2 through 6, respectively.

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended in

redesignated Note 2 (formerly Note 3) by

inserting ‘‘Custody, Care, and

Supervisory Control Enhancement.—’’

before ‘‘Subsection’’; and by inserting

‘‘(A)’’ after ‘‘(b)(1)’’.

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended in

redesignated Note 3 (formerly Note 4) by

inserting ‘‘Abuse of Position of Trust.—’’

before ‘‘If the’’; and by inserting ‘‘(A) or

(B)’’ after ‘‘(b)(1)’’.

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended in

redesignated Note 4 (formerly Note 5) by

inserting ‘‘Misrepresentation of

Identity.—’’ before ‘‘The enhancement’’.

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended in

redesignated Note 5 (formerly Note 6) by

inserting ‘‘Use of Computer or InternetAccess Device.—’’ before ‘‘Subsection

(b)(3) provides’’.

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended in

redesignated Note 6 (formerly Note 7) by

inserting ‘‘Cross Reference.—’’ before

‘‘Subsection (c)(1)’’.

The Commentary to § 2A3.2 captioned

‘‘Application Notes’’ is amended by

striking Note 8 in its entirety and

inserting the following:

‘‘7. Upward Departure

Considerations.—There may be cases in

which the offense level determined

under this guideline substantially

understates the seriousness of the

offense. In such cases, an upward

departure may be warranted. The

following is a non-exhaustive list of

factors that the court may consider in

determining whether an upward

departure is warranted:

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7979

(A) The defendant’s criminal history

includes a prior sentence for conduct

that is similar to the instant offense.

(B) The defendant committed the

criminal sexual act in furtherance of a

commercial scheme such as pandering,

transporting persons for the purpose of

prostitution, or the production of

pornography.’’.

Section 2A3.4(b) is amended by

adding at the end the following:

‘‘(6) If the offense involved incest,

increase by 2 levels.

(7) If the offense involved a violation

of chapter 117 of title 18, United States

Code, increase by 3 levels.’’.

The Commentary to § 2A3.4 captioned

‘‘Application Notes’’ is amended in

Note 1 by striking ‘‘For purposes of this

guideline—’’ and inserting the

following:

‘‘Definitions.—For purposes of this

guideline:

‘Incest’ means any sexual act between

the defendant and the victim in any case

in which the defendant-victim

relationship is that of (A) ancestordescendant (e.g., parent-child and

grandparent-child); (B) brother-sister of

the whole or half blood; (C) sisterbrother of the whole or half blood; (D)

uncle-nephew of the whole blood; (E)

uncle-niece of the whole blood; (F)

aunt-nephew of the whole blood; or (G)

aunt-niece of the whole blood. The

relationships referred to in this

definition include blood relationships

without regard to legitimacy, the

relationship of parent-child by

adoption, and the relationship of step

parent-step child.’’;

and by inserting at the end the

following:

‘‘ ‘Sexual act’ has the meaning given that

term in 18 U.S.C. § 2246(2).’’.

Section 2G2.1(b) is amended by

adding at the end the following:

‘‘(4) If (A) the offense involved the

production of sexually explicit material

that portrays sadistic or masochistic

conduct or other depictions of violence;

or (B) the victim sustained serious

bodily injury, increase by [2][4] levels.

(5) If the offense involved any

distribution of the sexually explicit

material, increase by [2] levels.’’.

The Commentary to § 2G2.1 captioned

‘‘Application Notes’’ is amended by

striking Note 1 in its entirety and

inserting the following:

‘‘1. Definitions.—For purposes of this

guideline:

‘Minor’ means an individual who had

not attained the age of 18 years.

‘Distribution’ has the meaning given

that term in Application Note 1 of the

Commentary to § 2G2.2 (Trafficking in

Material Involving the Sexual

Exploitation of a Minor; Receiving,

Transporting, Advertising, or Possessing

Material Involving the Sexual

Exploitation of a Minor with Intent to

Traffic).’’.

Appendix A (Statutory Index) is

amended in the line referenced to ‘‘18

U.S.C. § 2423(b)’’ by inserting ‘‘, 2A3.4’’

after ‘‘2A3.3’’.

Issues for Comment

(1) The Commission invites comment

on whether and, if so, to what extent,

the guidelines covering sexual abuse,

§§ 2A3.1 (Criminal Sexual Abuse),

2A3.2 (Criminal Sexual Abuse of a

Minor (Statutory Rape)), 2A3.3

(Criminal Sexual Abuse of a Ward), and

2A3.4 (Abusive Sexual Contact), should

be amended to provide an enhancement

if the offense involved the

transportation, persuasion, inducement,

enticement, or coercion of a child to

engage in prohibited sexual conduct. Do

enhancements added to these guidelines

(that became effective November 1,

2000) for use of a computer and/or

misrepresentation of a criminal

participant’s identity sufficiently

provide an appropriate enhancement, or

is an additional enhancement in these

guidelines for other aggravating conduct

needed?

(2) The Commission invites comment

on whether and, if so, to what extent,

the guidelines covering sexual abuse,

§§ 2A3.1 (Criminal Sexual Abuse),

2A3.2 (Criminal Sexual Abuse of a

Minor (Statutory Rape)), 2A3.3

(Criminal Sexual Abuse of a Ward), and

2A3.4 (Abusive Sexual Contact), should

be amended to provide an enhancement

in order to maintain proportionality

between these guidelines and the

guidelines covering pornography

offenses, particularly, 2G2.2 (Trafficking

In Material Involving the Sexual

Exploitation of a Minor).

Proposed Amendment: Stalking and

Domestic Violence

6. Synopsis of Proposed Amendment:

This proposed amendment addresses

section 1107 of the Victims of

Trafficking and Violence Act 2000 (the

‘‘Act’’), Pub. L. 106–386. That section

amends 18 U.S.C. 2261, 2261A, and

2262 to broaden the reach of these

statutes to include international travel

to stalk, commit domestic violence, or

violate a protective order. Section

2261A also is amended to broaden the

category of persons protected by this

statute to include intimate partners of

the person. The Act also amends section

2261A to provide a new offense at

section 2262A(2) which prohibits the

use of the mail or any facility of

interstate or foreign commerce to

commit a stalking offense. Several

technical changes were also made to

these statutes.

The Act also includes a directive to

the Commission to amend the federal

sentencing guidelines to reflect the

changes made to 18 U.S.C. 2261 with

specific consideration to be given to the

following factors:

(i) Whether the Federal Sentencing

Guidelines relating to stalking offences

should be modified in light of the

amendment made by this subsection;

and

(ii) Whether any changes the

Commission may make to the Federal

Sentencing Guidelines pursuant to

clause (i) should also be made with

respect to offenses under chapter 110A

of title 18, United States Code (stalking

and domestic violence offenses).

This proposed amendment increases

the base offense level in § 2A6.2

(Stalking or Domestic Violence) and

adds a cross reference to § 1B1.5

(Interpretation of References to Other

Offense Guidelines).

For several reasons, the proposed

amendment treats the new stalking by

mail offense the same under the

guidelines as other stalking offenses and

covers it under § 2A6.2 (Stalking or

Domestic Violence). First, the statutory

penalties for stalking by mail are the

same as the statutory penalties for other

stalking offenses. Second, although

there was some consideration to

referring this new offense to § 2A6.1

(Threatening or Harassing

Communications), stalking by mail

offenses differ significantly from

threatening communications in that

stalking by mail offenses require the

defendant’s intent to kill, or injure a

person, or place a person in reasonable

fear of death or serious bodily injury.

Third, referencing stalking by mail

offenses to § 2A6.1, could possibly

result in these offenses receiving higher

penalties than other stalking offenses.

For example, a defendant who writes a

threatening letter, violates a protective

order and engages in some conduct

evidencing an intent to carry out such

threat, receives an offense level of level

20 under § 2A6.1. A defendant who

commits a stalking offense, violates a

protective order, and actually commits

bodily injury on the person who is the

subject of the protection order, receives

an offense level of level 18 under

§ 2A6.2. Arguably, the second defendant

should receive punishment, equal to, or

perhaps greater than that received by

the first defendant.

Because of the concern with regard to

the proportionality in sentencing

stalking and domestic violence offenses

vis-a-vis other crimes, such as

7980 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

threatening or harassing

communications, this amendment

proposes to increase the base offense

level in § 2A6.2 from level 14 to level

[16][18]. Setting the base offense level at

level [16] [18] for stalking and domestic

violence crimes ensures that these

offenses are sentenced at or above the

offense levels for offenses involving

threatening and harassing

communications.

This amendment also amends

Application Note 3 to § 1B1.5

(Interpretation of References to Other

Offense Guidelines) to clarify generally

the operation of cross references. A

review of the 16 cases sentenced under

this guideline in fiscal years 1998 and

1999 indicated that there is some

confusion as to whether a cross

reference can and should be applied to

conduct that is not within federal

jurisdiction (e.g., conduct in violation of

state or local law) as is often the case in

stalking and domestic violence offenses.

This new application note makes clear

that, unless otherwise specified, cross

references in Chapter Two are to be

determined consistent with the

provisions of § 1B1.3 (Relevant

Conduct). Therefore, in a case in which

the guideline includes a reference to use

another guideline if the conduct

involved another offense, the other

offense includes conduct that may be a

state or local offense or conduct that

occurred under circumstances that

would constitute a federal offense had

the conduct taken place within the

territorial or maritime jurisdiction of the

United States.

Proposed Amendment

Section 2A6.2(a) is amended by

striking ‘‘14’’ and inserting ‘‘[16][18]’’.

The Commentary to § 2A6.2 captioned

‘‘Application Notes’’ is amended in

Note 1 by striking the last paragraph in

its entirety and inserting:

‘‘Stalking’ means (A) traveling with

the intent to kill, injure, harass, or

intimidate another person and, in the

course of, or as a result of, such travel,

placing the person in reasonable fear of

death or serious bodily injury to that

person, the person’s immediate family,

including that person’s spouse or

intimate partner; or (B) using the mail

or any facility of interstate or foreign

commerce to engage in a course of

conduct that places that person in

reasonable fear of the death of, or

serious bodily injury to, any of the

persons described in subdivision (A) of

this note. See 18 U.S.C. § 2261A.

‘Immediate family’ has the meaning set

forth in 18 U.S.C. § 115(c)(2). ‘Course of

conduct’ and ‘spouse or intimate

partner’ have the meaning given those

terms in 18 U.S.C. § 2266(2) and (7),

respectively.’’.

The Commentary to § 1B1.5 captioned

‘‘Application Notes’’ is amended in

Note 3 by inserting after the first

sentence the following:

‘‘Consistent with the provisions of

§ 1B1.3 (Relevant Conduct), such other

offense includes conduct that may be a

state or local offense or conduct that

occurred under circumstances that

would constitute a federal offense had

the conduct taken place within the

territorial or maritime jurisdiction of the

United States.’’.

Proposed Amendment: Re-Promulgation

of Emergency Amendment Regarding

Enhanced Penalties for Amphetamine

or Methamphetamine Laboratory

Operators as Permanent Amendment

7. Synopsis of Proposed Amendment:

This proposed amendment addresses

the ‘‘substantial risk’’ directive in the

Methamphetamine and Club Drug AntiProliferation Act of 2000 (the ‘‘Act’’),

section 102 of Pub. L. 106–310.

The Act requires the Commission to

promulgate amendments under

emergency amendment authority.

Although the Act generally provides

that the Commission shall promulgate

various amendments ‘‘as soon as

practicable,’’ the substantial risk

directive specifically requires that the

amendment implementing the directive

shall apply ‘‘to any offense occurring on

or after the date that is 60 days after the

date of the enactment’’ of the Act.

Because of ex post facto concerns raised

by this 60-day clause, the Commission

promulgated an amendment in

November 2000 that implemented the

substantial risk directive. The

amendment became effective December

16, 2000.

The directive instructs the

Commission to amend the federal

sentencing guidelines with respect to

any offense relating to the manufacture,

attempt to manufacture, or conspiracy to

manufacture amphetamine or

methamphetamine in (A) the Controlled

Substances Act (21 U.S.C. 801 et seq.);

(B) the Controlled Substances Import

and Export Act (21 U.S.C. 951 et seq.);

or (C) the Maritime Drug Law

Enforcement Act (46 U.S.C. App. 1901

et seq.).

In carrying out this directive, the Act

requires the Commission to provide the

following enhancements—

(A) if the offense created a substantial

risk of harm to human life (other than

a life described in subparagraph (B)) or

the environment, increase the base

offense level for the offense—

(i) By not less than 3 offense levels

above the applicable level in effect on

the date of the enactment of this Act; or

(ii) If the resulting base offense level

after an increase under clause (i) would

be less than level 27, to not less than

level 27; or

(B) If the offense created a substantial

risk of harm to the life of a minor or

incompetent, increase the base offense

level for the offense—

(i) By not less than 6 offense levels

above the applicable level in effect on

the date of the enactment of this Act; or

(ii) if the resulting base offense level

after an increase under clause (i) would

be less than level 30, to not less than

level 30.

Three options are now presented to

implement the directive on a permanent

basis.

Option 1.—Option 1 proposes to repromulgate the emergency amendment

without any changes. The pertinent

parts of Option 1 are as follows:

(1) Guidelines Amended.—The

amendment provides new

enhancements in §§ 2D1.1 (Unlawful

Manufacturing, Importing, Exporting, or

Trafficking) and 2D1.10 (Endangering

Human Life While Illegally

Manufacturing a Controlled Substance)

that also apply in the case of an attempt

or a conspiracy to manufacture

amphetamine or methamphetamine.

The amendment does not amend

§ 2D1.11 (Unlawfully Distributing,

Importing, Exporting or Possessing a

Listed Chemical) or § 2D1.12 (Unlawful

Possession, Manufacture, Distribution,

or Importation or Prohibited Flask or

Equipment). Although offenses that

involve the manufacture of

amphetamine or methamphetamine also

are referenced in Appendix (A)

(Statutory Index) to §§ 2D1.11 and

2D1.12, the cross reference in these

guidelines, which applies if the offense

involved the manufacture of a

controlled substance, will result in

application of § 2D1.1 and accordingly,

the new enhancements.

(2) Structure.—The basic structure of

the amendment to §§ 2D1.1 and 2D1.10

tracks the structure of the directive.

Accordingly, in § 2D1.1, the amendment

provides a three-level increase and a

minimum offense level of level 27 if the

offense (A) involved the manufacture of

amphetamine or methamphetamine; and

(B) created a substantial risk of either

harm to human life or the environment.

For offenses that created a substantial

risk of harm to the life of a minor or an

incompetent, the amendment provides a

six-level increase and a minimum

offense level of 30.

However, the structure of the

amendment in § 2D1.10 differs from that

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7981

in § 2D1.1 with respect to the first prong

of the enhancement (regarding

substantial risk of harm to human life or

to the environment). Specifically, the

amendment provides a three-level

increase and a minimum offense level of

level 27 if the offense involved the

manufacture of amphetamine or

methamphetamine without making

application of the enhancement

dependent upon whether the offense

also involved a substantial risk of either

harm to human life or the environment.

Consideration of whether the offense

involved a substantial risk of harm to

human life is unnecessary because

§ 2D1.10 applies only to convictions

under 21 U.S.C. 858, and the creation of

a substantial risk of harm to human life

is an element of a § 858 offense.

Therefore, the base offense level already

takes into account the substantial risk of

harm to human life. Consideration of

whether the offense involved a

substantial risk of harm to the

environment is unnecessary because the

directive predicated application of the

enhancement on substantial risk of

harm either to human life or to the

environment, and the creation of a

substantial risk of harm to human life is

necessarily present because it is an

element of the offense.

(3) Determining ‘‘Substantial Risk of

Harm’’.—Neither the directive nor any

statutory provision defines ‘‘substantial

risk of harm’’. Based on an analysis of

relevant case law that interpreted

‘‘substantial risk of harm’’, the

amendment provides commentary

setting forth factors that may be relevant

in determining whether a particular

offense created a substantial risk of

harm.

(4) Definitions.—The definition of

‘‘incompetent’’ is modeled after several

state statutes, which proved useful for

purposes of this amendment.

The definition of ‘‘minor’’ has the

meaning given that term in Application

Note 1 of the Commentary to § 2A3.1

(Criminal Sexual Abuse).

Option 2.—Option 2 proposes to

expand the emergency amendment, as

set forth in Option 1, to apply to the

manufacture of all controlled substances

rather than only amphetamine or

methamphetamine. Although the

directive specifically instructs the

Commission to provide increased

penalties for the manufacture of

amphetamine and methamphetamine,

the Commission may, under its general

promulgation authority, expand the

scope of an emergency amendment

when it re-promulgates the amendment

as a permanent amendment. The reason

for the proposed expansion is that if the

manufacture of any controlled substance

creates a substantial risk of harm to

human life or the environment, there is

a strong argument that the increased

penalties should apply regardless of the

type of controlled substances involved

in the offense. The pertinent parts of

Option 2 are as follows:

(1) § 2D1.1.—The enhancement in

subsection (b)(6) is proposed to apply to

the manufacture of any controlled

substance, not just to the manufacture of

amphetamine or methamphetamine.

The expansion to all controlled

substances in § 2D1.1 is rather

straightforward. Conforming changes are

made to the Commentary, but the

amendment to § 2D1.1 otherwise

remains the same as the emergency

amendment.

(2) § 2D1.10.—Option 2’s proposed

expansion to all controlled substances

in § 2D1.10 requires a restructuring of

the guideline (as it was amended by the

emergency amendment).

First, Option 2 proposes to increase

the alternative base offense level in

subsection (a)(1) from ‘‘3 plus’’ to ‘‘6

plus the offense level from the Drug

Quantity Table in § 2D1.1’’. This

proposed increase corresponds to the

proposed deletion of subsection

(b)(1)(A) of the emergency amendment.

As explained above in the description of

Option 1 under ‘‘Structure,’’ subsection

(b)(1)(A) provides a three-level increase

‘‘if the offense involved the manufacture

of amphetamine or methamphetamine,’’

without making application of the

enhancement dependent upon whether

the offense also involved a substantial

risk of either harm to human life or the

environment. However, if the

emergency amendment is to be

expanded to apply to the manufacture of

all controlled substances, this

enhancement no longer is appropriate.

In order not to lose the three-level

increase that was provided by this

enhancement, the three levels from this

enhancement are built into the

alternative base offense level in

subsection (a)(1).

Second, Option 2 proposes two

alternatives for addressing the minimum

offense level of level 27 that also was

provided by the enhancement in

subsection (b)(1)(A). Option 2(a)

increases the current alternative base

offense level in subsection (a)(2) from

level 20 to level 27. Although this

option is consistent with expanding the

entire emergency amendment to all

controlled substances, the impact of this

change is likely to be significant for

lower level drug offenders. Option 2(b)

proposes to add an additional

alternative base offense level of level 27

if the offense involved the manufacture

of amphetamine or methamphetamine,

but maintains the alternative base

offense level 20 for all other controlled

substances. Although this option has

less of an impact on lower level drug

offenders than Option 2(a), it is not

consistent with the approach otherwise

taken in Option 2 of expanding the

emergency amendment to cover all

controlled substances.

Finally, Option 2 makes the

enhancement that applies if the offense

created a substantial risk of harm to the

life of a minor or an incompetent

applicable to all controlled substances.

Conforming amendments are made to

the Commentary.

Option 3.—This option assumes that

the manufacture of amphetamine or

methamphetamine is inherently

dangerous and poses a substantial risk

of harm to human life or the

environment. Thus, the statutorily

directed minimum enhancement and

minimum offense level is automatic for

the manufacture of amphetamine or

methamphetamine. For all other

controlled substances, it must be proved

that the manufacturing process created

the substantial risk of harm.

This option also combines the

substantial risk enhancement with the

environmental damage enhancement in

§ 2D1.1(b)(5).

Proposed Amendment

Option 1:

Sections 2D1.1 and 2D1.10, as

amended by Amendment 608 (see

Supplement to the 2000 Supplement to

Appendix C), are repromulgated with

the following minor, editorial changes:

The Commentary to § 2D1.1 captioned

‘‘Background’’ is amended by striking

‘‘Public Law 106–878’’ and inserting

‘‘Public Law 106–310’’.

The Commentary to § 2D1.10

captioned ‘‘Background’’ is amended by

striking ‘‘Public Law 106–878’’ and

inserting ‘‘Public Law 106–310’’.

Option 2:

Section 2D1.1(b)(6)(A) is amended in

subdivision (i) by striking

‘‘amphetamine or methamphetamine’’

and inserting ‘‘a controlled substance’’.

Section 2D1.1(b)(6)(B) is amended in

subdivision (i) by striking

‘‘amphetamine or methamphetamine’’

and inserting ‘‘a controlled substance’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 20 by inserting ‘‘Hazardous or

Toxic Substances.—’’before ‘‘Subsection

(b)(5) applies’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in the

heading to Note 21 by striking

‘‘Amphetamine and Methamphetamine’’

and inserting ‘‘Controlled Substances’’.

7982 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 21(A)(iv) by striking

‘‘amphetamine or methamphetamine’’

and inserting ‘‘illicit’’.

The Commentary to § 2D1.1 captioned

‘‘Background’’ is amended by inserting

‘‘, in a broader form,’’ after ‘‘Subsection

(b)(6) implements’’.

Section 2D1.10 is amended by striking

subdivisions (a) and (b) in their entirety

and inserting the following:

‘‘(a) Base Offense Level (Apply the

greater):

(1) 6 plus the offense level from the

Drug Quantity Table in § 2D1.1; or

[Option 2(a): (2) 27.]

[Option 2(b): (2) 27, if the offense

involved the manufacture of

amphetamine or methamphetamine; or

(3) 20, otherwise.]

(b) Specific Offense Characteristic

(1) If the offense created a substantial

risk of harm to the life of a minor or an

incompetent, increase by 3 levels. If the

resulting offense level is less than level

30, increase to level 30.’’

The Commentary to § 2D1.10

captioned ‘‘Application Notes’’ is

amended in the heading to Note 1 by

striking ‘‘Associated with the

Manufacture of Amphetamine and

Methamphetamine’’.

The Commentary to § 2D1.10

captioned ‘‘Application Notes’’ is

amended in Note 1(A)(iv) by striking

‘‘amphetamine or methamphetamine

laboratory’’ and inserting ‘‘illicit’’.

The Commentary to § 2D1.10

captioned ‘‘Background’’ is amended by

striking ‘‘Subsection’’ and inserting

‘‘Subsections (a)(2) and’’; by striking

‘‘implements’’ and inserting

‘‘implement , in a broader form,’’; and

by striking ‘‘Public Law 106–878’’ and

inserting ‘‘Public Law 106–310’’.

Option 3:

Section 2D1.1(b) is amended by

redesignating subdivision (7) as (6); and

by striking subdivisions (5) and (6) in

their entirety and inserting the

following:

‘‘(5) (Apply the greater):

(A) If the offense involved (i) an

unlawful discharge, emission, or release

into the environment of a hazardous or

toxic substance; or (ii) the unlawful

transportation, treatment, storage, or

disposal of a hazardous waste, increase

by 2 levels.

(B) If the offense (i) involved the

manufacture of amphetamine or

methamphetamine; or (ii)(I) involved

the manufacture of a controlled

substance other than amphetamine or

methamphetamine; and (II) created a

substantial risk of harm to human life or

the environment, increase by 3 levels. If

the resulting offense level is less than

level 27, increase to level 27.

(C) If the offense (i) involved the

manufacture of a controlled substance;

and (ii) created a substantial risk of

harm to the life of a minor or an

incompetent, increase by 6 levels. If the

resulting offense level is less than level

30, increase to level 30.’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 20 by inserting ‘‘(A)’’ after

‘‘Subsection (b)(5)’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in the

heading to Note 21 by striking

‘‘Amphetamine and Methamphetamine’’

and inserting ‘‘Controlled Substances’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes is amended in Note

21(A) by striking ‘‘subsection (b)(6)’’

and inserting ‘‘subsections (b)(5)(B) and

(b)(5)(C)’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 21(A)(iv) by striking

‘‘amphetamine or methamphetamine’’

and inserting ‘‘illicit’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 21 subdivision (B) by striking

‘‘(b)(6)’’ and inserting ‘‘(b)(5)’’.

The Commentary to § 2D1.1 captioned

‘‘Background’’ is amended by inserting

‘‘(A)’’ after ‘‘Subsection (b)(5)’’; by

striking ‘‘Subsection (b)(6)’’ and

inserting ‘‘Subsections (b)(5)(B) and

(b)(5)(C)’’; by striking implements’’ and

inserting ‘‘implement, in a broader

form,’’; and by striking ‘‘Public Law

106–878’’ and inserting ‘‘Public Law

106–310’’.

Section 2D1.10(a) is amended in

subdivision (2) by striking ‘‘20’’ and

inserting ‘‘27’’.

Section 2D1.10(b) is amended by

striking subdivision (1) in its entirety

and inserting the following:

‘‘(1) If the offense created a substantial

risk of harm to the life of a minor or an

incompetent, increase by 3 levels. If the

resulting offense level is less than level

30, increase to level 30.’’

The Commentary to 2D1.10 captioned

‘‘Application Notes’’ is amended in the

title to Note 1 by striking ‘‘Associated

with the Manufacture of Amphetamine

and Methamphetamine’’.

The Commentary to 2D1.10 captioned

‘‘Application Notes’’ is amended in

Note 1(A)(iv) by striking ‘‘amphetamine

or methamphetamine’’ and inserting

‘‘illicit’’.

The Commentary to 2D1.10 captioned

‘‘Background’’ is amended by striking

‘‘Subsection’’ and inserting

‘‘Subsections (a)(2) and’’; by striking

‘‘implements’’ and inserting

‘‘implement, in a broader form,’’; and by

striking ‘‘Public Law 106–878’’ and

inserting ‘‘Public Law 106–310’’.

Issue for Comment: The Commission

invites comment regarding whether it

should provide, for controlled

substances other than amphetamine or

methamphetamine, an upward

departure rather than an enhancement

provision if the manufacture of the

controlled substance created a

substantial risk of harm to human life or

the environment.

Proposed Amendment: Mandatory

Restitution for Amphetamine and

Methamphetamine Offenses

8. Synopsis of Proposed Amendment:

This proposed amendment implements

the provision in the Methamphetamine

Anti-Proliferation Act of 2000, section

3613 of Pub. L. 106–310, that amends 21

U.S.C. 853(q) to provide mandatory

restitution for offenses that involve the

manufacture of methamphetamine. The

proposed amendment amends § 5E1.1

(Restitution) to include a reference to 21

U.S.C. § 853(q) in the guideline

provision regarding mandatory

restitution.

Proposed Amendment

Section 5E1.1 is amended in

subsection (a)(1) by inserting ‘‘, or 21

U.S.C. § 853(q)’’ after ‘‘3663A’’.

The Commentary to § 5E1.1 captioned

‘‘Background’’ is amended in the first

paragraph by inserting ‘‘, and 21 U.S.C.

§ 853(q)’’ after ‘‘3663A’’.

Proposed Amendment: Safety Valve

9. Synopsis of Proposed Amendment:

This amendment proposes to delete the

language in § 2D1.1(b)(6) that limits

application of the safety valve to

defendants at offense levels 26 and

greater. The proposed amendment also

deletes commentary that is outdated

because of the operation of § 5C1.2

(Limitation on Applicability on

Statutory Minimum Sentences in

Certain Cases). Conforming changes are

made to § 5C1.2.

Proposed Amendment

Section 2D1.1(b)(6) is amended by

striking ‘‘subdivisions (1)–(5)’’ and

inserting ‘‘subsections (a)(1)–(5)’’; and

by striking ‘‘and the offense level

determined above is level 26 or greater’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended by

striking Note 14 in its entirety; and by

redesignating Notes 15 through 20 as

Notes 14 through 19, respectively.

Section 5C1.2 is amended in the first

paragraph by striking ‘‘In’’ and inserting

‘‘(a) Except as provided in subsection

(b), in’’.

Section 5C1.2 is amended by inserting

after subsection (a), as so designated by

this amendment, the following:

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7983

‘‘(b) In the case of a defendant (1) who

meets the criteria set forth in subsection

(a); and (2) for whom the statutorily

required minimum sentence is at least

five years, the offense level applicable

from Chapters Two (Offense Conduct)

and Three (Adjustments) shall be not

less than level 17.’’.

The Commentary to § 5C1.2 captioned

‘‘Application Notes’’ is amended in

Notes 2 through 7 by striking

‘‘subdivision’’ each place it appears and

inserting ‘‘subsection (a)’’; and by

striking ‘‘subdivisions’’ in Note 3 and

inserting ‘‘subsection (a)’’.

Proposed Amendment: Anhydrous

Ammonia

10. Synopsis of Proposed

Amendment: This proposed amendment

addresses the new offense, at section

423 of the Controlled Substances Act

(21 U.S.C. 864), of stealing or

transporting across state lines

anhydrous ammonia knowing,

intending, or having reasonable cause to

believe that such anhydrous ammonia

will be used to manufacture a controlled

substance. This new offense, created by

the Methamphetamine AntiProliferation Act of 2000, section 3653

of Pub. L. 106–310, carries the statutory

penalties contained in section 403 of the

Controlled Substances Act (21 U.S.C.

843), i.e., not more than fours years’

imprisonment (or not more than eight

years’ imprisonment in the case of

certain prior convictions) or not more

than 10 years’ imprisonment (or not

more than 20 years’ imprisonment in

the case of certain prior convictions) if

the offense involved the manufacture of

methamphetamine.

The proposed amendment references

the new offense to § 2D1.12 (Unlawful

Possession, Manufacture, Distribution,

or Importation of Prohibited Flask or

Equipment; Attempt or Conspiracy).

Reference to this guideline is

appropriate because the new offense is

similar to other offenses already

referenced to the guideline and having

the same penalty structure, such as 21

U.S.C. 843(a)(6), which among other

things makes it unlawful to possess any

chemical, product, or material which

may be used to manufacture a

controlled substance. The proposed

amendment also makes minor, nonsubstantive changes to the guideline in

order to fully reference the new and

existing offenses into the guideline.

Proposed Amendment

Section 2D1.12 is amended in the

heading by inserting ‘‘Transportation,

Exportation,’’ after ‘‘Distribution,’’; by

striking ‘‘or’’ before ‘‘Equipment’’ and

inserting a comma; and by inserting ‘‘,

Chemical, Product, or Material’’ after

‘‘Equipment’’.

Section 2D1.12 is amended in each of

subsections (a)(1), (a)(2), and (b)(1), by

inserting ‘‘flask,’’ after ‘‘prohibited’’;

and by inserting ‘‘, chemical, product, or

material’’ after ‘‘equipment’’.

The Commentary to § 2D1.12

captioned ‘‘Statutory Provisions’’ is

amended by inserting ‘‘§ ’’ before ‘‘843’’;

and by inserting ‘‘, 864’’ after ‘‘(7)’’.

The Commentary to § 2D1.12

captioned ‘‘Application Notes’’ is

amended by striking the text of Note 1

in its entirety and inserting the

following:

‘‘If the offense involved the large-scale

[(A)] manufacture, distribution,

transportation, exportation, or

importation of prohibited flasks,

equipment, chemicals, products, or

material [; or (B) theft of anhydrous

ammonia,] an upward departure may be

warranted.’’.

Appendix A (Statutory Index) is

amended by inserting after the line

referenced to ‘‘21 U.S.C. § 863’’ the

following:

‘‘21 U.S.C. § 864 2D1.12’’.

Issue for Comment: The Commission

invites comment regarding whether the

enhancement at § 2D1.12(b)(1) is

sufficient to account for the seriousness

of attempting or intending to

manufacture methamphetamine through

the use of anhydrous ammonia. Should,

for example, subsection (b)(1) of

§ 2D1.12 provide for an enhancement of

up to [10] levels, or should an

alternative method be provided to

account for the seriousness of using

anhydrous ammonia, such as a cross

reference to § 2D1.11 using a conversion

to methamphetamine if anhydrous

ammonia is involved? Generally, what

is the most appropriate penalty

structure for offenses involving

anhydrous ammonia?

Proposed Amendment: GHB

11. Synopsis of Proposed

Amendment: This proposed amendment

implements the Hillory J. Farias and

Samantha Reid Date-Rape Drug

Prohibition Act of 2000, Pub. L. 106–

172 (the ‘‘Act’’), which provides the

emergency scheduling of gamma

hydroxybutyric acid (‘‘GHB’’) as a

Schedule I controlled substance under

the Controlled Substances Act when the

drug is used illicitly. (There are

approved applications of GHB under the

Federal Food, Drug, and Cosmetic Act,

for which the drug is scheduled in

Schedule III.) The Act also amended

section 401(b)(1)(C) of the Controlled

Substances Act (21 U.S.C. 841(b)(1)(C))

and section 1010(b)(3) of the Controlled

Substances Import and Export Act (21

U.S.C. § 960(b)(3)) to provide penalties

of not more than 20 years for an offense

that involves GHB. Additionally, the

Act added gamma butyrolactone

(‘‘GBL’’) to the list of List I chemicals in

section 401(b)(1)(C) of the Controlled

Substances Act (21 U.S.C. 841(b)(1)(C)).

Under the current structure of the

Drug Quantity Table in § 2D1.1, GHB

and other Schedule I and II depressants,

with statutory maximum terms of

imprisonment of 20 years, are sentenced

identically to Schedule III substances,

which have a five-year statutory

maximum. The guidelines provide a

maximum offense level of level 20 for

these substances, which equates to a

sentencing range of 33 to 44 months for

offenders with minimal or no criminal

history (Criminal History Category I).

The lack of penalty distinctions between

offenses with such divergent statutory

maxima raises proportionality concerns.

Recognizing the need to provide higher

penalties for the more serious offenses

involving Schedule I and II depressants,

the proposed amendment eliminates the

maximum base offense level of level 20

in the Drug Quantity Table of § 2D1.1

for Schedule I and II depressants

(including GHB). The same change is

made with respect to flunitrazepam,

which, for sentencing purposes, is tied

to Schedule I and II depressants.

The proposed amendment also

amends the Chemical Quantity Table in

§ 2D1.11 to include GBL, a precursor for

GHB, as a List I chemical. Offense levels

for GBL were established in the same

fashion as other list I chemicals. The

offense level for a specific quantity of

GHB that can be produced from a given

quantity of GBL, assuming a 50 percent

yield, was determined using the Drug

Quantity Table in § 2D1.1. From this

offense level, six levels were subtracted.

This result identifies the corresponding

offense level in the Chemical Quantity

Table in § 2D1.11.

The proposed amendment also adds

Iodine to the Chemical Quantity Table

in response to a recent classification of

iodine as a List II chemical. Iodine is

used to produce hydrogen iodide which,

in the presence of water, becomes

hydriodic acid, a list I chemical that is

a reagent used in the production of

amphetamine and methamphetamine.

The penalties for Iodine were

established based upon its conversion to

hydriodic acid.

Proposed Amendment

(1) Uncap Schedule I and II Depressants

Section 2D1.1(c)(1) is amended by

striking the period after ‘‘Hashish Oil’’

and inserting a semi-colon; and by

inserting at the end the following:

7984 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

‘‘30,000,000 units or more of

Schedule I or II Depressants; 1,875,000

units or more of Flunitrazepam.’’.

Section 2D1.1(c)(2) is amended by

striking the period after ‘‘Hashish Oil’’

and inserting a semi-colon; and by

inserting at the end the following:

‘‘At least 10,000,000 but less than

30,000,000 units of Schedule I or II

Depressants; At least 625,000 but less

than 1,875,000 units of Flunitrazepam.’’.

Section 2D1.1(c)(3) is amended by

striking the period after ‘‘Hashish Oil’’

and inserting a semi-colon; and by

inserting at the end the following:

‘‘At least 3,000,000 but less than

10,000,000 units of Schedule I or II

Depressants; At least 187,500 but less

than 625,000 units of Flunitrazepam.’’.

Section 2D1.1(c)(4) is amended by

striking the period after ‘‘Hashish Oil’’

and inserting a semi-colon; and by

inserting at the end the following:

‘‘At least 1,000,000 but less than

3,000,000 units of Schedule I or II

Depressants; At least 62,500 but less

than 187,500 units of Flunitrazepam.’’.

Section 2D1.1(c)(5) is amended by

striking the period after ‘‘Hashish Oil’’

and inserting a semi-colon; and by

inserting at the end the following:

‘‘At least 700,000 but less than

1,000,000 units of Schedule I or II

Depressants; At least 43,750 but less

than 62,500 units of Flunitrazepam.’’.

Section 2D1.1(c)(6) is amended by

striking the period after ‘‘Hashish Oil’’

and inserting a semi-colon; and by

inserting at the end the following:

‘‘At least 400,000 but less than

700,000 units of Schedule I or II

Depressants; At least 25,000 but less

than 43,750 units of Flunitrazepam.’’.

Section 2D1.1(c)(7) is amended by

striking the period after ‘‘Hashish Oil’’

and inserting a semi-colon; and by

inserting at the end the following:

‘‘At least 100,000 but less than

400,000 units of Schedule I or II

Depressants; At least 6,250 but less than

25,000 units of Flunitrazepam.’’

Section 2D1.1(c)(8) is amended by

striking the period after ‘‘Hashish Oil’’

and inserting a semi-colon; and by

inserting at the end the following:

‘‘At least 80,000 but less than 100,000

units of Schedule I or II Depressants; At

least 5,000 but less than 6,250 units of

Flunitrazepam.’’.

Section 2D1.1(c)(9) is amended by

striking the period after ‘‘Hashish Oil’’

and inserting a semi-colon; and by

inserting at the end the following:

‘‘At least 60,000 but less than 80,000

units of Schedule I or II Depressants; At

least 3,750 but less than 5,000 units of

Flunitrazepam.’’.

Section 2D1.1(c)(10) is amended in

the line referenced to Schedule I or II

Depressants by striking ‘‘40,000 or

more’’ and inserting ‘‘At least 40,000 but

less than 60,000’’; and in the line

referenced to Flunitrazepam, by striking

‘‘2,500 or more’’ and inserting ‘‘At least

2,500 but less than 3,750’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 10 in the Drug Equivalency Tables

in the subdivision captioned

‘‘Flunitrazepam * * * ’’ in the heading

by striking ‘‘ * * * ’’ after

‘‘Flunitrazepam’’; and by striking the

following:

‘‘ * * * Provided, that the combined

equivalent weight of flunitrazepam, all

Schedule I or II depressants, Schedule

III substances, Schedule IV substances,

and Schedule V substances shall not

exceed 99.99 kilograms of marihuana.’’.

The Commentary to § 2D1.1 captioned

‘‘Application Notes’’ is amended in

Note 10 in the Drug Equivalency Tables

in the subdivision captioned ‘‘Schedule

I or II Depressants * * * ’’ in the

heading by striking ‘‘* * * ’’ after

‘‘Schedule I or II Depressants’’; and by

striking the following:

‘‘ * * * Provided, that the combined

equivalent weight of all Schedule I or II

depressants, Schedule III substances,

Schedule IV substances (except

flunitrazepam), and Schedule V

substances shall not exceed 59.99

kilograms of marihuana.’’.

(2) Adding GBL and Iodine to the

Chemical Quantity Table in § 2D1.11

Section 2D1.11(d)(1) is amended by

inserting at the end the following:

‘‘10,000 KG or more of Gammabutyrolactone.’’.

Section 2D1.11(d)(2) is amended in

the subdivision captioned ‘‘List I

Chemicals’’ by inserting at the end the

following:

‘‘At least 3,000 KG but less than

10,000 KG of Gamma-butyrolactone;’’;

and in the subdivision captioned

‘‘List II Chemicals’’ by striking the

period after ‘‘Toluene’’ and inserting a

semi-colon; and by inserting at the end

the following:

‘‘7.52 KG or more of Iodine.’’.

Section 2D1.11(d)(3) is amended in

the subdivision captioned ‘‘List I

Chemicals’’ by inserting at the end the

following:

‘‘At least 1,000 KG but less than 3,000

KG of Gamma-butyrolactone;’’;

and in the subdivision captioned

‘‘List II Chemicals’’ by striking the

period after ‘‘Toluene’’ and inserting a

semi-colon; and by inserting at the end

the following:

‘‘At least 2.51 KG but less than 7.52

KG of Iodine.’’.

Section 2D1.11(d)(4) is amended in

the subdivision captioned ‘‘List I

Chemicals’’ by inserting at the end the

following:

‘‘At least 700 KG but less than 1,000

KG of Gamma-butyrolactone;’’;

and in the subdivision captioned

‘‘List II Chemicals’’ by striking the

period after ‘‘Toluene’’ and inserting a

semi-colon; and by inserting at the end

the following:

‘‘At least 1.76 KG but less than 2.51

KG of Iodine.’’.

Section 2D1.11(d)(5) is amended in

the subdivision captioned ‘‘List I

Chemicals’’ by inserting at the end the

following:

‘‘At least 400 KG but less than 700 KG

of Gamma-butyrolactone;’’;

and in the subdivision captioned

‘‘List II Chemicals’’ by striking the

period after ‘‘Toluene’’ and inserting a

semi-colon; and by inserting at the end

the following:

‘‘At least 1 KG but less than 1.76 KG

of Iodine.’’.

Section 2D1.11(d)(6) is amended in

the subdivision captioned ‘‘List I

Chemicals’’ by inserting at the end the

following:

‘‘At least 100 KG but less than 400 KG

of Gamma-butyrolactone;’’;

and in the subdivision captioned

‘‘List II Chemicals’’ by striking the

period after ‘‘Toluene’’ and inserting a

semi-colon; and by inserting at the end

the following:

‘‘At least 250.8 G but less than 1 KG

of Iodine.’’.

Section 2D1.11(d)(7) is amended in

the subdivision captioned ‘‘List I

Chemicals’’ by inserting at the end the

following:

‘‘At least 80 KG but less than 100 KG

of Gamma-butyrolactone;’’;

and in the subdivision captioned

‘‘List II Chemicals’’ by striking the

period after ‘‘Toluene’’ and inserting a

semi-colon; and by inserting at the end

the following:

‘‘At least 200.64 G but less than 250.8

G of Iodine.’’.

Section 2D1.11(d)(8) is amended in

the subdivision captioned ‘‘List I

Chemicals’’ by inserting at the end the

following:

‘‘At least 60 KG but less than 80 KG

of Gamma-butyrolactone;’’;

and in the subdivision captioned

‘‘List II Chemicals’’ by striking the

period after ‘‘Toluene’’ and inserting a

semi-colon; and by inserting at the end

the following:

‘‘At least 150.48 G but less than

200.64 KG of Iodine.’’.

Section 2D1.11(d)(9) is amended in

the subdivision captioned ‘‘List I

Chemicals’’ by inserting at the end the

following:

‘‘At least 40 KG but less than 60 KG

of Gamma-butyrolactone;’’;

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7985

and in the subdivision captioned

‘‘List II Chemicals’’ by striking the

period after ‘‘Toluene’’ and inserting a

semi-colon; and by inserting at the end

the following:

‘‘At least 100.32 G but less than

150.48 G of Iodine.’’.

Section 2D1.11(d)(10) is amended in

the subdivision captioned ‘‘List I

Chemicals’’ by inserting at the end the

following:

‘‘Less than 40 KG of Gammabutyrolactone;’’;

and in the subdivision captioned

‘‘List II Chemicals’’ by striking the

period after ‘‘Toluene’’ and inserting a

semi-colon; and by inserting at the end

the following:

‘‘Less than 100.32 G of Iodine.’’.

Proposed Amendment: Economic Crime

Package

12. Synopsis of Proposed

Amendment: The Economic Crime

Package consists of six parts. Part A is

a proposal to consolidate the theft,

property destruction and fraud

guidelines. Part B contains three options

for the loss table for the consolidated

guideline and two options for a revised

loss table in § 2T4.1 (Tax Table). Part C

contains two proposals to amend the

definition of loss for the consolidated

guideline. Part D proposes necessary

changes to several guidelines which

refer to the loss tables in either § 2B1.1

(Larceny, Embezzlement, and Other

Forms of Theft) or § 2F1.1 (Fraud and

Deceit) if the Commission were to adopt

one of the proposed new loss tables.

Part E contains the technical and

conforming amendments to the

guidelines that would be necessary as a

result of the theft and fraud

consolidation. Part F contains a

proposal to resolve a circuit split

regarding the computation of tax loss in

§ 2T1.1.

Part A. Consolidation of Theft, Property

Destruction and Fraud

Synopsis of Proposed Amendment:

This amendment consolidates the three

guidelines covering theft (§ 2B1.1),

property destruction (§ 2B1.3), and

fraud (§ 2F1.1). Consolidation of these

guidelines is proposed in response to

concerns raised by probation officers,

judges, and practitioners over several

years. The issues were among those

discussed during Commission public

hearings in 1997 and 1998 on

difficulties posed by having different

commentary in the theft and fraud

guidelines applicable to the calculation

and definition of loss and related issues.

Commentators have also noted that

although theft and fraud offenses are

conceptually similar, differences in

guideline structure can lead to disparate

penalty levels among similar cases,

depending on how the offense is

charged, and the court’s choice of the

applicable guideline pursuant to

§ 1B1.2.

Bracketed place holders are indicated

for the loss table (see Part B), definition

of loss (see Part C), and the options

regarding two circuit conflicts: Tax loss

(see Part F) and new commentary

regarding the application of subsection

(b)(3) regarding a ‘‘person in the

business of receiving and selling

receiving stolen property,’’ and a

scholarship fraud enhancement and

accompanying application note. In the

event that the Commission does not

promulgate the consolidation proposal,

these bracketed options can be

promulgated separately.

Base Offense Level: The proposal calls

for a base offense level of level 6. The

current base offense level for fraud

offenses is level 6; the base offense level

for theft and property destruction

offenses currently is level 4. Starting

with the base offense level 6, the

proposed loss table for the consolidated

guideline envisions two-level

increments for increasing loss amounts

beginning at $5,000. Currently the loss

table for theft offenses provides onelevel enhancements when loss exceeds

$100, $1,000, $2,000, and $5,000,

respectively, so that a theft offense

involving more than $2,000 in loss

results in an offense level of level 7,

with the possibility of an additional

increase for more-than-minimal

planning. Under the proposed

consolidated loss table, a theft offense

involving more than $2,000 (but less

than $5,000) would receive the base

offense level of level 6, with no possible

increase for more-than-minimal

planning.

In contrast, under the proposed table,

a fraud offense involving the same

amount of loss would start with the

same base offense level of level 6 but

would receive no additional increase

based on the loss amount. Under the

current fraud table, this offense would

result in an offense level of level 7 for

loss because the current fraud loss table

provides a one-level increase for loss

amounts in excess of $2,000 (but less

than $5,000).

More than Minimal Planning: Section

2F1.1(b)(2) currently provides a twolevel increase if the offense involved (A)

more than minimal planning, or (B) a

scheme to defraud more than one

victim. The proposal deletes this

enhancement from the consolidated

guideline. The more than minimal

planning enhancement is deleted due to

the potential overlap between this

enhancement and the sophisticated

means enhancement. The scheme to

defraud more than one victim

enhancement is deleted for two reasons:

(1) If the adjustment were retained

unmodified in a consolidated guideline,

it would apply to cases currently

sentenced under § 2B1.1 where it is not

currently applicable; and (2) in its

current form it might be hard to justify

providing a two-level increase in every

case in which there is more-than-one

victim, particularly in the face of the

new Chapter Three adjustment in the

vulnerable victim guideline (§ 3A1.1)

that provides (only) a two-level increase

if the offense involved ‘‘a large number

of vulnerable victims.’’

As an alternative to the scheme to

defraud more than one victim

enhancement, this amendment provides

an enhancement based on the number of

victims, to provide additional

punishment for offenses involving

multiple victims. The victim table

proposes building in the current ‘‘massmarketing’’ enhancement as an

alternative way of triggering the twolevel increase provided if there were

more than 4 and less than 50 victims.

The amendment proposes that if the

proposed victim table is adopted, and a

victim enhancement is applicable in a

given case, then the enhancement under

3A1.1(b)(2) for ‘‘a large number of

vulnerable victims’’ could not also

apply in that case.

Theft of Undelivered U.S. Mail: The

current ‘‘floor’’ offense level of level 6

for the theft of undelivered United

States mail is proposed to be deleted

because the proposal raises the base

offense level from level 4 to 6 for such

offenses, making the floor unnecessary.

However, if the Commission adopts the

enhancement providing for a two-level

reduction if loss is less than $2,000, it

might be necessary to retain this floor of

level 6.

In the Business of Receiving and

Selling Stolen Property: Section

2B1.1(b)(4)(B) provides a 2-level

enhancement if the offense involved

receiving stolen property and the

defendant was in the business of

receiving and selling stolen property.

The proposed amendment addresses an

issue that has arisen in case law

regarding what conduct qualifies a

defendant for the 4-level enhancement.

In determining the meaning of ‘‘in the

business of’’, three circuits apply what

has been coined the ‘‘fence test’’ in

which the court must consider (1) if the

stolen property was bought and sold,

and (2) to what extent the stolen

property transactions encouraged others

to commit property crimes. Three other

circuits have adopted the ‘‘totality of the

7986 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

circumstances test’’ that focuses on the

‘‘regularity and sophistication’’ of the

defendant’s operation. Though the

factors considered by all of these

circuits are similar, the approaches are

different.

The fence test involves making an

ultimate determination of whether (1)

the stolen property was bought and

sold, and (2) the stolen property

transactions encouraged others to

commit property crimes. In making this

determination, the court considers

factors such as the regularity of the

defendant’s operation, the volume of the

business, the quick turnover of the

stolen items, the value of the stolen

items, the sophistication of the

defendant’s operation, any use of a

legitimate business to facilitate the

turnover of the stolen items, the

defendant’s connections with thieves

and purchasers of the stolen items, and

the use of technology and

communications.

The totality of the circumstances test

involves consideration of the

circumstances in each case with

particular emphasis on the regularity

and sophistication of the defendant’s

operation, looking at such factors as the

amount of income generated through

fencing activities, the value of the

property handled, the defendant’s past

activities, the defendant’s demonstrated

interest in continuing or expanding the

operation, the use of technology and

communication, and the defendant’s

connections with thieves and

purchasers of stolen property.

This amendment adopts the totality of

the circumstances test, basing

application of the enhancement on the

circumstances surrounding the

defendant and his business as opposed

to the effect the fencing operation has in

encouraging others to commit crimes.

College Scholarship Fraud

Subsection (b)(9)(D) implements the

the directive in section 3 of the College

Scholarship Fraud Prevention Act of

1999, Pub. L. 106–420. The directive

requires the Commission to amend the

guidelines:

* * * in order to provide for enhanced

penalties for any offense involving fraud or

misrepresentation in connection with the

obtaining or providing of, or the furnishing

of information to a consumer on, any

scholarship, grant, loan, tuition, discount,

award, or other financial assistance for

purposes of financing an education at an

institution of higher education, such that

those penalties are comparable to the base

offense level for misrepresentation that the

defendant was acting on behalf of a

charitable, educational, religious, or political

organization, or a government agency.

The amendment adds an additional

alternative enhancement that applies if

the offense involves a misrepresentation

to a consumer in connection with

obtaining, providing, or furnishing

financial assistance for an institution of

higher education. This proposed

enhancement is targeted at the provider

of the financial assistance or scholarship

services, not the individual applicant

for such assistance or scholarship,

consistent with the intent of the

legislation.

Risk of Bodily Injury Enhancement:

The proposal provides for two

substantive changes with respect to the

enhancement involving conscious or

reckless risk of serious bodily injury.

First, it increases the ‘‘floor’’ offense

level from level 13 to level 14. Second,

it inserts ‘‘death’’ before the term ‘‘or

serious bodily injury’’ because, as a

practical matter, a risk of serious bodily

injury is likely also to entail a risk of

death. Including ‘‘of death’’ also will

provide consistency throughout the

Guidelines Manual. Currently, ‘‘risk of

death or serious bodily injury’’ appears

in a number of other guidelines as either

an alternative base offense level,

specific offense characteristic, or invited

upward departure (see, e.g., § 2A2.2

comment (n.3); § 2K1.4(a)(1)(2);

§ 2Q1.4(b)(1)). The fraud guideline is the

only guideline in which risk of serious

bodily injury appears as a sentencing

factor without a reference to ‘‘risk of

death’’.

This enhancement stems from a 1988

congressional directive in which the

Commission was instructed to amend

the fraud guideline to provide an

appropriate enhancement for a fraud

offense that creates a conscious or

reckless risk of serious bodily injury.

The Commission was further instructed

to consider the appropriateness of a

minimum enhancement of two offense

levels for this conduct. The legislation

did not require a ‘‘floor’’ offense level.

The proposal increases the ‘‘floor’’

from level 13 to level 14 to promote

proportionality between this and other

guidelines covering similar conduct.

Within the current theft and fraud

guidelines, there are three specific

offense characteristics that have a higher

floor offense level than the current risk

of bodily injury enhancement: (1) ‘‘Chop

shops’’: level 14; (2) jeopardizing the

solvency of a financial institution: level

24; and (3) personally receiving more

than $1 million from a financial

institution: level 24 (congressionally

directed minimum).

Other conceptually similar offense

conduct under various guidelines is

graded as follows:

(1) Reckless voluntary manslaughter

(§ 2A1.4): level 14

(2) Operating a common carrier under

influence of drugs or alcohol, no death

or serious bodily injury resulting

(§ 2D2.3): level 13

(3) Arson creating a substantial risk of

death or serious bodily injury (§ 2K1.4):

level 20

(4) Immigration smuggling offense

creating a substantial risk of death or

serious bodily injury (§ 2L1.1): 2-level

enhancement, ‘‘floor’’ of level 18

(5) Environmental offenses resulting

in risk of death or serious bodily injury

(§§ 2Q1.1, 2Q1.2, 2Q1.3, 2Q1.4): Offense

level varies from level 17 to level 24.

Gross Receipts Enhancement: The

proposed amendment presents two

options for modifying this

enhancement, which currently provides

a 4-level increase and a floor offense

level of level 24 for a defendant who

personally derives more than $1 million

in gross receipts from an offense that

affected a financial institution.

The gross receipts enhancement

derives from a 1990 congressional

directive requiring a minimum offense

level of level 24 if the defendant derived

more than $1 million in gross receipts

from certain offenses that affected

financial institutions. The Commission

had received and implemented a related

directive the previous year requiring

that the guidelines provide a

‘‘substantial period of incarceration’’ for

certain specific offenses that

‘‘substantially jeopardize the safety and

soundness of a federally insured

financial institution.’’ In each case, the

Commission constructed an

enhancement that was considerably

broader and more severe than the

directive required. In part, this was the

Commission’s way of responding to the

increases in statutory maximum

penalties for financial institution

offenses that Congress enacted in 1989

and 1990. The Commission had

modestly increased the penalties for all

fraud offenses with substantial

monetary losses in 1989. Rather than

increase the loss table again, or adopt a

generally applicable enhancement for

fraud against financial institutions, the

Commission elected to use the two

congressionally directed enhancements

as mechanisms for ensuring more

stringent penalties for the more severe

forms of those offenses.

Option 1 deletes the 4-level increase

for deriving more than $1 million in

gross receipts from the offense but

retains the ‘‘floor’’ offense level of level

24 for such conduct (in order to retain

compliance with the congressional

directive). The 4-level increase is

deleted under the assumption that a loss

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7987

table will be adopted that builds in

increases for relatively high dollar

losses; the deletion would prevent

double-counting for the fact of a high

dollar loss. Option 2 retains the current

floor offense level but reduces the 4-

level enhancement to 2 levels.

Sentencing Data: Due to the structure

of this enhancement and the

Commission’s data collection methods it

is impossible to determine which

offenders received increases for

jeopardizing a financial institution and

which offenders received increases for

gross receipts in excess of $1,000,000.

Nevertheless, 33 fraud offenders (0.5 %)

received an increase under this

enhancement.

Additional Cross References

(A) This proposal adds a more

generally applicable cross reference that

would apply whenever a broadly

applicable fraud statute is used to reach

conduct that is more specifically

addressed in another Chapter Two

guideline [if the resulting offense level

is greater].

Currently, Application Note 14 in the

fraud guideline instructs the user to

move to another, more appropriate

Chapter Two guideline under

circumstances in which: (1) The

defendant is convicted of a broadly

applicable fraud statue (e.g., 18 U.S.C.

§ 1001), and (2) the convicted conduct is

more appropriately covered by another

Chapter Two guideline specifically

tailored to that conduct. In essence, this

note is not a cross reference, but rather

a reminder of the principles enunciated

in § 1B1.2 regarding application of the

guideline most appropriate for the

convicted conduct. Moreover, unlike the

more typical cross reference, under this

instruction the user locates and applies

the more appropriate guideline, even if

it yields an offense level lower than

would have been obtained under the

fraud guideline.

Experience over the years

demonstrates that this application note

is not well known or understood, and

hence, not applied consistently. One

way of possibly addressing these

problems would be to convert the

application note into a cross reference.

The more highly visible approach of

incorporating the instruction directly

into the guideline should ensure more

consistent application, without

changing the basic policy of using the

cross reference to move to the guideline

most appropriate for the conduct of

which the defendant was convicted.

Proposed Amendment (Part A)

Chapter Two, Part F, is amended in

the heading by striking ‘‘—Offenses

Involving Fraud or Deceit’’; and by

striking §§ 2F1.1 and 2F1.2 in their

entirety.

Chapter Two is amended by striking

the heading to Part B; by striking the

heading to Subpart 1; by striking the

Introductory Commentary to such

subpart; and by striking §§ 2B1.1 and

2B1.3 in their entirety and inserting 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 obligation 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.

§ 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

[$2000][$5,000], increase the offense

level as follows:

[Loss Table Options—See Part B of

this amendment]

(2) If the offense—

(A) (i) involved more than 4, but less

than 50, victims; or (ii) was committed

through mass-marketing, increase by 2

levels; or

(B) involved 50 or more victims,

increase by 4 levels.

(3) If the theft was from the person of

another, increase by 2 levels.

(4) If the offense involved receiving

stolen property, and the defendant was

a person in the business of receiving

and selling stolen property, increase by

2 levels.

(5) If the offense involved

misappropriation of a trade secret and

the defendant knew or intended that the

offense would benefit any foreign

government, foreign instrumentality, or

foreign agent, increase by 2 levels.

(6) If the offense involved theft to,

damage of, or destruction of property

from a national cemetery, increase by 2

levels.

[(7) If the loss was $2,000 or less,

decrease by 2 levels.]

(8) If the offense involved (A) a

misrepresentation that the defendant

was acting on behalf of a charitable,

educational, religious or political

organization, or a government agency;

(B) a misrepresentation or other

fraudulent action during the course of a

bankruptcy proceeding; (C) a violation

of any prior, specific judicial or

administrative order, injunction, decree,

or process not addressed elsewhere in

the guidelines [; or (D) a

misrepresentation to a consumer in

connection with obtaining, providing, or

furnishing financial assistance for an

institution of higher education, increase

by 2 levels]. If the resulting offense level

is less than level 10, increase to level 10.

(9) 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.

(10) If the offense involved—

(A) the possession or use of any

device-making equipment;

(B) the production or trafficking of

any unauthorized access device or

counterfeit access device; or

(C) (i) the unauthorized transfer or use

of any means of identification

unlawfully to produce or obtain any

other means of identification; or (ii) the

possession of 5 or more means of

identification that unlawfully were

produced from another means of

identification or obtained by the use of

another means of identification,

increase by 2 levels. If the resulting

offense level is less than level 12,

increase to level 12.

(11) If the offense involved an

organized scheme to steal vehicles or

vehicle parts, and the offense level is

less than level 14, increase to level 14.

(12) 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.

(13) 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.

7988 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

[Option 1: (14) 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 is less than

level 24, increase to level 24.]

[Option 2: (14) If 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.]

(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 § 2D1.1 (Unlawful

Manufacturing, Importing, Exporting, or

Trafficking; Attempt or Conspiracy),

§ 2D2.1 (Unlawful Possession; Attempt

or Conspiracy), § 2K1.3 (Unlawful

Receipt, Possession, or Transportation

of Explosive Materials; Prohibited

Transactions Involving Explosive

Materials), or § 2K2.1 (Unlawful

Receipt, Possession, or Transportation

of Firearms or Ammunition; Prohibited

Transactions Involving Firearms or

Ammunition), as appropriate, if the

resulting offense level is greater than

that determined above.

(2) If the offense involved arson, or

property damage by use of explosives,

apply § 2K1.4 (Arson; Property Damage

by Use of Explosives), if the resulting

offense level is greater than that

determined above.

(3) If (A) none of subdivisions (1) or

(2) 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. § 1001, § 1341,

§ 1342, or § 1343); and (C) the count of

conviction establishes an offense more

aptly covered by another guideline in

Chapter Two, apply that other guideline

[if the resulting offense level is greater].

(d) Special Instruction

(1) If the defendant is convicted under

18 U.S.C. § 1030(a)(4) or (a)(5) the

minimum guideline sentence,

notwithstanding any other adjustment,

shall be six months’ imprisonment.

Commentary

Statutory Provisions: 7 U.S.C. §§ 6, 6b,

6c, 6h, 6o, 13, 23; 15 U.S.C. §§ 50, 77e,

77q, 77x, 78j, 78ff, 80b-6, 1644; 18

U.S.C. §§ 225, 285–289, 471–473, 500,

510, 553(a)(1), 641, 656, 657, 659, 662,

664, 1001–1008, 1010–1014, 1016–1022,

1025, 1026, 1028, 1029, 1030(a)(4),

1030(a)(5), 1031, 1341–1344, 1361,

1363, 1702, 1703 (if vandalism or

malicious mischief, including

destruction of mail is involved), 1708,

1831, 1832, 2113(b), 2312–2317; 29

U.S.C. § 501(c). For additional statutory

provision(s), see Appendix A (Statutory

Index).

Application Notes:

1. For purposes of this guideline.—

‘Financial institution’’ as used in this

guideline, is defined to include any

institution described in 18 U.S.C. §§ 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.

‘Firearm’ and ‘‘destructive device’’ are

defined in the Commentary to § 1B1.1

(Application Instructions).

‘Foreign instrumentality’ and ‘‘foreign

agent’’ are defined in 18 U.S.C. § 1839(1)

and (2), respectively.

‘From the person of another’ refers to

property, taken without the use of force,

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.

‘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,

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.

‘Trade secret’ is defined in 18 U.S.C.

§ 1839(3).

2. [Definition of Loss—See Part C of

this amendment]

3. Controlled substances should be

valued at their estimated street value.

[4. Enhancement for Business of

Receiving and Selling Stolen

Property.—

(A) In General.—The court shall

consider the totality of the

circumstances to determine whether a

defendant was in the business of

receiving and selling stolen property for

purposes of subsection (b)(4).

(B) Factors to Consider.—The

following is a non-inclusive list of

factors that the court may consider in

determining whether the defendant was

in the business of receiving and selling

stolen property for purposes of

subsection (b)(4):

(i) The regularity or sophistication of

the defendant’s activities;

(ii) The value and size of the

inventory of stolen property maintained

by the defendant;

(iii) The extent to which the

defendant’s activities encouraged or

facilitated other crimes; or

(iv) The defendant’s past activities

involving stolen property.]

5. Application of Subsection (b)(8).—

(A) In General.—The adjustments in

subsection (b)(8) are alternative rather

than cumulative. If, in a particular case,

however, more than one of the

enumerated factors applied, an upward

departure may be warranted.

(B) Misrepresentation Defendant Was

Acting On Behalf of Charitable

Institution.—Subsection (b)(8)(A)

provides an adjustment for a

misrepresentation that the defendant

was acting on behalf of a charitable,

educational, religious or political

organization, or a government agency.

Examples of conduct to which this

factor applies would include a group of

defendants who solicit contributions to

a non-existent famine relief organization

by mail, a defendant who diverts

donations for a religiously affiliated

school by telephone solicitations to

church members in which the defendant

falsely claims to be a fund-raiser for the

school, or a defendant who poses as a

federal collection agent in order to

collect a delinquent student loan.

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7989

(C) Fraud in Contravention of Prior

Judicial Order.—Subsection (b)(8)(C)

provides an enhancement if the

defendant commits a fraud in

contravention of a prior, official judicial

or administrative warning, in the form

of an order, injunction, decree, or

process, to take or not to take a specified

action. A defendant who does not

comply with such a prior, official

judicial or administrative warning

demonstrates aggravated criminal intent

and deserves additional punishment. If

it is established that an entity the

defendant controlled was a party to the

prior proceeding that resulted in the

official judicial or administrative action,

and the defendant had knowledge of

that prior decree or order, this

enhancement applies even if the

defendant was not a specifically named

party in that prior case. For example, a

defendant whose business previously

was enjoined from selling a dangerous

product, but who nonetheless engaged

in fraudulent conduct to sell the

product, is subject to this enhancement.

This enhancement does not apply if the

same conduct resulted in an

enhancement pursuant to a provision

found elsewhere in the guidelines (e.g.,

a violation of a condition of release

addressed in § 2J1.7 (Commission of

Offense While on Release) or a violation

of probation addressed in § 4A1.1

(Criminal History Category)).

(D) College Scholarship Fraud.—

For the purposes of subsection

(b)(8)(D)—

‘Financial assistance’ means any

scholarship, grant, loan, tuition,

discount, award, or other financial

assistance for the purposes of financing

an education.

‘Institution of higher education’ has

the meaning given that term in section

101 of the Higher Education Act of 1954

(20 U.S.C. § 1001).]

(E) Non-Applicability of

Enhancement.—If the conduct that

forms the basis for an enhancement

under (b)(8)(B) or (C) is the only

conduct that forms the basis for an

adjustment under § 3C1.1 (Obstruction

of Justice), do not apply an adjustment

under § 3C1.1.

6. Application of Subsection (b)(9).—

(A) Definition of United States.—

‘United States’ means each of the 50

states, the District of Columbia, the

Commonwealth of Puerto Rico, the

United States Virgin Islands, Guam, the

Northern Mariana Islands, and

American Samoa.

(B) Sophisticated Means

Enhancement.—For purposes of

subsection (b)(9)(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.

(C) Non-Applicability of

Enhancement.—If the conduct that

forms the basis for an enhancement

under subsection (b)(9) is the only

conduct that forms the basis for an

adjustment under § 3C1.1 (Obstruction

of Justice), do not apply an adjustment

under § 3C1.1.

7. Application of Subsection (b)(10).—

(A) Definitions.—

‘Counterfeit access device’ (A) has the

meaning given that term in 18 U.S.C.

§ 1029(e)(2); and (B) also includes a

telecommunications instrument that has

been modified or altered to obtain

unauthorized use of

telecommunications service.

‘Telecommunications service’ has the

meaning given that term in 18 U.S.C.

§ 1029(e)(9).

‘Device-making equipment’ (A) has

the meaning given that term in 18 U.S.C.

§ 1029(e)(6); and (B) also includes (i)

any hardware or software that has been

configured as described in 18 U.S.C.

§ 1029(a)(9); and (ii) a scanning receiver

referred to in 18 U.S.C. § 1029(a)(8).

‘Scanning receiver’ has the meaning

given that term in 18 U.S.C. § 1029(e)(8).

‘Means of identification’ has the

meaning given that term in 18 U.S.C.

§ 1028(d)(3), except that such means of

identification shall be of an actual (i.e.,

not fictitious) individual other than the

defendant or a person for whose

conduct the defendant is accountable

under § 1B1.3 (Relevant Conduct).

‘Produce’ includes manufacture,

design, alter, authenticate, duplicate, or

assemble. ‘Production’ includes

manufacture, design, alteration,

authentication, duplication, or

assembly.

‘Unauthorized access device’ has the

meaning given that term in 18 U.S.C.

§ 1029(e)(3).

(B) Subsection (b)(10)(C)(i).—This

subsection applies in a case in which a

means of identification of an individual

other than the defendant (or a person for

whose conduct the defendant is

accountable under § 1B1.3 (Relevant

Conduct)) is used without that

individual’s authorization unlawfully to

produce or obtain another means of

identification.

(C) Examples of Conduct Under

(b)(10)(C)(i).—Examples of conduct to

which this subsection should apply are

as follows:

(i) A defendant obtains an

individual’s name and social security

number from a source (e.g., from a piece

of mail taken from the individual’s

mailbox) and obtains a bank loan in that

individual’s name. In this example, the

account number of the bank loan is the

other means of identification that has

been obtained unlawfully.

(ii) A defendant obtains an

individual’s name and address from a

source (e.g., from a driver’s license in a

stolen wallet) and applies for, obtains,

and subsequently uses a credit card in

that individual’s name. In this example,

the credit card is the other means of

identification that has been obtained

unlawfully.

(D) Nonapplicability of subsection

(b)(10)(C)(i):—Examples of conduct to

which this subsection should not apply

are as follows:

(i) A defendant uses a credit card from

a stolen wallet only to make a purchase.

In such a case, the defendant has not

used the stolen credit card to obtain

another means of identification.

(ii) A defendant forges another

individual’s signature to cash a stolen

check. Forging another individual’s

signature is not producing another

means of identification.

(E) Subsection (b)(10)(C)(ii).—This

subsection applies in any case in which

the offense involved the possession of 5

or more means of identification that

unlawfully were produced or obtained,

regardless of the number of individuals

in whose name (or other identifying

information) the means of identification

were so produced or so obtained.

(F) Upward Departure.—In a case

involving unlawfully produced or

unlawfully obtained means of

identification, an upward departure may

be warranted if the offense level does

not adequately address the seriousness

of the offense. Examples may include

the following:

(i) The offense caused substantial

harm to the victim’s reputation or credit

record, or the victim suffered a

substantial inconvenience related to

repairing the victim’s reputation or a

damaged credit record.

(ii) An individual whose means of

identification the defendant used to

obtain unlawful means of identification

is erroneously arrested or denied a job

because an arrest record has been made

in the individual’s name.

(iii)The defendant produced or

obtained numerous means of

identification with respect to one

7990 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

individual and essentially assumed that

individual’s identity.

(G) Counterfeit Access Devices.—In a

case involving any counterfeit access

device or unauthorized access device,

loss includes any unauthorized charges

made with the counterfeit access device

or unauthorized access device. In any

such case, loss shall be not less than

$500 per access device. However, if the

unauthorized access device is a means

of telecommunications access that

identifies a specific telecommunications

instrument or telecommunications

account (including an electronic serial

number/mobile identification number

(ESN/MIN) pair), and that means was

only possessed, and not used, during

the commission of the offense, loss shall

be not less than $100 per unused means.

8. Chop Shop Enhancement.—For

purposes of (b)(11), a minimum offense

level 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. Substantially Jeopardized the

Safety and Soundness of a Financial

Institution.—For the purposes of

subsection (b)(13), 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 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.

10. Application of Subsection of

(b)(14).—

In General.—For the purposes of

(b)(14), 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 From the Offense.—

‘Gross receipts from the offense’

includes all property, real or personal,

tangible or intangible, which is obtained

directly or indirectly as a result of such

offense. See 18 U.S.C. § 982(a)(4).

11. Cross References.—

(A) General Fraud Statutes.—

Subsection (c)(3) provides a cross

reference to another Chapter Two

guideline in cases in which the

defendant is convicted of a general

fraud statute, and the count of

conviction (or a stipulation as described

in § 1B1.2(a)) establishes an offense

more aptly covered by another guideline

[and the resulting offense level is

greater]. Sometimes, offenses involving

fraudulent statements are prosecuted

under 18 U.S.C. § 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 § 2S1.3

would be more apt, and false statements

to a customs officer, for which § 2T3.1

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.

(B) Identification Documents.—

Offenses involving identification

documents, false identification

documents, and means of identification,

in violation of 18 U.S.C. § 1028, also are

covered by this guideline. If the primary

purpose of the offense was to violate, or

assist another to violate, the law

pertaining to naturalization, citizenship,

or legal resident status, apply § 2L2.1

(Trafficking in a Document Relating to

Naturalization) or § 2L2.2 (Fraudulently

Acquiring Documents Relating to

Naturalization), as appropriate, rather

than § 2F1.1.

12. Continuing Financial Crimes

Enterprise.—If the defendant is

convicted under 18 U.S.C. § 225

(relating to a continuing financial

crimes enterprise), the offense level is

that applicable to the underlying series

of offenses comprising the ‘continuing

financial crimes enterprise.’

13. Upward Departure in Cases

Involving Theft of Information from a

Protected Computer.—In cases

involving theft of information from a

‘protected computer’, as defined in 18

U.S.C. § 1030(e)(2)(A) or (B), an upward

departure may be warranted where the

defendant sought the stolen information

to further a broader criminal purpose.

14. Multiple Count Indictments.—

Some fraudulent schemes may result in

multiple-count indictments, depending

on the technical elements of the offense.

The cumulative loss produced by a

common scheme or course of conduct

should be used in determining the

offense level, regardless of the number

of counts of conviction. See Chapter

Three, Part D (Multiple Counts).

15. Upward Departure in Cases

Involving Access Devices.—Offenses

involving access devices, in violation of

18 U.S.C. §§ 1028 and 1029, are also

covered by this guideline. In such a

case, an upward departure may be

warranted where the actual loss does

not adequately reflect the seriousness of

the conduct.

16. Vulnerable Victims.—

(A) In General.—Except as provided

in subdivision (b)(2)(B), if the fraud

exploited vulnerable victims, an

enhancement shall apply. See § 3A1.1

(Hate Crime Motivation or Vulnerable

Victim).

(B) Nonapplicability of § 3A1.1(b)(2)

in Certain Cases.—If subsection

(b)(2)[(B)] applies, an enhancement

under § 3A1.1(b)(2) shall not apply.

Background: This guideline covers

offenses involving theft, stolen property,

property damage or destruction, fraud,

forgery, and counterfeiting (other than

offenses involving altered or counterfeit

bearer obligations of the United 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.

[Loss Background Commentary—See

Part C]

Theft from the person of another, such

as pickpocketing or non-forcible pursesnatching, 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 § 2B3.1 (Robbery).

A minimum offense level of level 14

is provided for offenses involving an

organized scheme to steal vehicles or

vehicle parts. Typically, the scope of

such activity is substantial, but the

value of the property may be

particularly difficult to ascertain in

individual cases because the stolen

property is rapidly resold or otherwise

disposed of in the course of the offense.

Therefore, the specific offense

characteristic of ‘organized scheme’ is

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7991

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 selfinterest does not mitigate the

seriousness of fraudulent conduct;

rather, defendants who exploit victims’

charitable impulses or trust in

government create particular social

harm. In a similar vein, a defendant who

has been subject to civil or

administrative proceedings for the same

or similar fraudulent conduct

demonstrates aggravated criminal intent

and is deserving of additional

punishment for not conforming with the

requirements of judicial process or

orders issued by federal, state, or local

administrative agencies.

Offenses that involve the use of

transactions or accounts outside the

United States in an effort to conceal

illicit profits and criminal conduct

involve a particularly high level of

sophistication and complexity. These

offenses are difficult to detect and

require costly investigations and

prosecutions. Diplomatic processes

often must be used to secure testimony

and evidence beyond the jurisdiction of

United States courts. Consequently, a

minimum level of 12 is provided for

these offenses.

Subsection (b)(6) implements the

instruction to the Commission in

section 2 of Public Law 105–101.

Subsection (b)(9) implements, in a

broader form, the instruction to the

Commission in section 6(c)(2) of Public

Law 105–184.

Subsections (b)(10)(A) and(B)

implement the instruction to the

Commission in section 4 of the Wireless

Telephone Protection Act, Public Law

105–172.

Subsection (b)(10)(C) implements the

directive to the Commission in section

4 of the Identity Theft and Assumption

Deterrence Act of 1998, Public Law

105–318. This subsection focuses

principally on an aggravated form of

identity theft known as ‘affirmative

identity theft’ or ‘breeding,’ in which a

defendant uses another individual’s

name, social security number, or some

other form of identification (the ‘means

of identification’) to ‘breed’ (i.e.,

produce or obtain) new or additional

forms of identification. Because 18

U.S.C. § 1028(d) broadly defines ‘means

of identification,’ the new or additional

forms of identification can include

items such as a driver’s license, a credit

card, or a bank loan. This subsection

provides a minimum offense level of

level 12, in part, because of the

seriousness of the offense. The

minimum offense level accounts for the

fact that the means of identification that

were ‘bred’ (i.e., produced or obtained)

often are within the defendant’s

exclusive control, making it difficult for

the individual victim to detect that the

victim’s identity has been ‘stolen.’

Generally, the victim does not become

aware of the offense until certain harms

have already occurred (e.g., a damaged

credit rating or inability to obtain a

loan). The minimum offense level also

accounts for the non-monetary harm

associated with these types of offenses,

much of which may be difficult or

impossible to quantify (e.g., harm to the

individual’s reputation or credit rating,

inconvenience, and other difficulties

resulting from the offense). The

legislative history of the Identity Theft

and Assumption Deterrence Act of 1998

indicates that Congress was especially

concerned with providing increased

punishment for this type of harm.

Subsection (b)(12)(B) implements, in a

broader form, the instruction to the

Commission in section 110512 of Public

Law 103–322.

Subsection (b)(13) implements, in a

broader form, the instruction to the

Commission in section 961(m) of Public

Law 101–73.

Subsection (b)(14) implements, in a

broader form, the instruction to the

Commission in section 2507 of Public

Law 101–647.

Subsection (d) implements the

instruction to the Commission in

section 805(c) of Public Law 104–132.’’.

The Commentary to § 1B1.1 captioned

‘‘Application Notes’’ is amended in

Note 1 by striking subdivision (f) in its

entirety.

The Commentary to § 1B1.1 captioned

‘‘Application Notes’’ is amended in

Note 4 in the second paragraph by

striking ‘‘For example, the adjustments

from § 2F1.1(b)(2) (more than minimal

planning) and § 3B1.1 (Aggravating

Role) are applied cumulatively.’’.

The Commentary to § 2A2.2 captioned

‘‘Application Notes’’ is amended in

Note 2 by striking ‘‘more than minimal

planning,’’.

The Commentary to § 2A2.2 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘4. ‘More than minimal planning’

means more planning than is typical for

commission of the offense in a simple

form. ‘More than minimal planning’ also

exists if significant affirmative steps

were taken to conceal the offense, other

than conduct to which § 3C1.1

(Obstructing or Impeding the

Administration of Justice) applies. For

example, waiting to commit the offense

when no witnesses were present would

not alone constitute more than minimal

planning. By contrast, luring the victim

to a specific location, or wearing a ski

mask to prevent identification, would

constitute more than minimal

planning.’’.

The Commentary to § 2B2.1 captioned

‘‘Application Notes’’ is amended in

Note 1 by striking ‘‘’More than minimal

planning’’, ‘‘firearm,’’’ and inserting

‘ ‘‘Firearm,’ ’’.

The Commentary to § 2B2.1 captioned

‘‘Application Notes’’ is amended in

Note 2 by striking ‘‘§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft)’’ and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud).’’.

The Commentary to § 2B2.1 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘4. ‘More than minimal planning’

means more planning than is typical for

commission of the offense in a simple

form. ‘More than minimal planning’ also

exists if significant affirmative steps

were taken to conceal the offense, other

than conduct to which § 3C1.1

(Obstructing or Impeding the

Administration of Justice) applies. For

example, checking the area to make sure

no witnesses were present would not

alone constitute more than minimal

planning. By contrast, obtaining

building plans to plot a particular

course of entry, or disabling an alarm

system, would constitute more than

minimal planning.’’.

Issues for Comment

(1) The Commission invites comment

on whether and how the rules on

inchoate and partially completed

offenses, as currently expressed in

§ 2X1.1, § 1B1.2 application note 7,

§ 2B1.1 application note 2 (last

paragraph), and § 2F1.1 application

Note 10, should apply under the

proposed revised and consolidated

economic crime guideline (§ 2B1.1) and

the proposed revised definition of

‘‘loss.’’ If the current rules are retained,

how might they be revised to make their

application clearer, simpler, and more

consistent? Alternatively, should the

current rules be replaced with

permissive, encouraged downward

departure commentary? If the current

rules are modified in regard to offenses

sentenced under the revised,

consolidated guideline, what

conforming changes should be made in

§ 2X1.1 to ensure similar treatment for

similar offense conduct not subject to

the revised consolidated guideline?

(2) The Commission also requests

comment on whether, and if so, to what

7992 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

extent it should provide an

enhancement for the destruction of, or

damage to, unique or irreplaceable items

of cultural heritage, archaeological, or

historical significance. As one means of

providing an enhancement, should the

Commission provide an alternative loss

calculation based on the cultural

heritage, archaeological, or historical

significance of the item or based on the

cost of the item’s restoration and repair?

See, e.g., United States v. Shumway, 47

F.3d 1413, 1424 (10th Cir. 1997).

Alternatively, should the Commission

provide an upward departure provision

for such cases, or some combination of

an alternative measure of loss and an

upward departure provision? Should

the Commission also consider amending

the current enhancement for damage to,

or destruction of, property of a national

cemetery in §§ 2B1.1 and 2B1.3 to

include, for example, offenses involving

human remains and funerary objects

located on federal or Indian land?

Part B. Loss Tables for Consolidated

Guideline and § 2T4.1 (Tax Table)

Synopsis of Proposed Amendment:

This amendment proposes three options

for a loss table for the consolidated

guideline, § 2B1.1, and two options for

a loss table for § 2T4.1 (Tax Table). If a

decision is made to use the same table,

the effect would be to sentence the

offenses under both guidelines in a

similar manner. This would represent a

change from the current relationship in

which tax offenses generally face

slightly higher offense levels for a given

loss amount than fraud and theft

offenses.

Regarding the tables for both

guidelines, each option attempts to

compress the loss table by (generally)

moving from one-level to two-level

increments, thus increasing the range of

losses that correspond to an individual

increment. This is designed to minimize

fact-finding and the appearance of false

precision.

Proposed Amendment (Part B)

Sections 2B1.1(b)(1), as amended by

Part A of this amendment, is further

amended to read as follows:

Option One

‘‘(1) If the loss exceeded $2,000,

increase the offense level as follows:

Loss (apply the greatest) Increase in

level

(A) $2,000 or less .................. no increase.

(B) More than $2,000 ............. add 1.

(C) More than $5,000 ............ add 2.

(D) More than $10,000 .......... add 4.

(E) More than $20,000 ........... add 6.

(F) More than $40,000 ........... add 8.

Loss (apply the greatest) Increase in

level

(G) More than $80,000 .......... add 10.

(H) More than $200,000 ........ add 12.

(I) More than $500,000 .......... add 14.

(J) More than $1,200,000 ...... add 16.

(K) More than $2,500,000 ...... add 18.

(L) More than $7,500,000 ...... add 20.

(M) More than $20,000,000 ... add 22.

(N) More than $50,000,000 ... add 24.

(O) More than $100,000,000 add 26.’’.

Option Two

‘‘(1) If the loss exceeded $5,000,

increase the offense level as follows:

Loss (apply the greatest) Increase in

level

(A) $5,000 or less .................. no increase.

(B) More than $5,000 ............. add 2.

(C) More than $10,000 .......... add 4.

(D) More than $30,000 .......... add 6.

(E) More than $70,000 ........... add 8.

(F) More than $120,000 ......... add 10.

(G) More than $200,000 ........ add 12.

(H) More than $400,000 ........ add 14.

(I) More than $1,000,000 ....... add 16.

(J) More than $2,500,000 ...... add 18.

(K) More than $7,000,000 ...... add 20.

(L) More than $20,000,000 .... add 22.

(M) More than $50,000,000 ... add 24.

(N) More than $100,000,000 add 26.’’.

Option Three

(1) If the loss exceeded $5,000,

increase the offense level as follows:

Loss (apply the greatest) Increase in

level

(A) $5,000 or less .................. no increase.

(B) More than $5,000 ............. add 2.

(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 $160,000 ........ add 12.

(H) More than $400,000 ........ add 14.

(I) More than $1,000,000 ....... add 16.

(J) More than $2,500,000 ...... add 18.

(K) More than $7,5000,000 .... add 20.

(L) More than $20,000,000 .... add 22.

(M) More than $50,000,000 ... add 24.

(N) More than $125,000,000 add 26.’’.

Section 2T4.1 is amended by striking

the table in its entirety and inserting the

following:

Option One

Tax loss (apply the greatest) Offense 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.

Tax loss (apply the greatest) Offense level

(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.’’.

Option Two

‘‘Tax loss (apply the greatest) Offense level

(A) $5,000 or less ................... 6

(B) More than $5,000 ............. 8

(C) More than $10,000 ........... 10

(D) More than $30,000 ........... 12

(E) More than $70,000 ........... 14

(F) More than $120,000 ......... 16

(G) More than $200,000 ......... 18

(H) More than $400,000 ......... 20

(I) More than $1,000,000 ........ 22

(J) More than $2,500,000 ....... 24

(K) More than $7,000,000 ...... 26

(L) More than $20,000,000 ..... 28

(M) More than $50,000,000 .... 30

(N) More than $100,000,000 .. 32.’’.

Part C. Revised Definition of Loss for

Offenses Sentenced Pursuant to § 2B1.1,

the Consolidated Guideline

Synopsis of Proposed Amendment:

The proposed amendment provides two

major options to create one definition of

loss for offenses sentenced pursuant to

§ 2B1.1 (Larceny, Embezzlement and

Other Forms of Theft) and § 2F1.1

(Fraud and Deceit). Each option is

designed to resolve circuit conflicts,

address case law and application issues,

and to promote consistency in

application. To the extent practicable,

each of the proposed definitions retains

existing language and concepts that

have not proven problematic. The first

option was prepared by the Commission

and is intended to invite comment on

the major issues related to the definition

of loss, including those presented in the

second option. The second option was

prepared by the Criminal Law

Committee (CLC) of the Judicial

Conference and is included for

publication in its entirety in recognition

of the years of effort that the members

of that committee have put into the

preparation of a new definition of loss.

The proposed amendment would

accomplish the following purposes:

(1) Combine the loss definitions in the

commentary to the theft and fraud

guidelines into one definition with a

simplified format;

(2) Provide definitions for key

concepts of loss, including ‘‘actual

loss’’, ‘‘pecuniary harm’’, and ‘‘intended

loss’’;

(3) Provide two options for a

causation standard: (A) ‘‘but for’’

causation standard (and an example)

plus reasonable foreseeability; and (B)

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7993

combine current loss concepts from

§§ 2B1.1 and 2F1.1 and make clear ‘‘but

for’’ causation is required but without

concept of reasonable foreseeability;

(4) Clarify the concept of intended

loss in terms of the applicability of any

credits or offsets, and to resolve a circuit

conflict to provide that intended loss

includes unlikely or impossible losses

that are intended;

(5) Provide two options for when loss

should be measured: (A) at the time of

sentencing; and (B) when the offense

was detected;

(6) Provide three options for what

should be considered the time of

detection: (A) when the offense is

discovered by a victim or governmental

agency; (B) when the defendant should

have known the offense was detected [or

about to be detected]; and (C) at the

earlier of those two occurrences;

(7) Provide two options regarding

inclusion of interest: (A) to explicitly

exclude interest; and (B) to provide for

the inclusion of only that interest that

is accrued and unpaid that was

bargained for as part of a lending

transaction involved in the offense;

(8) Exclude certain costs incurred by

the government and victims in

connection with prosecution and

criminal investigation of the offense;

(9) Provide for exclusion from loss of

certain economic benefits transferred to

victims, to be measured at the time of

detection;

(10) Provide an option for certain

exceptions to what constitutes

‘‘economic benefits’’: (A)(i) benefits of

‘‘de minimis’’ value; or (ii) benefits that

are substantially different from what the

victim intended to receive; and (B)

services fraudulently rendered by

defendants posing as licensed

professionals and for goods falsely

represented as approved by a regulatory

agency or for which regulatory approval

was obtained by fraud;

(11) Provide two options for

excluding certain benefits transferred to

victims of investment fraud schemes,

both of which would resolve a circuit

conflict: (A) Exclude gain to an

individual investor in the scheme from

being used to offset the loss to other

individual investors in the scheme; and

(B) exclude benefits transferred to

victims designed to lure additional

investments in the scheme from being

used to offset the loss;

(12) Provide greater clarity regarding

the flexibility that judges have in

estimating loss;

(13) Provide four options for the use

of gain: (A) Allow the use of gain as one

of the factors to be used in estimating

loss; (B) allow use of pecuniary gain as

an alternative measure of loss if the gain

is greater than loss; (C) provide for use

of gain when loss cannot reasonably be

determined or when gain is greater than

loss; and (D) allow use of gain as an

alternative when loss cannot reasonably

be determined but the gain can be

determined;

(14) Provide that the special loss rules

establish a minimum loss rule in the

specific context described;

(15) Further revise the special rule on

determining loss in cases involving

diversion of government program

benefits to resolve an apparent circuit

conflict;

(16) Reformat and clarify the

provisions dealing with departures,

including a bracketed option that would

permit a downward departure where the

loss exceeds the greater of the

[defendant’s] actual or intended

[personal] gain; and

(17) Reposition into the background

commentary examples from the current

rules on inclusion of consequential

damages in offenses involving product

substitution and government contract

fraud, consistent with option one

regarding a causation standard.

Proposed Amendment (Part C)

Option One (Commission Proposal)

The Commentary to § 2B1.1 captioned

‘‘Application Notes’’, as amended by

Part A of this amendment, is further

amended by inserting after Note 1 the

following:

‘‘2. For purposes of subsection

(b)(1).—

(A) General Rule.—Subject to the

exclusions in subdivision (B), loss is the

greater of actual loss or intended loss.

[Option 1: ‘Actual loss’ means the

reasonably foreseeable pecuniary harm

that resulted or will result from the

conduct for which the defendant is

accountable under § 1B1.3 (Relevant

Conduct).

‘Reasonably foreseeable pecuniary

harm’ means pecuniary harm that the

defendant knew, or under the

circumstances of the particular case,

reasonably should have known, likely

would result, in the ordinary course of

events, from that conduct. For example,

in an offense involving unlawfully

accessing, or exceeding authorized

access to, a ‘protected computer,’ as

defined in 18 U.S.C. § 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.

For example, defendant H pays

defendant D $500 to inspect a home

defendant H has contracted to purchase.

Defendant D does not actually conduct

an inspection, but rather mails

defendant H a fraudulent inspection

report stating that the property is free of

all defects. Two days before closing, an

underground oil tank—which must be

removed before the sale may close—is

discovered on the property. Due to the

resulting unavoidable delay caused by

the need to remove the tank, the closing

must be postponed. Because defendant

H’s lease on his present residence

expired on the original closing date,

defendant H must locate temporary

housing at additional cost. Further,

defendant H loses the financing he had

obtained and must procure new

financing, at a higher interest rate, from

another bank. On his way to the new

bank to complete the paper work for the

new loan, defendant H is in an

automobile accident resulting in damage

to the vehicle and injuries to defendant

H. The $500 paid for the inspection

report is includeable in loss as a direct

loss. The increased rental payment for

temporary housing and the cost

resulting from the higher interest rates

are also included in loss because they

follow in the ordinary course and,

therefore, are foreseeable. However,

although the damage incurred in the

automobile accident would not have

occurred but for the fraud, it

nevertheless did not follow in the

ordinary course of events and was not

foreseeable by a reasonable person in

the defendant’s position. Accordingly, it

is not included in loss.]

[Option 2: ‘Actual loss’ means the

pecuniary harm that resulted or will

result from the conduct for which the

defendant is accountable under § 1B1.3

(Relevant Conduct). ‘Pecuniary harm’

includes the value of the property taken,

damaged, or destroyed, and the value of

money and services unlawfully taken.

Ordinarily, in a case in which property

is taken or destroyed, the loss is the fair

market value of the particular property

at issue. If the market value is difficult

to ascertain or inadequately measures

harm to the victim, the court may

measure loss in some other way, such as

reasonable replacement cost to the

victim.]

‘Intended loss’ means the pecuniary

harm that was intended to result from

the conduct for which the defendant is

accountable under § 1B1.3. ‘Intended

loss’ includes intended harm that would

have been impossible or unlikely to

occur (e.g., as in a government sting

operation, or an insurance fraud in

which the claim exceeded the insured

value)[so long as the intended loss

reasonably would have resulted if the

7994 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

facts were as the defendant believed

them to be].

[Option 1:

(B) Time of measurement.—Loss

ordinarily should be measured at the

time of sentencing, except as provided

herein.]

[Option 2:

(B) Time of measurement.—Loss

ordinarily should be measured at the

time the offense was detected. An

offense is detected [Option 2A: When

the offense is discovered by a victim or

a governmental agency.] [Option 2B:

When the defendant knew or reasonably

should have known that the offense was

detected [or about to be detected] by a

victim or a public law enforcement

agency.] [Option 2C: The earlier of when

an offense is discovered by a victim or

a governmental agency or the defendant

knew or reasonably should have known

that the offense was detected [or about

to be detected] by a victim or a public

law enforcement agency.]

(C) Exclusions from Loss.—

[Option 1: (i) Interest of any kind,

finance charges, late fees, penalties,

amounts based on an agreed-upon

return or rate of return, or other

opportunity costs.]

[Option 2: (i) Interest of any kind,

except if it is bargained for as part of a

lending transaction that is involved in

the offense. In such a case, 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.]

(ii) Costs to the government of, and

costs incurred by victims primarily to

aid the government in, the prosecution

and criminal investigation of an offense,

even if such costs are reasonably

foreseeable.

[(iii) The value of the economic

benefit the defendant or other persons

acting jointly with the defendant

transferred to the victim before the

offense was detected.]

(I) For purposes of this subdivision.—

‘‘Economic benefit’’ [includes][means]

money, property, or services performed.

‘‘Transferred’’ means pledged or

otherwise provided as collateral,

returned, repaid, or otherwise conveyed.

(II) The value of any ‘‘economic

benefit’’ transferred to the victim by the

defendant ordinarily shall be measured

at the time the offense was detected.

(III) However, in a case involving

collateral pledged by a defendant, the

‘‘economic benefit’’ of such collateral to

the victim for purposes of this

subdivision is the amount the victim

has recovered at the time of sentencing

from disposition of the collateral. If the

collateral has not been disposed of by

that time, the ‘economic benefit’ of the

collateral is its value at the time of

sentencing.

[(IV) However, loss shall not be

reduced by the value of:

(1) [benefits of de minimis value

transferred by the defendant to the

victim(s)][economic benefit transferred

to the victim that has little or no value

to the victim because it is substantially

different from what the victim intended

to receive]; or

(2) services fraudulently rendered to

victims by persons falsely posing as

licensed professionals, or goods falsely

represented as approved by a

governmental regulatory agency, or

goods for which regulatory approval by

a government agency was obtained by

fraud.]

[Option 1:(V) In a case involving a

fraudulent investment scheme, such as

a Ponzi scheme, the loss shall not be

reduced by the value of the economic

benefit transferred to any individual

investor in the scheme in excess of that

investor’s principal investment (i.e., the

gain to an individual investor in the

scheme shall not be used to offset the

loss to another individual investor in

the scheme).]

[Option 2:(V) In a case involving a

fraudulent investment scheme, such as

a Ponzi scheme, loss shall not be

reduced by the benefit transferred to

victims designed to lure additional

‘investments’ in the scheme.]

(D) Estimation of Loss.—In order to

determine the applicable offense level,

the court need only make a reasonable

estimate of the loss. The sentencing

judge is in a unique position to assess

the evidence and estimate the loss based

upon that evidence. For this reason, the

court’s loss determination is entitled to

appropriate deference. See 18 U.S.C.

§ 3742(e) and (f).

The estimate of the loss shall be based

on available information, taking into

account, as appropriate and practicable

under the circumstances, factors such as

the following:

(i) The fair market value of the

property, 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 that

property or other thing of value.

(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.

[Option 1:(v) The gain from the

offense.]

[Option 2:

(E) Pecuniary Gain.—The court shall

use the defendant’s pecuniary gain as an

alternative measure of loss if the

pecuniary gain is greater than loss

(which may be zero).

‘‘Pecuniary gain’’ has the meaning

given that term in Application Note 3(h)

of the Commentary to § 8A1.2

(Application Instructions—

Organizations) (i.e., the before-tax profit

resulting from the relevant conduct of

the offense).]

[Option 3:

(E) Pecuniary Gain.—The court shall

use the defendant’s pecuniary gain as an

alternative measure of loss if (i) loss

cannot reasonably be determined; or (ii)

gain is greater than loss.

‘Pecuniary gain’ has the meaning

given that term in Application Note 3(h)

of the Commentary to § 8A1.2

(Application Instructions—

Organizations) (i.e., the before-tax profit

resulting from the relevant conduct of

the offense).]

[Option 4:

(E) Gain.—The Court shall use the

defendant’s gain if loss cannot

reasonably be determined. For purposes

of this application note, ‘‘gain’’ means

the proceeds from the illegal activity.]

[(F) Special Rules.—The following

special rules shall be used to assist in

determining loss in the cases indicated:

(i) Stolen or Counterfeit Credit Cards

and Access Devices; Purloined Numbers

and Codes.—In a case involving any

counterfeit access device or

unauthorized access device, loss

includes any unauthorized charges

made with the counterfeit access device

or unauthorized access device. In any

such case, loss shall be not less than

$500 per access device. However, if the

unauthorized access device is a means

of telecommunications access that

identifies a specific telecommunications

instrument or telecommunications

account (including an electronic serial

number/mobile identification number

(ESN/MIN) pair), and that means was

only possessed, and not used, during

the commission of the offense, loss shall

be not less than $100 per unused means.

For purposes of this application note,

‘‘counterfeit access device’’ and

‘‘unauthorized access device’’ have the

meaning given those terms in

Application Note 15.

(ii) Government Benefits.—In a case

involving government benefits (e.g.,

grants, loans, entitlement program

payments), loss shall be considered to

be not less than the value of the benefits

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7995

obtained by unintended recipients or

diverted to unintended uses, as the case

may be. For example, if the defendant

was the intended recipient of food

stamps having a value of $100 but

fraudulently received food stamps

having a value of $150, the loss is $50.

In a case involving a Davis-Bacon Act

violation (i.e., a violation of 40 U.S.C.

§ 276a, criminally prosecuted under 18

U.S.C. § 1001), the value of the benefits

shall be considered to be not less than

the difference between the legally

required and actual wages paid.

In the case of a loan (e.g., a student

educational loan), the value of the

benefits shall be considered to be not

less than the amount of savings in

interest over the life of the loan

compared to alternative loan terms for

which the applicant would have

qualified.]

(G) Departure Considerations.—

(i) Upward Departure

Considerations.—There may be cases in

which the offense level determined

under this guideline substantially

understates the seriousness of the

offense. In such cases, an upward

departure may be warranted. The

following is a non-exhaustive list of

factors that the court may consider in

determining whether an upward

departure is warranted:

(I) A primary objective of the offense

was an aggravating, non-monetary

objective. For example, a primary

objective of the offense was to inflict

emotional harm.

(II) The offense caused or risked

substantial non-monetary harm. For

example, the offense caused physical

harm, psychological harm, or severe

emotional trauma, or resulted in a

substantial invasion of a privacy

interest.

(III) The offense involved a substantial

amount of interest of any kind, finance

charges, late fees, penalties, anticipated

profits, amounts based on an agreedupon return or rate of return, or other

opportunity costs, not included in the

determination of loss for purposes of

subsection (b)(1).

(IV) The offense created a risk of

substantial loss beyond the loss

determined for purposes of subsection

(b)(1).

(V) The offense endangered the

solvency or financial security of one or

more victims.

(ii) Downward Departure

Considerations. There also may be cases

in which the offense level determined

under this guideline substantially

overstates the seriousness of the offense.

In such cases, a downward departure

may be warranted. 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, such as 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 for this reason

would not ordinarily be warranted.

[(II)The loss significantly exceeds the

greater of the [defendant’s] actual or

intended [personal] gain, and therefore

significantly overstates the culpability

of the defendant.]’’.

The Commentary to § 2B1.1 captioned

‘‘Background Commentary’’, as

amended by Part A of this proposed

amendment, is further amended by

inserting the following after the second

paragraph:

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.

[Except as excluded above, both direct

and indirect pecuniary harm that is a

reasonably foreseeable result of 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. § 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]. Likewise, in a

product substitution case, the loss

includes the victim’s reasonably

foreseeable costs of making substitute

transactions and handling or disposing

of the product delivered, or modifying

the product so that it can be used for its

intended purpose, plus the victim’s

reasonably foreseeable cost of correcting

the actual or potential disruption to the

victim’s business caused by the product

substitution. Similarly, in a defense

contract fraud case, loss includes the

reasonably foreseeable administrative

cost to the government and other

participants of repeating or correcting

the procurement action affected, plus

any increased cost to procure the

product or service involved that was

reasonably foreseeable.]’’.

Option Two (Criminal Law Committee

Proposal)

The Commentary to § 2B1.1 captioned

‘‘Application Notes’’, as amended by

Part A of this amendment, is further

amended by inserting after Note 1 the

following:

‘‘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 § 1B1.3 (Relevant Conduct).

‘Reasonably foreseeable pecuniary

harm’ means pecuniary harm that the

defendant knew or, under the

circumstances of the particular case,

reasonably should have known likely

would result in the ordinary course of

events from the conduct for which the

defendant is accountable under § 1B1.3

(Relevant Conduct).

‘Intended loss’ means the pecuniary

harm that was intended to result from

the conduct for which the defendant is

accountable under § 1B1.3, even if that

harm would have been impossible or

unlikely to occur (e.g., as in a

government sting operation, or an

intended insurance fraud in which the

claim exceeded the insured value), so

long as the intended loss would

reasonably have resulted if the facts

were as the defendant believed them to

be.

(B) Exclusions from Loss.—Loss does

not include the following:

(i) Interest of any kind, finance

charges, late fees, penalties, anticipated

profits, or amounts based on an agreedupon return or rate of return.

(ii) Costs to the government of, and

costs incurred by victims primarily to

aid the government in, the prosecution

and criminal investigation of an offense,

even if such costs are reasonably

foreseeable.

(C) Credits In Determining Loss.—

(i) Loss shall be determined by

excluding the value of the economic

benefit the defendant or other persons

acting jointly with the defendant

transferred to the victim before the

offense was detected. However, loss

shall not be reduced by the value of:

7996 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

(a) benefits of de minimis value

transferred by the defendant to the

victim(s).

(b) services fraudulently rendered to

victims by persons falsely posing as

licensed professionals, or goods falsely

represented as approved by a

governmental regulatory agency, or

goods for which regulatory approval by

a government agency was obtained by

fraud.

(ii) In a case involving a fraudulent

investment scheme, such as a ‘Ponzi

scheme,’ the loss shall not be reduced

by the value of the economic benefit

transferred to any investor in the

scheme in excess of that investor’s

principal investment (i.e., the gain to

one investor in the scheme shall not be

used to offset the loss to another

investor in the scheme).

(iii) For purposes of this subsection:

(A) ‘economic benefit’ means money,

property, or services performed; and (B)

‘transferred’ includes pledged or

otherwise provided as collateral,

returned, repaid, or otherwise conveyed.

(D) Time of measurement: Loss

should ordinarily be measured at the

time the offense was detected.

(i) For purposes of this guideline, an

offense is detected when the defendant

knew or reasonably should have known

that the offense was detected by a victim

or a public law enforcement agency.

(ii) Except as provided in subsection

(D)(iii), the value of any ‘economic

benefit’ transferred to the victim by the

defendant for purposes of Subsection

(C) shall be measured at the time the

offense was detected.

(iii) However, in a case involving

collateral pledged by a defendant, the

‘economic benefit’ of such collateral to

the victim for purposes of Subsection

(C) is the amount the victim has

recovered at the time of sentencing from

disposition of the collateral. If the

collateral has not been disposed of by

that time, the ‘economic benefit’ of the

collateral is its value at the time of

sentencing.

(E) Estimation of Loss. The court need

not determine the precise amount of the

loss. Rather, it need only make a

reasonable estimate of loss. The

sentencing judge is in a unique position

to assess the evidence and estimate the

loss based upon that evidence. For this

reason, the court’s loss determination is

entitled to appropriate deference. See 18

U.S.C. 3742(e) and (f).

The estimate of the loss shall be based

on available information, taking into

account and using as appropriate and

practicable under the circumstances,

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 that

property or other thing of value.

(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.

(F) Gain. The court shall use the

defendant’s gain as an alternative

measure of loss when loss cannot

otherwise reasonably be determined, but

the defendant’s gain can reasonably be

determined.

(G) Special Rules. The following

special rules shall be used to assist in

determining actual loss in the cases

indicated:

(i) 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.

1602(k)), stolen or counterfeit access

devices (see 18 U.S.C. 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, number or

code shall be not less than $500.

(ii) 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. For

example, if the defendant was the

lawful recipient of food stamps having

a value of $100 but fraudulently

received food stamps having a value of

$150, the loss is $50.

(iii) Davis-Bacon Act Cases. In a case

involving a Davis-Bacon Act violation

(i.e., a violation of 40 U.S.C. 276a,

criminally prosecuted under 18 U.S.C.

1001), the actual loss is the difference

between the legally required and actual

wages paid.

(H) Departure Considerations.

(1) 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 nonexhaustive list of factors that the court

may consider in determining whether

an upward departure is warranted:

(a) A primary objective of the offense

was an aggravating, non-monetary

objective, such as to inflict emotional

harm.

(b) The offense resulted in 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.

(c) The offense created a risk of

substantial loss beyond the loss

determined above.

(d) The offense endangered the

solvency or financial security of one or

more victims.

(e) The offense involved a substantial

risk that a victim would lose a

significant portion of his or her net

worth or suffer other significant

financial hardship.

(2) Downward Departure

Considerations. There 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 nonexhaustive list of factors that the court

may consider in determining whether a

downward departure is warranted:

(a) The primary objective of the

offense was a mitigating, non-monetary

objective, such as 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 for this reason

would not ordinarily be warranted.

(b) The loss significantly exceeds the

greater of the defendant’s actual or

intended personal gain, and therefore

significantly overstates the culpability

of the defendant.’’.

The Commentary to § 2B1.1 captioned

‘‘Background’’, as amended by Part A of

this amendment, is further amended by

inserting after the second paragraph the

following:

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.

Both direct and indirect pecuniary

harm that is a reasonably foreseeable

result of the offense will be taken into

account in determining the loss. For

example, in an offense involving

unlawfully accessing, or exceeding

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7997

authorized access to, a ‘‘protected

computer,’ as defined in 18 U.S.C.

§ 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. Likewise, in a product

substitution case, the loss includes the

victim’s reasonably foreseeable costs of

making substitute transactions and

handling or disposing of the product

delivered or modifying the product so

that it can be used for its intended

purpose, plus the victim’s reasonably

foreseeable cost of correcting the actual

or potential disruption to the victim’s

business caused by the product

substitution. Similarly, in a defense

contract fraud case, loss includes the

reasonably foreseeable administrative

cost to the government and other

participants of repeating or correcting

the procurement action affected, plus

any increased cost to procure the

product or service involved that was

reasonably foreseeable.’’.

Part D. Referring Guidelines for Theft

and Fraud

Synopsis of Proposed Amendment:

The following proposed amendments

are intended to be made in conjunction

with a change to the loss tables in

§ 2B1.1 (Larceny, Embezzlement, and

Other Forms of Theft) or § 2F1.1 (Fraud

and Deceit). The amendments provide a

1-level increase in several guidelines

that refer to the loss tables for cases in

which the loss is more than $2,000 but

not more than $5,000. This increase

would be provided to avoid a 1-level

decrease that would otherwise occur for

offenses involving losses of more than

$2,000 but not more than $5,000

because the proposed table does not

provide the first increase for loss

amount until loss exceeds $5,000.

Proposed Amendments (Part D)

Section 2B2.3(b) is amended by

striking subdivision (3) in its entirety

and inserting the following:

‘‘(3) If (A) the offense involved

invasion of a protected computer; and

(B) the loss resulting from the invasion

(i) exceeded $2,000 but did not exceed

$5,000, increase by 1 level; or (ii)

exceeded $5,000, increase by the

number of levels from the table in

§ 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

amount.’’.

Section 2B3.3(b) is amended by

striking subdivision (1) in its entirety

and inserting the following:

‘‘(1) If the greater of the amount

obtained or demanded (A) exceeded

$2,000 but did not exceed $5,000,

increase by 1 level; or (B) exceeded

$5,000, increase by the number of levels

from the table in § 2B1.1 (Theft,

Property Destruction, and Fraud)

corresponding to that amount.’’.

Section 2B4.1(b) is amended by

striking subdivision (1) in its entirety

and inserting the following:

‘‘(1) If the greater of the value of the

bribe or the improper benefit to be

conferred (A) exceeded $2,000 but did

not exceed $5,000, increase by 1 level;

or (B) exceeded $5,000, increase by the

number of levels from the table in

§ 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

amount.’’.

Section 2B5.1(b) is amended by

striking subdivision (1) in its entirety

and inserting the following:

‘‘(1) If the face value of the counterfeit

items (A) exceeded $2,000 but did not

exceed $5,000, increase by 1 level; or (B)

exceeded $5,000, increase by the

number of levels from the table in

§ 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

amount.’’.

Section 2B5.3(b) is amended by

striking subdivision (1) in its entirety

and inserting the following:

‘‘(1) If the infringement amount (A)

exceeded $2,000 but did not exceed

$5,000, increase by 1 level; or (B)

exceeded $5,000, increase by the

number of levels from the table in

§ 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

amount.’’.

Section 2B6.1(b) is amended by

striking subdivision (1) in its entirety

and inserting the following:

‘‘(1) If the retail value of the motor

vehicles or parts (A) exceeded $2,000

but did not exceed $5,000, increase by

1 level; or (B) exceeded $5,000, increase

by the number of levels from the table

in § 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

amount.’’.

Section 2C1.1(b)(2) is amended by

striking subdivision (A) in its entirety

and inserting the following:

‘‘(A) If the value of the payment, the

benefit received or to be received in

return for the payment, or the loss to the

government from the offense, whichever

is greatest (i) exceeded $2,000 but did

not exceed $5,000, increase by 1 level;

or (ii) exceeded $5,000, increase by the

number of levels from the table in

§ 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

amount.’’.

Section 2C1.2(b)(2) is amended by

striking subdivision (A) in its entirety

and inserting the following:

‘‘(A) If the value of the gratuity (i)

exceeded $2,000 but did not exceed

$5,000, increase by 1 level; or (ii)

exceeded $5,000, increase by the

number of levels from the table in

§ 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

amount.’’.

Section 2C1.6(b) is amended by

striking subdivision (1) in its entirety

and inserting the following:

‘‘(1) If the value of the gratuity (i)

exceeded $2,000 but did not exceed

$5,000, increase by 1 level; or (ii)

exceeded $5,000, increase by the

number of levels from the table in

§ 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

amount.’’.

Section 2C1.7(b)(1) is amended by

striking subdivision (A) in its entirety

and inserting the following:

‘‘(A) If the loss to the government, or

the value of anything obtained or to be

obtained by a public official or others

acting with a public official, whichever

is greater, (i) exceeded $2,000 but did

not exceed $5,000, increase by 1 level;

or (ii) exceeded $5,000, increase by the

number of levels from the table in

§ 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

amount.’’.

Section 2E5.1(b) is amended by

striking subdivision (2) in its entirety

and inserting the following:

‘‘(2) If the value of the prohibited

payment or the value of the improper

benefit to the payer, whichever is

greater (A) exceeded $2,000 but did not

exceed $5,000, increase by 1 level; or (B)

exceeded $5,000, increase by the

number of levels from the table in

§ 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

amount.’’.

Section 2G2.2(b)(2)(A) is amended by

striking ‘‘§ 2F1.1 (Fraud and Deceit)’’

and inserting ‘‘§ 2B1.1 (Theft, Property

Destruction, and Fraud)’’.

Section 2G3.1(b)(1)(A) is amended by

striking ‘‘§ 2F1.1 (Fraud and Deceit)’’

and inserting ‘‘§ 2B1.1 (Theft, Property

Destruction, and Fraud)’’.

Section 2G3.2(b)(2) is amended by

striking ‘‘at § 2F1.1 (b)(1)’’ and inserting

‘‘in § 2B1.1 (Theft, Property Destruction,

and Fraud).’’.

Section 2Q2.1(b)(3) is amended by

striking subdivision (A) in its entirety

and inserting the following:

‘‘(A) If the market value of the fish,

wildlife, or plants (i) exceeded $2,000

but did not exceed $5,000, increase by

1 level; or (ii) exceeded $5,000, increase

by the number of levels from the table

in § 2B1.1 (Theft, Property Destruction,

and Fraud) corresponding to that

7998 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

amount, [but in no event more than [18]

levels]; or’’.

Section 2S1.3(a) is amended by

striking ‘‘§ 2F1.1 (Fraud and Deceit)’’

and inserting ‘‘§ 2B1.1 (Theft, Property

Destruction, and Fraud)’’.

Part E. Technical and Conforming

Amendments

The Commentary to § 1B1.2 captioned

‘‘Application Notes’’ is amended in

Note 1 in the fourth paragraph by

striking ‘‘§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft)’’ and inserting ‘‘§ 2F1.1 (Theft,

Property Destruction, and Fraud)’’.

The Commentary to § 1B1.3 captioned

‘‘Application Notes’’ is amended in

Note 5 by striking ‘‘§ 2F1.1 (Fraud and

Deceit)’’ and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud)’’.

Chapter Two, Part B, Subpart 1, is

amended by inserting after § 2B1.3 the

following:

‘‘§ 2B1.4. Insider Trading

(a) Base Offense Level: 8.

(b) Specific Offense Characteristic.

(1) Increase by the number of levels

from the table in § 2B1.1 (Theft,

Property Destruction, and Fraud)

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.

13(e), that involve misuse of inside

information for personal gain also may

appropriately be covered by this

guideline.’’.

The Commentary to § 2B5.1 captioned

‘‘Application Notes’’ is amended in

Note 3 by striking ‘‘§ 2F1.1 (Fraud and

Deceit)’’ and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud)’’.

The Commentary to § 2B5.3 captioned

‘‘Background’’ is amended in the second

sentence of the first paragraph by

striking ‘‘guidelines’’ and inserting

‘‘guideline’’.

The Commentary to § 2B2.3 captioned

‘‘Application Notes’’ is amended in

Note 2 by striking ‘‘§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft)’’ and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud)’’.

The Commentary to § 2B3.1 captioned

‘‘Application Notes’’ is amended in

Note 3 by striking ‘‘§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft)’’ and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud)’’.

The Commentary to § 2B6.1 captioned

‘‘Application Notes’’ is amended in

Note 1 by striking ‘‘§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft)’’ and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud)’’.

The Commentary to § 2B6.1 captioned

‘‘Application Notes’’ is amended by

striking Note 2 in its entirety and

inserting the following:

‘‘2. The ‘Increase by the number of

levels from the table in § 2B1.1 (Theft,

Property Destruction, and Fraud)

corresponding to that amount,’ as used

in subsection (b)(1), refers to the number

of levels corresponding to the retail

value of the motor vehicles or parts

involved.’’.

The Commentary to § 2C1.1 captioned

‘‘Application Notes’’ is amended in

Note 2 by striking ‘‘§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft) and includes both actual and

intended loss’’ and inserting ‘‘§ 2B1.1

(Theft, Property Destruction, and

Fraud)’’.

The Commentary to § 2C1.7 captioned

‘‘Application Notes’’ is amended in

Note 3 by striking ‘‘§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft) and includes both actual and

intended los’’ and inserting ‘‘§ 2B1.1

(Theft, Property Destruction, and

Fraud)’’.

Section 2H3.3(a) is amended in

subdivision (2) by inserting ‘‘or

destruction’’ after ‘‘theft’’; and by

striking ‘‘§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft)’’ and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud)’’.

Section 2H3.3(a) is amended by

striking subdivision (3) in its entirety.

The Commentary to § 2H3.3 captioned

‘‘Background’’ is amended by striking

‘‘§ 2B1.1 (Larceny, Embezzlement, and

Other Forms of Theft) or § 2B1.3

(Property Damage or Destruction)’’ and

inserting ‘‘§ 2B1.1 (Theft, Property

Destruction, and Fraud)’’.

The Commentary to § 2J1.1 captioned

‘‘Application Notes’’ is amended in

Note 2 by striking ‘‘§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft)’’ and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud)’’.

Section 2K1.4(a) is amended in

subdivision (3) by striking ‘‘§ 2F1.1

(Fraud and Deceit) if the offense was

committed in connection with a scheme

to defraud; or’’ and inserting ‘‘§ 2B1.1

(Theft, Property Destruction, and

Fraud).’’.

Section 2K1.4(a) is amended by

striking subdivision (4) in its entirety.

Section 2K1.4(b)(2) is amended in

subdivision (2) by striking ‘‘(4)’’ and

inserting ‘‘(3)’’.

Section 2N2.1(b)(1) is amended by

striking ‘‘§ 2F1.1 (Fraud and Deceit)’’

and inserting ‘‘§ 2B1.1 (Theft, Property

Destruction, and Fraud)’’.

The Commentary to § 2N2.1 captioned

‘‘Application Notes’’ is amended in

Note 2 by inserting ‘‘theft, property

destruction, and’’ after ‘‘involved’’ and

by striking ‘‘(e.g., theft, bribery,

revealing trade secrets, or destruction of

property)’’ and inserting ‘‘(e.g.,

bribery).’’.

The Commentary to § 2N2.1 captioned

‘‘Application Notes’’ is amended in

Note 4 by striking ‘‘2F1.1 (Fraud and

Deceit)’’ and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud)’’.

Section 2N3.1(b)(1) is amended by

striking ‘‘§ 2F1.1 (Fraud and Deceit)’’

and inserting ‘‘§ 2B1.1 (Theft, Property

Destruction, and Fraud)’’.

The Commentary to § 2N3.1 captioned

‘‘Background’’ is amended in the first

paragraph by striking ‘‘the guideline for

fraud and deception, § 2F1.1,’’ and

inserting ‘‘§ 2B1.1 (Theft, Property

Destruction, and Fraud)’’.

Section 2Q1.6(a)(2) is amended by

striking ‘‘§ 2B1.3 (Property Damage or

Destruction)’’ and inserting ‘‘§ 2B1.1

(Theft, Property Destruction, and

Fraud)’’.

Section 2T1.6(b)(1) is amended by

striking ‘‘§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft)’’ and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud)’’.

The Commentary to § 3B1.3 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘4. The following additional

illustrations of an abuse of a position of

trust pertain to theft or embezzlement

from employee pension or welfare

benefit plans or labor unions:

(A) If the offense involved theft or

embezzlement from an employee

pension or welfare benefit plan and the

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 7999

defendant was a fiduciary of the benefit

plan, an adjustment under this section

for abuse of a position of trust will

apply. ‘‘Fiduciary of the benefit plan’’ is

defined in 29 U.S.C. 1002(21)(A) to

mean a person who exercises any

discretionary authority or control in

respect to the management of such plan

or exercises authority or control in

respect to management or disposition of

its assets, or who renders investment

advice for a fee or other direct or

indirect compensation with respect to

any moneys or other property of such

plan, or has any authority or

responsibility to do so, or who has any

discretionary authority or responsibility

in the administration of such plan.

(B) If the offense involved theft or

embezzlement from a labor union and

the defendant was a union officer or

occupied a position of trust in the union

(as set forth in 29 U.S.C. 501(a)), an

adjustment under this section for an

abuse of a position of trust will apply.’’.

Section 3D1.2(d) is amended by

striking ‘‘2B1.3’’ and inserting ‘‘2B1.4’’;

and by striking ‘‘§§ 2F1.1, 2F1.2;’’.

The Commentary to § 3D1.2 captioned

‘‘Application Notes’’ is amended in the

third paragraph of Note 6 by striking ‘‘,

and would include, for example,

larceny, embezzlement, forgery, and

fraud’’.

Section 3D1.3(b) is amended by

striking ‘‘(e.g., theft and fraud)’’.

The Commentary to § 3D1.3 captioned

‘‘Application Notes’’ is amended in

Note 3 by striking ‘‘(e.g., theft and

fraud)’’; and by striking ‘‘In addition,

the adjustment for ‘more than minimal

planning’ frequently will apply to

multiple count convictions for property

offenses.’’.

The Commentary to § 3D1.5 captioned

‘‘Illustrations of the Operation of the

Multiple-Count Rules’’ is amended by

striking Illustration 2 in its entirety and

by redesignating Illustrations 3 and 4 as

illustrations 2 and 3, respectively.

The Commentary to § 3D1.5 captioned

‘‘Illustrations of the Operation of the

Multiple-Count Rules’’ is amended in

Illustration, as redesignated by this

amendment, 3 by striking ‘‘§ 2F1.1

(Fraud and Deceit)’’ and inserting

‘‘§ 2B1.1 (Theft, Property Destruction,

and Fraud)’’; and in the last sentence by

striking ‘‘§ 2F1.1’’ after ‘‘or’’ and

inserting ‘‘2B1.1’’.

The Commentary to § 8A1.2 captioned

‘‘Application Notes’’ is amended in

Note 3(i) by striking ‘‘§§ 2B1.1 (Larceny,

Embezzlement, and Other Forms of

Theft), 2F1.1 (Fraud and Deceit)’’ and

inserting ‘‘§ 2B1.1 (Theft, Property

Destruction, and Fraud)’’.

Section 8C2.1(a) is amended by

striking ‘‘2B1.3’’ and inserting ‘‘2B1.4’’

and by striking ‘‘§§ 2F1.1; 2F1.2;’’.

The Commentary to § 8C2.1 captioned

‘‘Application Notes’’ is amended in

Note 2 by striking wherever it appears

‘‘§ 2F1.1 (Fraud and Deceit)’’ each place

it appears and inserting ‘‘§ 2B1.1 (Theft,

Property Destruction, and Fraud)’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 6 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 6b(A) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 6b(C) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 6c by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 6h by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 6o by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 13(a)(2) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 13(a)(3) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 13(a)(4) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 13(d) by striking ‘‘2F1.2’’ and

inserting ‘‘2B1.4’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 13(f) by striking ‘‘2F1.2’’ and

inserting ‘‘2B1.4’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 23 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 270 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 2024(b) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 7

U.S.C. 2024(c) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 12

U.S.C. 631 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 50 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 77e by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 77q by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 77x by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 78j by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’; and by striking

‘‘2F1.2’’ and inserting ‘‘2B1.4’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 78ff by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 80b–6 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 158 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 645(a) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 645(b) by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 645(c) by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 714m(a) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 714m(b) by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 1281 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 1644 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 1681q by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 15

U.S.C. 1693n(a) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

8000 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

Appendix A (Statutory Index) is

amended in the line referenced to 16

U.S.C. 114 by striking ‘‘, 2B1.3’’.

Appendix A (Statutory Index) is

amended in the line referenced to 16

U.S.C. 117c by striking ‘‘, 2B1.3’’.

Appendix A (Statutory Index) is

amended in the line referenced to 16

U.S.C. 123 by striking ‘‘2B1.3,’’.

Appendix A (Statutory Index) is

amended in the line referenced to 16

U.S.C. 146 by striking ‘‘2B1.3,’’.

Appendix A (Statutory Index) is

amended in the line referenced to 16

U.S.C. 413 by striking ‘‘, 2B1.3’’.

Appendix A (Statutory Index) is

amended in the line referenced to 16

U.S.C. 433 by striking ‘‘, 2B1.3’’.

Appendix A (Statutory Index) is

amended in the line referenced to 16

U.S.C. 831t(b) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 16

U.S.C. 831t(c) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 32(a), (b) by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 33 by striking ‘‘2B1.3’’and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 37 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 43 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 112(a) by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 152 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 153 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 155 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 225 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 285 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 286 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 287 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 288 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 289 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 332 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 335 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 470 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 471 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 472 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 473 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 474 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 474A by inserting ‘‘2B1.1,’’

before ‘‘2B5.1’’; and by striking ‘‘,

2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 476 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 477 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 478 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 479 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 480 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 481 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 482 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 483 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 484 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 485 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 486 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 488 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 491 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 493 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 494 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 495 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 496 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 497 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 498 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 499 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 500 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 501 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 502 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 503 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 8001

U.S.C. 505 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 506 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 507 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 508 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 509 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 510 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 513 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 514 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 642 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’ and striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 656 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 657 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 659 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 663 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 665(a) by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 666(a)(1)(A) by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 709 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 712 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 911 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 914 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 915 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 917 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 970(a) by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1001 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1002 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1003 by inserting ‘‘2B1.1,’’ before

‘‘2B5.1’’ and striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1004 by striking ‘‘, 2F1.1’’; and

by inserting ‘‘2B1.1,’’ before ‘‘2B5.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1005 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1006 by striking ‘‘, 2F1.1’’; and

by inserting ‘‘2B1.1,’’ before ‘‘2B5.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1007 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1010 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1011 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1012 by inserting ‘‘2B1.1,’’ before

‘‘2C1.3’’ and striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1013 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1014 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1015 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1016 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1017 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1018 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1019 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1020 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1021 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1022 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1023 by striking ‘‘, 2F1.1’’ .

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1025 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1026 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1028 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1029 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1030(a)(4) by striking ‘‘2F1.1’’

and inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1030(a)(5) by striking ‘‘2B1.3’’

and inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1030(a)(6) by striking ‘‘2F1.1’’

and inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1031 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1032 by inserting ‘‘2B1.1,’’ before

‘‘2B4.1’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1033 by striking ‘‘2F1.1,’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1035 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1341 by inserting ‘‘2B1.1,’’ before

‘‘2C1.7’’; and by striking ‘‘, 2F1.1’’.

8002 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1342 by inserting ‘‘2B1.1,’’ before

‘‘2C1.7’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1343 by inserting ‘‘2B1.1,’’ before

‘‘2C1.7’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1344 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1347 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1361 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1362 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1363 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1366 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1422 by inserting ‘‘2B1.1,’’ before

‘‘2C1.2’’; and by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1702 by striking ‘‘2B1.3,’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1703 by striking ‘‘2B1.3,’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1704 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1705 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1706 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1708 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1712 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1716C by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1720 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1728 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1852 by striking ‘‘, 2B1.3’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1853 by striking ‘‘, 2B1.3’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1854 by striking ‘‘, 2B1.3’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1857 by striking ‘‘ 2B1.3,’’ and

inserting ‘‘2B1.1,’’

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1861 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1902 by striking ‘‘2F1.2’’ and

inserting ‘‘2B1.4’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1919 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1920 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1923 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 1992 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2071 by striking ‘‘, 2B1.3’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2072 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2073 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2197 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2272 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2275 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2276 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2280 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2281 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2314 by striking ‘‘, 2F1.1’’ .

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2315 by striking ‘‘, 2F1.1’’ .

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2332a by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 19

U.S.C. 1434 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 19

U.S.C. 1435 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 19

U.S.C. 1436 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 19

U.S.C. 1919 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 19

U.S.C. 2316 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 20

U.S.C. 1097(a) by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 20

U.S.C. 1097(b) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 20

U.S.C. 1097(d) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 21

U.S.C. 333(a)(2) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 22

U.S.C. 1980(g) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 22

U.S.C. 2197(n) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 22

U.S.C. 4221 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 25

U.S.C. 450d by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 26

U.S.C. 7208 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 26

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 8003

U.S.C. 7214 by inserting ‘‘2B1.1,’’ before

‘‘2C1.2’’ and striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 26

U.S.C. 7232 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 29

U.S.C. 1141 by inserting ‘‘2B1.1,’’ before

‘‘2B3.2’’ and striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 38

U.S.C. 787 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 38

U.S.C. 3502 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 41

U.S.C. 423(e) by inserting ‘‘2B1.1,’’

before ‘‘2C1.1’’; and by striking ‘‘,

2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 408 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1307(a) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1307(b) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1307a–7b by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1383(d)(2) by striking ‘‘2F1.1’’

and inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1383a(a) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1383a(b) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1395nn(a) by striking ‘‘2F1.1’’

and inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1395nn(c) by striking ‘‘2F1.1’’

and inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1396h(a) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1713 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1760(g) by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1761(o)(1) by striking ‘‘2F1.1’’

and inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 1761(o)(2) by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 3220(a) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 3220(b) by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 3426 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 3791 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 3792 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 3795 by striking ‘‘, 2F1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 42

U.S.C. 5157(a) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 45

U.S.C. 359(a) by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 46

U.S.C. 1276 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 49

U.S.C. 121 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 49

U.S.C. 11903 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 49

U.S.C. 11904 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 49

U.S.C. 14912 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 49

U.S.C. 16102 by striking ‘‘2F1.1’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 49

U.S.C. 60123(d) by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 49

U.S.C. 80116 by striking ‘‘2F1.1’’and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 49

U.S.C. 80501 by striking ‘‘2B1.3’’ and

inserting ‘‘2B1.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 49

U.S.C. App. § 1687(g) by striking

‘‘2B1.3’’ and inserting ‘‘2B1.1’’.

Part F: Computing Tax Loss Under

§ 2T1.1

Synopsis of Proposed Amendment:

This proposed amendment addresses a

circuit conflict regarding how tax loss

under § 2T1.1 (Tax Evasion) is

computed for cases that involve a

defendant’s under-reporting of income

on both individual and corporate tax

returns. Such a case often arises when

(1) the defendant fails to report, and pay

corporate income taxes on, income

earned by the corporation, (2) diverts

that unreported corporate income for

the defendant’s personal use, and (3)

fails to report, and to pay personal

income taxes on, that income. The

proposed amendment clarifies that the

amount of the tax loss is the aggregate

amount of federal income tax that

would have due by both the corporation

and the individual defendant.

More specifically, the circuits are split

on which methodology should be used

to calculate tax loss in these cases. Two

circuits use a sequential calculation

method the aggregate tax loss. Under

this method, the court determines the

corporate federal income tax that would

have been due, subtracts that amount

from the amount diverted to the

defendant personally, then determines

the personal federal income tax that

would have been due on the reduced

diverted amount. See United States v.

Harvey, 996 F.2d 919 (7th Cir. 1993);

United States v. Martinez-Rios, 143 F.3d

662 (2d Cir. 1998). In contrast, one

circuit holds that the court should

determine the aggregate tax loss by

adding the corporate federal income tax

that would have been due on the total

amount of unreported income and the

personal federal income tax that would

have been due on that total amount. See

United States v. Cseplo, 42 F.3d 36 (6th

Cir. 1994).

The amendment adopts the Harvey

approach, clarifying the existing rule in

Application Note 7 of § 2T1.1 that ‘‘if

the offense involves both individual and

corporate tax returns, the tax loss is the

aggregate tax loss from the offenses

taken together’’.

The amendment also clarifies that the

loss in § 2T1.1 refers to federal, and not

state and local, tax loss. The alternative

interpretation of this provision would

greatly complicate the guideline because

of the multitude of state and local tax

rates and provisions.

8004 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

The amendment also adds an

application note to § 2T1.1 clarifying

that a tax evasion count and a count

charging the offense that provided the

income on which tax was evaded are

grouped together under § 3D1.2(c). This

application note is consistent with the

longstanding view of the staff as to how

such counts should be treated for

grouping purposes.

Proposed Amendment (Part F)

Section § 2T1.1(c)(1) is amended in by

adding at the end the following:

‘‘(D) If the offense involved (i)

conduct described in paragraphs (A),

(B), or (C); and (ii) both individual and

corporate tax returns, the tax loss is the

aggregate tax loss from the offenses

taken together.’’.

Section 2T1.1(c)(2) is amended by

inserting ‘‘(A)’’ before ‘‘If’’; and by

adding at the end the following:

‘‘(B) If the offense involved (i)

conduct described in paragraph (A),

and; (ii) both individual and corporate

tax returns, the tax loss is the aggregate

tax loss from the offenses taken

together.’’.

The Commentary to § 2T1.1 captioned

‘‘Application Notes’’ is amended in

Note 1 by adding at the end the

following paragraph:

‘‘Tax loss’’ means federal tax loss; it

does not include state or local tax loss.’’.

The Commentary to § 2T1.1 is

amended in Note 7 by adding at the end

the following:

‘‘Accordingly, in a case in which a

defendant fails to report income derived

from a corporation on either the

defendant’s individual tax return or the

corporate tax return, the tax loss is the

aggregate amount due to the treasury

from the offenses taken together. For

example, the defendant, the sole owner

of a corporation, fraudulently

understates the corporation’s income in

the amount of $100,000 on the

corporation’s tax return, diverts the

funds to his own use, and does not

report these funds on the defendant’s

individual tax return. For purposes of

this example, assume that the applicable

tax rate is 34% and the applicable

individual tax rate is 28%. The tax loss

attributable to the defendant’s corporate

tax returns is $34,000 ($100,000

multiplied by 34%). The tax loss

attributable to the defendant’s

individual tax return is based on the

unreported $100,000 in income less the

$34,000 in corporate tax on these same

funds. This avoids double counting

because the $34,000 in corporate tax

reduces the defendant’s effective

income from $100,000 to $66,000. The

tax loss attributable to the defendant’s

individual tax return is $18,480

($66,000 multiplied by 28%).

Consequently, the aggregate tax loss for

the offenses, taken together, is $52,480

($34,000 plus $18,480).’’.

The Commentary to § 2T1.1 captioned

‘‘Application Notes’’ is amended by

adding at the end the following:

‘‘8. If the defendant is sentenced for

a count charging an offense from which

the defendant derived income and a

count charging a tax offense involving

that criminally derived income, the

counts are to be grouped together as

closely related counts under subsection

(c) of § 3D1.2 (Groups of Closely Related

Counts). Such counts are to be grouped

together whether or not the amount of

criminally derived income is sufficient

to warrant the enhancement under

subsection (b)(1).’’.

Issues for Comment

(1) The proposed amendment uses a

sequential method to determine tax loss

in cases in which the defendant is both

the individual and the corporate tax

payer. Commission invites comment on

whether § 2T1.1 instead should be

amended to provide that, in such cases,

the aggregate tax loss is the sum of (A)

the total amount of unreported income

multiplied by the corporate tax rate; and

(B) the total amount of unreported

income multiplied by the individual tax

rate.

(2) The Commission also invites

comment on whether the definition of

‘‘tax loss’’ should include interest and

penalties in evasion-of-payment tax

cases. Such cases are distinguishable

from evasion-of-assessment tax cases.

(3) The Commission also invites

comment on whether the ‘‘sophisticated

concealment’’ enhancement in

§§ 2T1.1(b)(2) and 2T1.4(b)(2) should be

revised to conform to the ‘‘sophisticated

means’’ enhancement in

§ 2F1.1(b)(6)(C), including imposition of

a minimum of offense level of level 12.

Proposed Amendment: Aggravating and

Mitigating Factors in Fraud and Theft

Cases

13. Synopsis of Proposed

Amendment: This amendment proposes

two options to provide for the

consideration of a number of

aggravating and mitigating factors that

may be present in theft and fraud cases.

Option One provides for a four-level

increase if the offense involved

significantly aggravating factors, a twolevel increase if the offense involved

aggravating factors, a two-level decrease

if the offense involved mitigating

factors, and a four-level decrease if the

offense involved significantly mitigating

factors. Option One provides a nonexhaustive list of aggravating and

mitigating factors for the court to

consider in determining whether, on

balance and after weighing the presence

and intensity of the factors, the offense

involves significantly aggravating,

aggravating, mitigating, or significantly

mitigating factors. In contrast, Option

Two provides for a two-level increase if

the offense involved certain aggravating

factor(s) and no mitigating factors or if

the aggravating factor(s) present in the

case outweigh all mitigating factors

present in the case, and a two-level

decrease if the offense involved certain

mitigating factors and no aggravating

factors or if the mitigating factor(s)

present in the case outweigh all

aggravating factors present in the case.

Option Two provides an exhaustive list

of aggravating and mitigating factors

that may trigger application of the

enhancement.

An issue for comment follows

regarding whether any of the factors in

the existing specific offense

characteristics in the fraud (§ 2F1.1),

theft (§ 2B1.1), and property destruction

(§ 2B1.3) guidelines should be

incorporated into the aggravating and

mitigating factors found in either of

Option One or Two and, accordingly,

eliminated as a specific offense

characteristic within the guideline.

Proposed Amendment

Option 1

Section 2B1.1, as amended by

Amendment 12, is further amended by

redesignating subsections (b)(8) through

(b)(14) as subsections (b)(9) through

(b)(15), respectively; and by inserting

after subsection (b)(7) the following:

‘‘(8) If the offense involved—

(A) Aggravating circumstances,

increase by 2 levels;

[(B) Significantly aggravating

circumstances, increase by 4 levels;]

(C) Mitigating circumstances, decrease

by 2 levels;

[(D) Significantly mitigating

circumstances, decrease by 4 levels.]

[In cases falling between (A) and (B),

increase by 3 levels; in cases falling

between (C) and (D), decrease by 3

levels.]’’.

The Commentary to § 2B1.1 captioned

‘‘Application Notes’’, as amended by

Amendment 12, is further amended by

adding at the end the following:

‘‘17. (A) Whether an offense involved

aggravating circumstances or

significantly aggravating circumstances

is based on consideration of the

presence and intensity of aggravating

factors, such as the following:

(i) The offense caused or risked

reasonably foreseeable, substantial nonmonetary harm;

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 8005

(ii) False statements were made for

the purpose of facilitating some other

crime;

(iii) The offense caused reasonably

foreseeable, physical or psychological

harm or emotional trauma;

(iv) The offense endangered national

security or military readiness;

(v) The offense caused a loss of

confidence in an important institution;

(vi) The offense involved the knowing

endangerment of the solvency of one or

more victims;

(vii) The offense involved more than

[10][25] victims;

(viii) The offense involved the

destruction or damage to irreplaceable

items of cultural, historical or

archeological significance;

[(ix) The loss amount determined

above was at or near the highest amount

possible for the range of loss that

corresponds to the applicable offense

level determined by the loss table].

(B) Whether an offense contains

mitigating circumstances or

significantly mitigating circumstances is

based on consideration of the presence

and intensity of mitigating factors such

as the following:

(i) The defendant, prior to detection of

the offense, made significant efforts to

limit the pecuniary harm caused by the

crime;

(ii) [The defendant’s attempted

offense was impossible or extremely

unrealistic;]

(iii) The defendant’s actual or

intended gain was substantially less

than the loss determined above;

(iv) The offense was not committed

for commercial advantage or financial

gain;

(v) The offense was committed

because of extreme financial hardship

[caused by extraordinary unforseen

circumstances not caused by the

defendant and beyond the defendant’s

control] [caused by excessive costs for

the life sustaining needs of the

defendant or his immediate family];

(vi) The offense involved minimal or

no planning;

[(vii) The loss amount determined

above was at or near the lowest amount

possible for the range of loss that

corresponds to the applicable offense

level determined by the loss table].

(C) In a case involving both

aggravating and mitigating factors, the

court will determine, after consideration

of all of the factors, whether the case

involves, on balance, aggravating[,

significantly aggravating,] or mitigating[,

or significantly mitigating]

circumstances.

(D) When applying this section, the

court must make specific findings

regarding the offense characteristics,

and clearly articulate the factors and

weight given those factors, that the court

is relying on to determine whether the

offense involved aggravating

circumstances, [significantly aggravating

circumstances,] mitigating

circumstances [or significantly

mitigating circumstances]. Such a

determination should be based on the

presence and intensity, rather than on a

simple counting, of the factors listed

above.

(E) Consistent with the overall

structure of the guidelines, the

government bears the burden of

persuasion in establishing the factors

associated with aggravating

circumstances, while the defendant

bears the burden of persuasion in

establishing the factors associated with

mitigating circumstances.

(F) Application of this section does

not preclude consideration of any of

these factors, for the purposes of an

upward or downward departure, even

though the reason for the departure has

been taken into consideration in

determining the guideline range, if the

court determines that the factor is

present to an unusual or extraordinary

degree.’’.

Option 2

Section 2B1.1, as amended by

Amendment 12, is further amended by

redesignating subsections (b)(8) through

(b)(14) as subsections (b)(9) through

(b)(15), respectively; and by inserting

after subsection (b)(7) the following:

‘‘(8) If the offense—

(A) Involved (i) at least one qualifying

aggravating factor and no qualifying

mitigating factors; or (ii) one or more

qualifying aggravating factors the

seriousness of which outweigh the

mitigating effect of all qualifying

mitigating factors present in the offense,

increase by 2 levels; or

(B) Involved (i) at least one qualifying

mitigating factor and no qualifying

aggravating factors; or (ii) one or more

qualifying mitigating factors the

mitigating effect of which outweigh the

seriousness of all qualifying aggravating

factors present in the offense, decrease

by 2 levels.’’.

The Commentary to § 2B1.1 captioned

‘‘Application Notes’’, as amended by

Amendment 12, is further amended by

adding at the end the following:

‘‘17. For purposes of subsection (b)(8):

‘Qualifying aggravating factor’ means

any of the following:

(A) the offense involved [a large

number of] [more than 10] victims, and

subsection (b)(3) is not applicable;

(B) The offense [involved the knowing

endangerment of the solvency of one or

more victims] [caused one or more

victims to suffer insolvency or

substantial financial hardship]; and

subsection (b)(7) does not apply;

(C) The offense caused reasonably

foreseeable, substantial non-monetary

harm (e.g., physical or psychological

harm or emotional trauma);

(D) The defendant’s conduct was

unusually heinous, cruel, brutal or

degrading to a victim;

(E) The offense was committed for the

purpose of facilitating another crime;

(F) The offense endangered public

health or safety, national security, or

military readiness;

(G) The offense (i) substantially

disrupted an important government

function; or (ii) caused a loss of

confidence in an important institution

and the enhancement in subsection

(b)(7)(A) does not apply; or

(H) The offense involved destruction

or substantial damage to unique

property of environmental, cultural,

historical, or archeological significance.

‘Qualifying mitigating factor’ means any

of the following:

(A) Prior to detection of the offense,

the defendant remedied, or made every

reasonable effort to remedy, the harm

resulting from the offense;

(B) The defendant’s attempted offense

(i) did not involve a government ‘sting’

operation; (ii) was highly improbable of

success; and (iii) did not result in actual

loss;

(C) The defendant neither intended to

profit, nor actually profited, from the

offense, and the offense was not

committed for the purpose of inflicting

non-monetary harm; or

(D) The defendant committed the

offense in order to avoid a perceived

greater harm, other than the avoidance

or mitigation of personal financial

hardship, (e.g., the defendant committed

the offense in order to fund medical

treatment for a gravely ill family

member).

Subsection (b)(8) applies in cases in

which qualifying aggravating factors or

qualifying mitigating factors are present

to such a degree that an increase or a

decrease in the sentence, respectively, is

appropriate. An increase or a decrease

in the sentence pursuant to subsection

(b)(8) shall not apply in a case in which

both qualifying aggravating factors and

qualifying mitigating factors are present,

but the seriousness of the qualifying

aggravating factors is equal to the

mitigating effect of the qualifying

mitigating factors.

Application of subsection (b)(8) does

not preclude consideration of any of the

factors listed in such subsection for

purposes of an upward or downward

departure if the court determines that

8006 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

the factor is present to an unusual or

extraordinary degree.’’.

Issue for Comment: The Commission

invites comment whether any of the

factors in the existing specific offense

characteristics in the fraud (§ 2F1.1),

theft (§ 2B1.1), and property destruction

(§ 2B1.3) guidelines should be

incorporated into the aggravating and

mitigating factors found in either of

Option One or Two and, accordingly,

eliminated as a separate specific offense

characteristic within the guideline.

Proposed Amendment: Sentencing

Table Amendment and Alternative to

Sentencing Table Amendment

14. Synopsis of Proposed

Amendment: In August 2000, the

Commission indicated that one of its

policy priorities would be to begin a

review of the guidelines relating to

Criminal History. See 65 FR 50034,

50035 (Aug. 16, 2000). As part of that

long range review and as part of a

review of the Economic Crime Package

set forth in Amendment #12, the

Commission is publishing part I of this

amendment (i.e., the proposed

Sentencing Table amendment) as one

item that may facilitate public

discussion and inform Commission

consideration about related issues. The

Sentencing Table amendment proposes

to change the Sentencing Table in

Chapter Five by expanding each of

Zones B and C by two levels in Criminal

History Categories I and II.

The second part of this amendment,

intended as an alternative to the

Sentencing Table amendment, proposes

a new guideline, which would be added

at the end of Chapter Three or in

Chapter Five immediately following the

Sentencing Table. It provides a twolevel reduction in offense level for

certain less serious economic offenses,

in furtherance of the statutory command

in 28 U.S.C. 994(j). The eligibility

criteria generally parallel those

determined by Congress under 18 U.S.C.

3553(f) to gain relief from applicable

controlled substance mandatory

minimums. Certain additional

requirements are added in order to more

fully define the categories of first

offenders who have not been convicted

of a ‘‘crime of violence or an otherwise

serious offense.’’ Importantly, eligibility

for the reduction also hinges on making,

or committing to make, full restitution.

Proposed Amendment

Option 1 (Sentencing Table

Amendment)

The Sentencing Table in Chapter Five,

Part A, is amended by increasing Zone

B by two levels in Criminal History

Category I (so that Zone B contains

offense levels 9, 10, 11, and 12 in

Criminal History Category I); by

increasing Zone B by two levels in

Criminal History Category II (so that

Zone B contains offense levels 6, 7, 8,

9, 10, and 11 in Criminal History

Category II); by increasing Zone C by

two levels in Criminal History Category

I (so that Zone C contains offense levels

13, 14, 15, and 16 in Criminal History

Category I); and by increasing Zone C by

two levels in Criminal History Category

II (so that Zone C contains offense levels

12, 13, 14, and 15 in Criminal History

Category II).

Option 2 (Alternative to Sentencing

Table Amendment)

Chapter Five, Part A, is amended by

adding at the end the following:

‘‘§ 5A1.2. Adjustment for Certain Less

Serious Economic Crimes

If each of subsections (a) through (f)

applies, decrease the offense level by 2

levels—

(a) The defendant’s Chapter Two

offense level is determined solely by

applying one or more of the following

offense guidelines in Chapter Two:

(1) §§ 2B1.1, 2B1.3, 2B2.1, 2F1.1,

2N2.1, 2N1.3, 2S1.1, 2S1.2, 2S1.3,

2T1.1, 2T1.4, 2T1.6, 2T1.7, 2T1.8,

2T2.1, 2T2.2, 2T3.1;

(2) § 2X1.1 (if the Chapter Two offense

level for the substantive offense or

offenses is determined solely from a

guideline in subsection (a)(1));

(3) § 2X2.1, § 2X3.1, § 2X4.1 (if the

Chapter Two offense level for the

underlying offense is determined solely

from a guideline in subsection (a)(1));

(4) § 2X5.1 (if the Chapter Two offense

level is determined solely from a

guideline in subsection (a)(1)

determined to be sufficiently

analogous).

(b) The defendant has no criminal

history points;

(c) The defendant did not use

violence or a threat of violence or

possess or use a firearm or other

dangerous weapon;

(d) The offense did not involve bodily

injury or a conscious or reckless risk of

serious bodily injury;

(e) The defendant did not receive an

increase in offense level under any of

the following guideline sections:

(1) § 2B1.1(b)(4)(B)—(b)(7);

(2) § 2F1.1(b)(4)—(b)(8);

(3) § 2S1.1(b)(1);

(4) § 2S1.2(b)(1)(A);

(5) § 2S1.3(b)(1);

(6) § 2T1.1(b)(1) or (b)(2);

(7) § 2T1.4(b)(1) or (b)(2);

(8) Chapter Three, Parts A, B, or C;

(9) § 4B1.3; and

(f) The defendant, prior to sentencing,

(1) voluntarily makes full restitution; or

(2)(A) notifies the government and the

court that the defendant agrees to make

full restitution as determined by the

court, (B) fully cooperates with the

government and the court in

determining the amount of such

restitution; and (C) makes partial

restitution to the extent able to do so.

Commentary

Application Notes:

1. For the purposes of this guideline—

‘Dangerous weapon’ and ‘firearm,’ as

used in subdivision (2), ‘bodily injury,’

‘offense,’ and ‘serious bodily injury,’ are

defined in the Commentary to § 1B1.1

(Application Instructions).

‘Full restitution’ means the amount of

restitution required by law under 18

U.S.C. 3663.

‘No criminal history points,’ means

the defendant has zero criminal history

points as determined under § 4A1.1

(Criminal History Category).

‘Substantive offense’ has the meaning

given that term in § 2X1.1, Application

Note 3.

2. If the Chapter Two offense

guideline for a count is not listed in

subsection (a) above, but the applicable

guideline results in the determination of

the Chapter Two offense level solely by

use of one or more listed guidelines, the

defendant qualifies for a reduction

under this guideline. For example,

where the conduct set forth in a count

of conviction ordinarily referenced to

§ 2E5.3 (an offense guideline not listed

in subsection (a)) establishes § 2F1.1

(Fraud and Deceit) as the applicable

offense guideline (an offense guideline

listed in subsection (a)), this guideline

would apply because the actual offense

level is determined under § 2F1.1

(Fraud and Deceit).’’.

Proposed Amendment: Firearms Table

15. Synopsis of Proposed

Amendment: This proposed amendment

presents two options for implementing

the recommendation of the Bureau of

Alcohol, Tobacco and Firearms (ATF) to

increase the penalties in § 2K2.1

(Unlawful Receipt, Possession or

Transportation of Firearms or

Ammunition) for offenses involving

more than 100 firearms.

Option 1 amends the firearms table in

§ 2K2.1 to provide an additional onelevel increase for offenses that involve

100–199 firearms, and an additional

two-level increase for offenses that

involve more than 200 firearms. The

ATF reports that these increases are

needed to provide adequate and

proportionate punishment in cases that

involve large numbers of firearms.

Under the current table, a defendant

who trafficked in 200 firearms receives

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 8007

the same six-level enhancement as a

defendant who trafficked in 50 firearms.

According to the ATF, from 1995

through 1997, nearly a quarter of all

defendants sentenced under § 2K2.1 for

trafficking more than 50 firearms

received sentences of less than one year,

or no term of imprisonment whatsoever,

despite the encouraged upward

departure provided in Application Note

15 to § 2K2.1.

Option 1 also makes a conforming

change to Application Note 16 regarding

upward departures.

Option 2 amends the table to provide

increases of two level increments and

compresses the table by providing a

wider range for the number of firearms

for each increase. Compressing the table

in this manner diminishes some of the

fact-finding required to determine how

many firearms were involved in the

offense.

Proposed Amendment

Option 1

Section 2K2.1(b)(1)(F) is amended by

striking ‘‘50 or more’’ and inserting ‘‘50–

99’’; and by striking the period at the

end and inserting the following:

‘‘(G)100–199 add 7

(H)200 or more add 8.’’.

The Commentary to § 2K2.1 captioned

‘‘Application Notes’’ is amended in

Note 16 by striking ‘‘significantly’’ and

inserting ‘‘substantially’’; and by

striking ‘‘fifty’’ and inserting ‘‘200’’.

Option 2

Section 2K2.1(b)(1) is amended in the

table by striking subdivisions (A)

through (F) in their entirety and

inserting the following:

‘‘(A) 3–7 add 2

(B) 8–24 add 4

(C) 25–99 add 6

(D) 100–199 add 8

(E) 200 or more add 10.’’.

The Commentary to § 2K2.1 captioned

‘‘Application Notes’’ is amended in

Note 16 by striking ‘‘significantly’’ and

inserting ‘‘substantially’’; and by

striking ‘‘fifty’’ and inserting ‘‘200’’.

Proposed Amendment: Prohibited

Person Definition

16. Synopsis of Proposed

Amendment: This proposed amendment

modifies the definition of ‘‘prohibited

person’’ in §§ 2K1.3 (Unlawful Receipt,

Possession, or Transportation of

Explosive Materials; Prohibited

Transactions Involving Explosive

Materials) and 2K2.1 (Unlawful Receipt,

Possession, or Transportation of

Firearms or Ammunition; Prohibited

Transactions Involving Firearms or

Ammunition) to refer to the relevant

prohibited persons statutes for explosive

and firearm offenses, respectively.

(There is no statutory definition of

‘‘prohibited person’’.) The relevant

statutory provision for § 2K1.3 is 18

U.S.C. 842(i), and for § 2K2.1, the

relevant statutory provisions are 18

U.S.C. 922(g) and (n).

The proposed amendment also

clarifies that the relevant time to

determine whether a person qualifies as

a ‘‘prohibited person’’ is as of the time

the defendant committed the instant

offense. This clarification is consistent

with the proposed amendment on prior

felonies, which provides that increased

base offense levels are only applied if

the defendant committed the instant

offense subsequent to sustaining certain

felony convictions.

Proposed Amendment

Section 2K1.3(a)(1) and (a)(2) are

amended by striking ‘‘; or’’ each place

it appears and inserting a semi-colon.

Section 2K1.3(a) is amended by

striking the text of subdivision (3) in its

entirety and inserting the following:

‘‘16, if the defendant (A) was a

prohibited person at the time the

defendant committed the instant

offense; or (B) knowingly distributed

explosive materials to a prohibited

person; or’’.

The Commentary to § 2K1.3 captioned

‘‘Application Notes’’ is amended by

striking the text of Note 3 in its entirety

and inserting the following:

‘‘For purposes of subsection (a)(3),

‘prohibited person’ means any person

designated in 18 U.S.C. § 842(i).’’.

Sections 2K2.1(a)(1), (a)(2), and (a)(3)

are amended by striking ‘‘; or’’ each

place it appears and inserting a semicolon.

Section 2K2.1(a)(4)(B) is amended by

striking ‘‘is’’ after ‘‘(i)’’ and inserting

‘‘was’’; by inserting ‘‘at the time the

defendant committed the instant

offense’’ after ‘‘prohibited person’’; and

by striking ‘‘or’’ after ‘‘922(d);’’.

Section 2K2.1(a)(5) is amended by

striking ‘‘or’’ after ‘‘§ 922(d);’’.

Section 2K2.1(a)(6) is amended by

striking ‘‘is’’ after ‘‘(A)’’ and inserting

‘‘was’’; by inserting ‘‘at the time the

defendant committed the instant

offense’’ after ‘‘prohibited person’’; and

by striking ‘‘or’’ after ‘‘§ 922(d));’’.

The Commentary to § 2K2.1 captioned

‘‘Application Notes’’ is amended by

striking the text of Note 6 in its entirety

and inserting the following:

‘‘For purposes of subsections (a)(4)(B)

and (a)(6), a ‘prohibited person’ is any

person designated in 18 U.S.C. 922(g) or

922(n).’’.

Proposed Amendment: Prior Felonies

17. Synopsis of Proposed

Amendment: This proposed amendment

resolves a circuit conflict regarding

whether a crime committed after the

commission of the instant offense of

felon in possession of a firearm, but

sentenced before sentencing on the

instant offense, is counted as a ‘‘felony

conviction’’ for purposes of determining

the defendant’s base offense level. The

proposed amendment adopts the

minority view that an offense

committed after the commission of any

part of the offense cannot be counted as

a ‘‘felony conviction’’. Accordingly, the

proposed amendment clarifies, in

§ 2K2.1(a)(1), (a)(2), (a)(3) and (a)(4)(A),

that the instant offense must have been

committed subsequent to sustaining the

prior felony conviction(s). In so doing,

the proposed amendment adopts a rule

that is consistent with the requirements

concerning the use of prior convictions

under §§ 4B1.1 (Career Offender) and

4B1.2 (Definitions of Terms Used in

Section 4B1.1).

The proposed amendment also makes

conforming changes to § 2K1.3

(Unlawful Receipt, Possession, or

Transportation of Explosive Materials;

Prohibited Transactions Involving

Explosive Materials).

Proposed Amendment

Section 2K1.3(a)(1) is amended by

striking ‘‘had at least two prior felony

convictions of either a crime of violence

or a controlled substance offense; or’’

and inserting ‘‘committed any part of

the instant offense subsequent to

sustaining at least two felony

convictions of either a crime of violence

or a controlled substance offense;’’;

Section 2K1.3(a)(2) is amended by

striking ‘‘had one prior felony

conviction of either a crime of violence

or a controlled substance offense; or’’

and inserting ‘‘committed any part of

the instant offense subsequent to

sustaining one felony conviction of

either a crime of violence or a controlled

substance offense;’’.

The Commentary to § 2K1.3 captioned

‘‘Application Notes’’ is amended by

striking the text of Note 2 in its entirety

and inserting the following:

‘‘For purposes of this guideline—

‘Controlled substance offense’ has the

meaning given that term in § 4B1.2(b)

and Application Note 1 of the

Commentary to § 4B1.2 (Definitions of

Terms Used in Section 4B1.1).

‘Crime of violence’ has the meaning

given that term in § 4B1.2(a) and

Application Note 1 of the Commentary

to § 4B1.2 (Definitions of Terms Used in

Section 4B1.1).

8008 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

‘Felony conviction’ means a prior

adult federal or state conviction for an

offense punishable by death or

imprisonment for a term exceeding one

year, regardless of whether such offense

is specifically designated as a felony

and regardless of the actual sentence

imposed. A conviction for an offense

committed at age eighteen or older is an

adult conviction. A conviction for an

offense committed prior to age eighteen

is an adult conviction if it is classified

as an adult conviction under the laws of

the jurisdiction in which the defendant

was convicted (e.g., a federal conviction

for an offense committed prior to the

defendant’s eighteenth birthday is an

adult conviction if the defendant was

expressly proceeded against as an

adult).’’.

The Commentary to § 2K1.3 captioned

‘‘Application Notes’’ is amended in

Note 9 by inserting before the first

paragraph the following:

‘‘For purposes of applying subsection

(a)(1) or (2), use only those felony

convictions that receive criminal history

points under § 4A1.1(a), (b), or (c). In

addition, for purposes of applying

subsection (a)(1), use only those felony

convictions that are counted separately

under § 4A1.1(a), (b), or (c). See

§ 4A1.2(a)(2); § 4A1.2, comment. (n.3).’’.

Section 2K2.1(a)(1) is amended by

striking ‘‘had at least two prior felony

convictions of either a crime of violence

or a controlled substance offense; or’’

and inserting ‘‘committed any part of

the instant offense subsequent to

sustaining at least two felony

convictions of either a crime of violence

or a controlled substance offense;’’.

Section 2K2.1(a)(2) is amended by

striking ‘‘had at least two prior felony

convictions of either a crime of violence

or a controlled substance offense; or’’

and inserting ‘‘committed any part of

the instant offense subsequent to

sustaining at least two felony

convictions of either a crime of violence

or a controlled substance offense;’’.

Section 2K2.1(a)(3) is amended by

striking ‘‘had one prior felony

conviction of either a crime of violence

or controlled substance offense; or’’ and

inserting ‘‘committed any part of the

instant offense subsequent to sustaining

one felony conviction of either a crime

of violence or a controlled substance

offense;’’.

Section 2K2.1(a)(4)(A) is amended by

striking ‘‘had one prior felony

conviction of either a crime of violence

or controlled substance offense’’ and

inserting ‘‘committed any part of the

instant offense subsequent to sustaining

one felony conviction of either a crime

of violence or a controlled substance

offense; or’’.

Section 2K2.1(a) is amended in

subdivision (4)(B) by striking ‘‘; or’’ after

‘‘922(d)’’ and inserting a semi-colon; in

subdivision (5), by striking the ‘‘; or’’

after ‘‘921(a)(30)’’ and inserting a semicolon; and in subdivision (6) by striking

‘‘; or’’ after ‘‘§ 922(d)’’ and inserting a

semi-colon.

The Commentary to § 2K2.1 captioned

‘‘Application Notes’’ is amended by

striking Note 5 in its entirety and

inserting the following:

‘‘5. For purposes of this guideline—

‘Controlled substance offense’ has the

meaning given that term in § 4B1.2(b)

and Application Note 1 of the

Commentary to § 4B1.2 (Definitions of

Terms Used in Section 4B1.1).

‘Crime of violence’ has the meaning

given that term in § 4B1.2(a) and

Application Note 1 of the Commentary

to § 4B1.2 (Definitions of Terms Used in

Section 4B1.1).

‘Felony conviction’ means a prior

adult federal or state conviction for an

offense punishable by death or

imprisonment for a term exceeding one

year, regardless of whether such offense

is specifically designated as a felony

and regardless of the actual sentence

imposed. A conviction for an offense

committed at age eighteen or older is an

adult conviction. A conviction for an

offense committed prior to age eighteen

is an adult conviction if it is classified

as an adult conviction under the laws of

the jurisdiction in which the defendant

was convicted (e.g., a federal conviction

for an offense committed prior to the

defendant’s eighteenth birthday is an

adult conviction if the defendant was

expressly proceeded against as an

adult).’’.

The Commentary to § 2K2.1 captioned

‘‘Application Notes’’ is amended in

Note 15 by inserting before the first

paragraph the following:

‘‘For purposes of applying subsection

(a)(1), (2), (3), or (4)(A), use only those

felony convictions that receive criminal

history points under § 4A1.1(a), (b), or

(c). In addition, for purposes of applying

subsection (a)(1) and (a)(2), use only

those felony convictions that are

counted separately under § 4A1.1(a), (b),

or (c). See § 4A1.2(a)(2); § 4A1.2,

comment. (n.3).’’.

Proposed Amendment: Immigration

18. Synopsis of Proposed

Amendment: This amendment modifies

§ 2L1.2(b)(1) (Unlawful Entering or

Remaining in the United States) to

provide more graduated sentencing

enhancements based on the seriousness

of the prior aggravated felony

conviction. Subsection (b)(1)(A)

currently provides a 16-level

enhancement if the defendant was

previously deported after a criminal

conviction, and the conviction was for

an aggravated felony.

The Commission has received

comment that § 2L1.2 often results in

offense levels that are disproportionate

to the seriousness of the prior

aggravated felony conviction. This

occurs for two primary reasons. First, 8

U.S.C. 1101(a)(43) and, by reference,

§ 2L1.2, defines aggravated felony very

broadly. Second, subsection (b)(1)

neither distinguishes among the many

types of aggravated felonies for purposes

of triggering the 16-level enhancement,

nor provides for smaller increases for

less serious aggravated felonies.

The proposed amendment is intended

to achieve more proportionate

punishment by providing tiered

sentencing enhancements based on the

period of imprisonment the defendant

actually served for the prior aggravated

felony. In addition, the amendment

contains two options for providing

increased punishment for the most

serious aggravated felonies. Under

Option One, the 16-level enhancement

would be triggered not only by the

period of imprisonment actually served

but also by all aggravated felonies

involving death, serious bodily injury,

the discharge or other use of a firearm

or dangerous weapon, or a serious drug

trafficking offense, regardless of the

period of imprisonment actually served

by the defendant. Alternatively, Option

Two would encourage an upward

departure in such cases, which could

result in an increase greater than the 16-

level enhancement for these most

serious aggravated felonies.

The Commission invites comment as

to whether the 16-level enhancement

provided by subsection (b)(1) should be

graduated on some basis other than

period of imprisonment actually served,

perhaps by extending the approach

taken by Option 1 throughout the other

tiers. In addition, the Commission

invites comment as to whether

aggravated felonies that were committed

beyond a certain number of years prior

to the instant offense should not count

for purposes of triggering subsection

(b)(1).

Proposed Amendment

Chapter Two, Part L, Subpart 1, is

amended by striking § 2L1.2 in its

entirety and inserting the following:

‘‘§ 2L1.2. Unlawfully Entering or

Remaining in the United States

(a) Base Offense Level: 8.

(b) Specific Offense Characteristic.

(1) If the defendant previously was

deported after a criminal conviction, or

if the defendant unlawfully remained in

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 8009

the United States following a removal

order issued after a criminal conviction,

increase as follows (if more than one

applies, apply the greater):

(A) If the conviction was for an

aggravated felony; and—

(i) (I) The defendant actually served a

period of imprisonment of at least ten

years for such conviction [Option 1: or

(II) The aggravated felony involved

death, serious bodily injury, the

discharge or other use of a firearm or

dangerous weapon, or a serious drug

trafficking offense],

increase by 16 levels;

(ii) The defendant actually served a

period of imprisonment of at least five

years but less than ten years, increase by

[10][12] levels;

(iii) The defendant actually served a

period of imprisonment of at least two

years but less than five years, increase

by [8] levels; or

(iv)(I) The defendant actually served a

period of imprisonment of less than two

years, or (II) the sentence imposed was

only a term of probation or other

sentence alternative to a term of

imprisonment, or a combination of

probation and other sentence alternative

to a term of imprisonment, increase by

[6] levels.

(B) If the conviction was for (i) any

felony other than an aggravated felony;

or (ii) three or more misdemeanors that

are crimes of violence or controlled

substance offenses, increase by 4 levels.

Commentary

Statutory Provisions: 8 U.S.C.

§ 1325(a) (second or subsequent offense

only), 8 U.S.C. 1326. For additional

statutory provision(s), see Appendix A

(Statutory Index).

Application Notes:

‘‘1. Definitions.—For purposes of this

guideline:

‘Aggravated felony’ has the meaning

given that term in 8 U.S.C. 1101(a)(43)

without regard to the date of conviction

of the aggravated felony.

‘Controlled substance offense’—

(A) Means an offense under federal or

state law that prohibits the manufacture,

import, export, distribution, or

dispensing of a controlled substance (or

a counterfeit substance) or the

possession of a controlled substance (or

a counterfeit substance) with intent to

manufacture, import, export, distribute,

or dispense; and

(B) Includes—

(i) Unlawfully possessing a listed

chemical with intent to manufacture a

controlled substance (see 21 U.S.C.

841(d)(1));

(ii) Unlawfully possessing a

prohibited flask or equipment with

intent to manufacture a controlled

substance (see 21 U.S.C. 843(a)(6));

(iii) Maintaining any place for the

purpose of facilitating an offense

described in subdivision (A) (see 21

U.S.C. 856);

(iv) Using a communications facility

in committing, causing, or facilitating an

offense described in subdivision (A) (see

21 U.S.C. 843(b)); and

(v) The offenses of aiding and

abetting, conspiring, and attempting to

commit any offense described in

subdivision (A) or (B)(i), (ii), (iii), or (iv).

‘Felony’ means any federal, state, or

local offense punishable by

imprisonment for a term exceeding one

year.

‘Misdemeanor’ means any federal,

state, or local offense punishable by

imprisonment for a term of

imprisonment of one year or less.

‘Serious bodily injury’ has the

meaning given that term in Application

Note 1 of the Commentary to § 1B1.1

(Application Instructions).

‘Serious drug trafficking offense’ has

the meaning given that term in

Application Note 1 of the Commentary

to § 5K2.20 (Aberrant Behavior).

2. Application of Subsection (b)(1).—

For purposes of subsection (b)(1):

(A) A defendant shall be considered

to be deported if the defendant has been

removed or has departed the United

States while an order of exclusion,

deportation, or removal was

outstanding.

(B) A defendant shall be considered to

be deported after a conviction if the

deportation was subsequent to the

conviction, whether or not the

deportation was in response to such

conviction.

(C) A defendant shall be considered to

have remained in the United States

following a removal order issued after a

conviction if the removal order was

subsequent to the conviction, whether

or not the removal order was in

response to such conviction.

(D) The period of imprisonment that

the defendant actually served for the

aggravated felony includes, in the case

of a defendant who escaped from

imprisonment, time the defendant

would have served if the defendant had

not escaped.

3. Computation of Criminal History

Points.—Prior felony and misdemeanor

convictions taken into account under

subsection (b) also are counted for

purposes of determining criminal

history points pursuant to Chapter Four,

Part A (Criminal History).

4. Departure Provisions.—

[Option Two:

(A) Upward Departure Provisions.—

There may be cases in which subsection

(b)(1) applies but the applicable

enhancement understates the

seriousness of the aggravated felony

taken into account under that

subsection. In such cases, an upward

departure may be warranted. For

example an upward departure may be

warranted if the aggravated felony

involved any of the following:

(i) Serious bodily injury, as defined in

Application Note 1 of the Commentary

to § 1B1.1 (Application Instructions), or

death.

(ii) The discharge or other use of a

firearm or a dangerous weapon.

(iii) A serious drug trafficking offense,

as defined in Application Note 1 of the

Commentary to § 5K2.20 (Aberrant

Behavior).]

(B) Downward Departure

Provisions.—A downward departure

may be warranted in a case in which the

defendant was not advised, at the time

the defendant previously was deported

or removed, of the criminal

consequences of reentry after

deportation or removal.’’.

Issues for Comment: The Commission

invites comment regarding whether the

enhancement in § 2L1.2(b)(1) for a

previous conviction for an aggravated

felony should be graduated based on a

factor other than, or in addition to, the

period of imprisonment the defendant

actually served for the aggravated

felony. Should the enhancement be

graduated based on the type of

aggravated felony involved? For

example, should the approach of Option

One for subsection (b)(1)(A)(i) be

extended to subdivisions (ii) through

(iv) of subsection (b)(1)?

The Commission also invites

comment on whether the enhancement

in § 2L1.2(b)(1) for a previous

conviction for an aggravated felony

should take into consideration only

aggravated felonies that were committed

within a specified time period, e.g.,

fifteen years, or the counting rules

provided by § 4A1.2 (Definitions and

Instructions for Computing Criminal

History).

Proposed Amendment: Nuclear,

Biological, and Chemical Weapons

19. Synopsis of Proposed

Amendment: This is a two-part

amendment.

First, in response to the sense of

Congress contained in section 1423(a) of

the National Defense Authorization Act

for Fiscal Year 1997 that guideline

penalties are inadequate for certain

offenses involving the importation,

attempted importation, exportation, and

attempted exportation of nuclear,

chemical, and biological weapons,

materials, or technologies, the proposed

8010 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

amendment increases by four levels the

base offense levels in §§ 2M5.1 (the

guideline covering the evasion of export

controls) and 2M5.2 (the guideline

covering the exportation of arms,

munitions, and military equipment

without a license). A four-level increase

is proposed for those offenses in

subsection (a)(1) of both §§ 2M5.1 and

2M5.2 to make the penalty structure for

those offenses proportional to other

national security guidelines in Chapter

Two, Part M. In addition, the Statutory

Index is proposed to be amended to

refer one of the offenses, 50 U.S.C. 1701

(which currently is not referenced in the

Statutory Index), to both §§ 2M5.1 and

2M5.2.

Second, the proposed amendment

substantially revises § 2M6.1 (the

guideline covering the unlawful

acquisition, alteration, use, transfer, or

possession of nuclear material,

weapons, or facilities) in order to

incorporate into that guideline two

relatively new offenses, 18 U.S.C. 175,

relating to biological weapons, and 18

U.S.C. 229, relating to chemical

weapons. Specifically, the amendment

proposes to modify § 2M6.1 in the

following ways:

(1) It provides two alternative base

offense levels. The first base offense

level of level 42 applies if the offense

was committed with the intent to injure

the United States or to aid a foreign

government or foreign terrorist

organization. This incorporates into the

base offense level the 12-level

enhancement currently found in the

guideline for such intent and does not

change the overall offense level for these

offenses. ‘‘Foreign terrorist

organizations’’ are added because

Congress has found that such groups are

investing in the acquisition of

unconventional weapons such as

nuclear, biological, and chemical agents.

It is anticipated that this base offense

level will apply to cases as apparently

originally contemplated by the

guideline, i.e., the acquisition of nuclear

material from defense, or even civilian,

nuclear facilities in order to assist

foreign governments, thereby creating a

threat to the national security, as well as

to cases that implicate the national

security but involve biological and

chemical weapons.

The proposed amendment provides

that, if the base offense level of level 42

applies, none of the adjustments in

subsection (b) shall apply. This is

intended to cap the very high offense

level attendant to this base offense level

and also to preclude the possibility of a

downward adjustment if the offense

involved only a threat. However, if

death results, the cross reference allows

for the possibility of a higher offense

level through application of the first

degree murder guideline.

It is anticipated that the second base

offense level, of level [28][30], will

apply in most cases, specifically those

cases that do not threaten the national

security of the United States.

(2) It provides a six-level decrease, in

subsection (b)(1), if the offense involved

only a threat to use a nuclear, biological,

or chemical weapon or material, and

there was no conduct evidencing an

intent to carry out the threat. After

review of the cases and meeting with

representatives of the Department of

Justice and the Federal Bureau of

Investigations, it became apparent that

the least culpable offenders, and the

least serious of these offenses, are those

that involve non-credible threats. The

extent of the adjustment (i.e., six levels)

mirrors in reverse the six-level increase

in the threatening communications

guideline, § 2A6.1, if the conduct

involved an actual intent to carry out

the threat.

(3) It provides, in brackets, a two-level

enhancement, in subsection (b)(2), if the

offense involved particularly dangerous

types of nuclear, chemical, and

biological weapons and materials. Those

weapons and materials are defined in

the guideline commentary by reference

to the applicable statutory and

regulatory provisions. This

enhancement acknowledges the

distinctions already made in

international treaties, provisions of title

18, United States Code, the relevant

regulatory schemes, and by

representatives of the Department of

Justice and the Federal Bureau of

Investigations, that certain types of

weapons and materials are inherently

more lethal and pose a greater threat to

the public safety.

(4) It provides an enhancement, in

subsection (b)(3), if any victim sustained

serious bodily injury or death. This

enhancement is modeled after the

enhancement found in § 2N1.1, the

guideline covering tampering with

consumer products. Like that guideline,

the amendment provides commentary

(in the background) stating that the base

offense level reflects that the offense

typically will involve a risk of serious

bodily injury or death or will cause or

intend to cause bodily injury.

(5) It provides two options for cases

involving a substantial disruption of

public, governmental, or business

functions or services, or the substantial

expenditure of funds for clean up and

decontamination efforts. Option One

provides for a four-level enhancement

in such cases. Option Two provides for

an upward departure provision.

(6) It provides two cross references, if

the resulting offense level is greater, if

death resulted (in which case the first or

second degree murder guideline would

apply) or if the offense was tantamount

to attempted murder (in which case the

attempted murder guideline would

apply). These cross references are also

modeled after cross references found in

§ 2N1.1, the guideline for tampering

with consumer products.

(7) It provides a special instruction

that if the defendant is convicted of one

count involving the death of, serious

bodily injury to, or attempted murder of,

more than one victim, the grouping

rules will be applied as if the defendant

had been convicted of separate counts

for each such victim.

(8) It amends the Statutory Index to

refer 18 U.S.C. 175 and 229 to § 2M6.1

and to delete a number of guideline

references for 18 U.S.C. 2332a and

instead provide a reference for that

offense to §§ 2K1.4 (in the case of

weapons of mass destruction that are

explosive devices and 2M6.1 (in the

case of other weapons of mass

destruction).

Three issues for comment follow the

proposed amendment.

Proposed Amendment

Section 2M5.1 is amended by striking

subsection (a) in its entirety and

inserting the following:

‘‘(a) Base Offense Level (Apply the

greater):

(1) [26,] if national security controls

or controls relating to the proliferation

of nuclear, biological, or chemical

weapons or materials were evaded; or

(2) 14, otherwise.’’.

Section 2M5.2(a)(1) is amended by

striking ‘‘22’’ and inserting ‘‘[26]’’.

The heading to Chapter Two, Part M,

is amended by adding at the end ‘‘And

Weapons of Mass Destruction’’.

The heading to Chapter Two, Part M,

Subpart 6, is amended by striking

‘‘Atomic Energy’’ and inserting ‘‘

Nuclear, Biological, And Chemical

Weapons And Materials, And Other

Weapons of Mass Destruction’’.

Chapter Two, Part M, is amended by

striking § 2M6.1 in its entirety and

inserting the following:

‘‘§ 2M6.1. Unlawful Production,

Development, Acquisition, Stockpiling,

Alteration, Use, Transfer, or Possession

of Nuclear Material, Weapons, or

Facilities, Biological Agents, Chemical

Weapons, or Other Weapons of Mass

Destruction

(a) Base Offense Level:

(1) [42], if the offense was committed

with intent (A) to injure the United

States; or (B) to aid a foreign nation or

a foreign terrorist organization; or

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 8011

(2) [28][30], otherwise.

(b) Specific Offense Characteristics:

If subsection (a)(2) applies, and:

(1) If the offense (A) involved a threat

to use a nuclear weapon, nuclear

material, nuclear byproduct material,

biological agent, chemical weapon, or

other weapon of mass destruction; and

(B) did not involve any conduct

evidencing an intent or ability to carry

out the threat, decrease by [6] levels.

[(2) If the offense involved (A) a select

biological agent; (B) a listed precursor or

a listed toxic chemical; (C) nuclear

material or nuclear byproduct material;

or (D) a weapon of mass destruction that

contains any agent, precursor, toxic

chemical, or material referred to in

subdivision (A), (B), or (C), increase by

[2] levels.]

(3) If (A) any victim sustained

permanent or life-threatening bodily

injury, increase by 4 levels; (B) any

victim sustained serious bodily injury,

increase by 2 levels; or (C) the degree of

injury is between that specified in

subdivisions (A) and (B), increase by 3

levels.

[Option One: (4) If the offense

resulted in (A) substantial disruption of

public, governmental, or business

functions or services; or (B) a substantial

expenditure of funds to clean up,

decontaminate, or otherwise respond to

the offense, increase by [4] levels.]

(c) Cross References:

(1) If the offense resulted in death,

apply § 2A1.1 (First Degree Murder) if

the death was caused intentionally or

knowingly, or § 2A1.2 (Second Degree

Murder) in any other case, if the

resulting offense level is greater than

that determined above.

(2) If the offense was tantamount to

attempted murder, apply § 2A2.1

(Assault with Intent to Commit Murder;

Attempted Murder), if the resulting

offense level is greater than that

determined above.

(d) Special Instruction:

(1) If the defendant is convicted of a

single count involving (A) the death or

permanent, life-threatening, or serious

bodily injury of more than one victim,

or (B) conduct tantamount to the

attempted murder of more than one

victim, Chapter Three, Part D (Multiple

Counts), shall be applied as if the

defendant had been convicted of a

separate count for each such victim.

Commentary

Statutory Provisions: 18 U.S.C. §§ 175,

229, 831, 2332a (only with respect to

weapons of mass destruction as defined

in 18 U.S.C. § 2332a(c)(2)(B), (C), and

(D)); 42 U.S.C. §§ 2077(b), 2122, 2131.

For additional statutory provision(s), see

Appendix A (Statutory Index).

Application Notes:

‘‘1. Definitions.—For purposes of this

guideline:

Biological agent has the meaning

given that term in 18 U.S.C. 178(1).

Chemical weapon has the meaning

given that term in 18 U.S.C. 229F(1).

Foreign terrorist organization (A)

means an organization that engages in

terrorist activity that threatens the

security of a national of the United

States or the national security of the

United States; and (B) includes an

organization designated by the Secretary

of State as a foreign terrorist

organization pursuant to section 219 of

the Immigration and Nationality Act (8

U.S.C. 1219). National of the United

States has the meaning given that term

in section 101(a)(22) of the Immigration

and Nationality Act (8 U.S.C.

1101(a)(22)).

Listed precursor or listed toxic

chemical means a precursor or toxic

chemical, respectively, listed in

Schedule I of the Annex on Chemicals

to the Chemical Weapons Convention.

See 18 U.S.C. 229F(6)(B), (8)(B).

Precursor has the meaning given that

term in 18 U.S.C. 229F(6)(A). Toxic

chemical has the meaning given that

term in 18 U.S.C. 229F(8)(A).

Nuclear byproduct material has the

meaning given that term in 18 U.S.C.

831(f)(2).

Nuclear material has the meaning

given that term in 18 U.S.C. 831(f)(1).

Select biological agent means a

biological agent or toxin identified by

the Secretary of Health and Human

Services on the select agent list

established pursuant to section 511(d) of

the Antiterrorism and Effective Death

Penalty Act, Pub. L. 104–132. See 42

CFR part 62. Toxin has the meaning

given that term in 18 U.S.C. 178(2).

Weapon of mass destruction (A) has

the meaning given that term in 18 U.S.C.

§ 2332a(c)(2)(B), (C), and (D); and (B)

includes any radiological dispersal

device, regardless of whether the

radioactive material contained in that

radiological dispersal device was

nuclear material, nuclear byproduct

material, or other radioactive material

(such as low-grade medical, industrial,

or research radioactive waste).

Radiological dispersal device means any

device, including any weapon or

equipment, other than a nuclear

explosion, specifically designed to

disseminate radioactive material in

order to cause property destruction,

damage, or bodily injury by means of

the radiation produced by the decay of

the radioactive material.

2. Inapplicability of Subsection (b) to

Subsection (a)(1) Cases.—If subsection

(a)(1) applies, do not apply subsection

(b).

3. Applicability of Subsections (b)(2)

and (b)(4) in Threat Cases.—The

application of subsection (b)(1) in a case

involving a threat shall not preclude the

application of either subsection (b)(2) or

subsection (b)(4) in such a case.

4. Application of Special

Instruction.—Subsection (d) applies in

any case in which the defendant is

convicted of a single count involving

(A) the death or permanent, lifethreatening, or serious bodily injury of

more than one victim; or (B) conduct

tantamount to the attempted murder of

more than one victim, regardless of

whether the offense level is determined

under subsection (a), subsections (a) and

(b), or subsection (c).

5. Inapplicability of § 3A1.4 in Certain

Cases.—If subsection (a)(1) applies

because the offense was committed with

the intent to aid an international foreign

terrorist organization, do not apply

§ 3A1.4 (Terrorism).

6. Departure Provisions.—

(A) Upward Departure Provisions.—

There may be cases in which the offense

level determined above substantially

understates the seriousness of the

offense. In such cases, an upward

departure may be warranted. The

following is a non-exhaustive list of

circumstances in which an upward

departure may be warranted:

(i) The offense posed a substantial risk

of death or serious bodily injury to

numerous victims (e.g., chlorine gas was

released in a crowded movie theater).

(ii) The offense caused extreme

psychological injury. See § 5K2.3

(Extreme Psychological Injury).

(iii) The offense caused substantial

property damage or monetary loss. See

§ 5K2.5 (Property Damage or Loss).

[Option Two: (iv) The offense resulted

in substantial disruption of public,

governmental, or business functions or

services, or the response to the offense

required a substantial expenditure (e.g.,

to provide environmental

decontamination of the affected area).

See, e.g., § 5K2.7 (Disruption of

Governmental Function).]

(B) Downward Departure Provision.—

There may be cases in which the offense

level determined above substantially

overstates the seriousness of the offense.

In such cases, a downward departure

may be warranted. For example, in the

unusual case in which the offense did

not cause a risk of death or serious

bodily injury, and neither caused nor

was intended to cause bodily injury, a

downward departure may be warranted.

Background: The base offense level

reflects that this offense typically poses

a risk of death or serious bodily injury

8012 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

to one or more victims; or causes, or is

intended to cause, bodily injury.’’.

Appendix A (Statutory Index) is

amended by inserting after the line

referenced to ‘‘18 U.S.C. § 155’’ the

following:

‘‘18 U.S.C. § 1752M6.1’’.

Appendix A (Statutory Index) is

amended by inserting after the line

referenced to ‘‘18 U.S.C. 228’’ the

following:

‘‘18 U.S.C. § 2292M6.1’’.

Appendix A (Statutory Index) is

amended in the line referenced to 18

U.S.C. 2332a by striking ‘‘2A1.1, 2A1.2,

2A1.3, 2A1.4, 2A1.5, 2A2.1, 2A2.2,

2B1.3,’’ and by inserting ‘‘, 2M6.1’’ after

‘‘2K1.4’’.

Appendix A (Statutory Index) is

amended by inserting after the line

referenced to ‘‘50 U.S.C. App. 462’’ the

following:

‘‘50 U.S.C. App. § 1701 2M5.1,

2M5.2’’.

Issues for Comment

(1) The Commission invites comment

on whether the above proposal

appropriately addresses the offenses in

18 U.S.C. 175, relating to biological

weapons, and in 18 U.S.C. 229, relating

to chemical weapons. Specifically, are

these offenses more appropriately

addressed through a guideline that

incorporates into the base offense level

any or all of the aggravating factors that

may be associated with these offenses

(e.g., the inherent psychological harm,

the risk of bodily harm, and the

economic harm associated with cleanup

and decontamination efforts), or is it

preferable to address these harms as

specific offense characteristics?

(2) The Commission also invites

comment on how threats to use nuclear,

biological, or chemical weapons should

be punished under the guidelines.

Should there be a greater differentiation

in punishment under proposed § 2M6.1

between offenses that involve only the

threatened use of such weapons

(whether or not the defendant engaged

in conduct evidencing an intent or

ability to carry out the threat) and other

conduct punished under that guideline?

Alternatively, should the threatened use

of such weapons be punished under

§ 2A6.1 (Threatening or Harassing

Communications), and if so, how

severely should such conduct be

punished in relation to other types of

threats punished under that guideline?

(3) How should attempts,

conspiracies, and solicitations to

commit an offense under 18 U.S.C. 175

or 229 be covered under the guidelines?

Should such attempts, conspiracies, and

solicitations be expressly covered by the

proposed new guideline, § 2M6.1, or

should § 2X1.1 (Attempt, Solicitation, or

Conspiracy) apply?

Proposed Amendment: Money

Laundering

20. Synopsis of Proposed

Amendment:

Overview

The proposed amendment

consolidates the two current money

laundering guidelines, §§ 2S1.1 and

2S1.2, and applies to convictions under

either 18 U.S.C. 1956 or 1957. The

primary feature of the consolidated

amendment structure is that it ties

offense levels for money laundering

more closely to the underlying criminal

conduct that was the source of the

criminally derived funds. The

amendment accomplishes this objective

by separating money laundering

offenders, regardless of the statute of

conviction, into two categories for

purposes of determining the base

offense level. The base offense level is

determined differently, depending on

whether the defendant is a ‘‘direct’’ or

a ‘‘third party’’ money launderer (money

launderers who commit the underlying

offense which generated the criminal

proceeds versus money launderers who

did not commit the underlying offense).

Specific offense characteristics are

included in this proposed amendment

to increase the total offense level in

order to assure greater punishment for

those money laundering defendants

whose conduct is considered more

serious and harmful to the societal

interests which the money laundering

laws are designed to protect.

Base Offense Level

Subsection (a) provides two distinct

methods for determining the base

offense level, depending on whether the

defendant is a ‘‘direct’’ money launderer

or a ‘‘third party’’ money launderer.

Subsection (a)(1) sets the base offense

level for ‘‘direct’’ money launderers at

the offense level for the underlying

offense from which the laundered funds

were derived (i.e., the base offense level

and all applicable specific offense

characteristics for the underlying

offense), if the offense level for the

underlying offense can be determined.

A data analysis of a representative

sample of 259 money laundering cases

conducted by the Commission indicated

that subsection (a)(1) would apply to 86

percent of defendants sentenced under

the guideline (i.e., ‘‘direct’’ money

launderers comprise 86 percent of the

money laundering defendants).

This proposed amendment excludes

from application of subsection (a)(1)

offenders who otherwise would be

accountable for the underlying offense

solely on the basis of § 1B1.3(a)(1)(B)

(i.e., jointly undertaken criminal

activity). However, this limitation has

minimal practical consequence.

Commission data indicate that less than

one percent of defendants who would

not be categorized as ‘‘direct’’ money

launderers because of this limitation

would be subject to subsection (a)(1) if

it were expanded to include defendants

who would be otherwise accountable for

the underlying offense under

§ 1B1.3(a)(1)(B). The Commission

invites comment as to whether

application of subsection (a)(1) should

be expanded to include offenders who

otherwise would be accountable for the

underlying offense solely on the basis of

§ 1B1.3(a)(1)(B).

For ‘‘third party’’ money launderers

(i.e., defendants who did not commit or

would not be accountable for the

underlying offense under

§ 1B1.3(a)(1)(A)), subsection (a)(2) sets

the base offense level at level eight, plus

an increase based on the value of the

laundered funds from the table in

subsection (b)(1) of § 2F1.1 (Fraud and

Deceit). Subsection (a)(2) also applies to

‘‘direct’’ money laundering defendants

for whom subsection (a)(1) would apply

but the offense level for the underlying

offense is impossible or impracticable to

determine.

Under the structure of this proposed

amendment, there may be some cases in

which the ‘‘third party’’ money

launderers will receive a higher base

offense level than the offenders who

committed the underlying offense. This

conceivably could occur in cases in

which the underlying offense that

generated the criminally derived

proceeds is a fraud or other economic

crime covered by a guideline that uses

the table in subsection (b)(1) of § 2F1.1,

and the loss calculation is less than the

value of the laundered funds. For

example, the underlying offense may

have involved the fraudulent sale of

stock for $200,000 that was worth

$180,000. The defendant did not

commit the underlying offense, but

laundered all of the $200,000. In such

a case, the value of the laundered funds

is $200,000, but the loss amount for

purposes of § 2F1.1(b)(1) is $20,000. In

such a case, the ‘‘third party’’ money

laundering defendant may receive a

higher base offense level than the

Chapter Two offense level for the

offender who committed the fraud.

Three options in Application Note 3

are presented for addressing this type of

case. Option 1 provides that a

downward departure may be warranted

in such a case, but limits the extent of

such a departure to the offense level for

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 8013

the underlying offense conduct that

would result if the base offense level

were determined using subsection (a)(1).

Option 2 creates a rule that the value of

the funds is the lesser of either the

actual value of the laundered funds or

the value of the loss as calculated for

purposes of § 2F1.1(b)(1). Option 3

provides no specific provision to

address this type of case.

An analysis conducted by the

Commission indicates that this type of

case will rarely occur. In its sample of

259 cases, Commission identified no

cases in which the loss amount was less

than the value of laundered funds. In

fact, this issue can arise only in ‘‘third

party’’ money laundering cases, which

comprise only 14 percent (36 of 259

cases) of the money laundering cases in

the representative sample. Furthermore,

in the overwhelming majority—89

percent—of those 36 ‘‘third party’’

cases, the underlying offense was a drug

offense, which does not give rise to this

problem. In its sample, the Commission

identified only three ‘‘third party’’

money laundering cases for which the

underlying offense was a fraud or other

economic crime.

Adjustments

In addition to the base offense level,

the proposed amendment contains a

number of adjustments. Consistent with

the approach of tying the base offense

level to the underlying offense that

generated the criminally derived funds,

subsection (b)(1) provides a [2][4][6]

level enhancement for ‘‘third party’’

money launderers who know or believe

that any of the laundered funds were the

proceeds of, or were intended to

promote, certain types of more serious

underlying criminal conduct;

specifically, drug trafficking, crimes of

violence, offenses involving firearms,

explosives, national security, terrorism,

and the sexual exploitation of a minor.

Subsection (b)(2) provides four

alternative enhancements, with the

greatest applicable enhancement to be

applied. Subsection (b)(2)(A) provides a

[2][3][4] level increase if the defendant

is a ‘‘third party’’ money launderer who

is ‘‘in the business’’ of laundering funds.

This adjustment reflects the view that,

similar to a professional ‘‘fence’’ (see

§ 2B1.1(b)(4)(B)), defendants who

routinely engage in laundering funds on

behalf of third parties and who gain

financially from engaging in such

transactions warrant additional

punishment because they encourage the

commission of additional underlying

criminal offenses. Application Note 6

directs the court to consider the totality

of the circumstances in determining

whether a defendant was in the business

of laundering funds and provides a nonexhaustive list of factors to be

considered in making this

determination. The Commission invites

comment as to whether eligibility for

this enhancement should be expanded

to include ‘‘direct’’ money launderers

who launder the criminal derived

proceeds of others, in addition to their

own criminally derived proceeds.

Subsection (b)(2)(B) provides a [2][3]

level enhancement if any of the

laundered funds were used [or intended

to be used] to [significantly] [materially]

promote further criminal conduct.

Application Note 5 limits applicability

of this enhancement to the use of

laundered funds to further criminal

conduct in addition to, or beyond, the

criminal conduct from which the

laundered funds were derived, as

opposed to underlying offenses that

were completed at the time of the

laundering. This enhancement attempts

to provide increased punishment for

two types of offense conduct: (1) Cases

in which the defendant uses criminally

derived funds to cause criminal conduct

in addition to or beyond the criminal

conduct that initially generated the

criminally derived funds that are the

subject of the money laundering

conviction; or (2) cases in which the

defendant reinvests all or some of the

laundered funds back into an ongoing

criminal scheme to finance the

continued operation or expansion of the

criminal scheme.

Subsection (b)(2)(C) provides a [2][3]

level enhancement if the offense

involved ‘‘sophisticated concealment.’’

Application Note 6 defines

‘‘sophisticated concealment’’ as

especially complex or especially

intricate offense conduct where the

defendant takes deliberate steps to

conceal the nature, location, source,

ownership, or control of the criminally

derived funds to make the transaction

more difficult to detect. Application

Note 6 also provides examples of

conduct that typically constitutes

sophisticated concealment. The

Commission invites comment as to

whether the applicability of this

enhancement should be expanded to

include all forms of concealment, even

if the concealment is not sophisticated.

Subsection (b)(2)(D) provides a [1][2]

level enhancement if the defendant

launders funds with the intent to engage

in conduct constituting a violation of

section 7201 or 7206 of the Internal

Revenue Code (title 26, United States

Code). A conviction under the relevant

subsection of 18 U.S.C. 1956 is required

for the enhancement to apply. The

Commission invites comment as to

whether the proposed guideline should

include such an enhancement, absent

additional aggravating money

laundering conduct.

Subsection (b)(3) provides a [1] level

increase if the defendant is a ‘‘direct’’

money launderer, none of the

enhancements under subsection (b)(2)

apply, and the value of the laundered

funds is greater than $10,000. This

enhancement is intended to ensure that

defendants who also commit the

underlying offense receive some

incremental punishment for the money

laundering offense, even if ineligible for

any of the other enhancements that

reflect more aggravated money

laundering offense conduct. The

Commission specifically invites

comment as to whether the proposed

guideline should contain such an

enhancement.

Subsection (b)(4) provides a [2] level

decrease for cases in which three

conditions are met: (1) The defendant

did not commit the underlying offense

that generated the criminally derived

funds; (2) the defendant was convicted

under 18 U.S.C. 1957 only; and, (3)

none of the other enhancements apply.

This downward adjustment recognizes

that section 1957 offenses, with no

aggravating factors, may be considered

less serious than section 1956 offenses

because the statutory maximum of the

former is half (10 years) that of the latter

(20 years), and because the government

is not required to prove that the section

1957 defendant knew that the offense

from which the laundered funds were

derived was a specified unlawful

activity (see 18 U.S.C. 1957(c)).

Application Note 7 provides that in a

case in which the defendant is to be

sentenced on a count of conviction for

money laundering and a count of

conviction for the underlying offense

that generated the laundered funds,

such counts shall be grouped pursuant

to subsection (c) of § 3D1.2 (Groups of

Closely-Related Counts), thereby

resolving a circuit conflict on this issue.

Providing for grouping under § 3D1.2(c)

may make appropriate a conforming

amendment to Application Note 5 of

§ 3D1.2 to provide that grouping under

§ 3D1.2(c) also applies in cases in which

the base offense level from the guideline

applicable to one count specifically

incorporates the offense level applicable

to the other related count. In such cases,

the conduct that forms the basis for the

base offense level in one count is the

same aggravating conduct that forms the

basis for the offense level of the other

count.

The proposed amendment provides

that convictions under 18 U.S.C. 1960

(Illegal Money Transmitting Businesses;

failure to obtain appropriate licenses or

8014 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

comply with registration requirements

for money transmitting businesses) be

referenced to § 2T2.2 (Regulatory

Offenses). The Commission invites

comment as to whether such violations

are more appropriately referenced to

§ 2S1.3 (Structuring Transactions to

Evade Reporting Requirements). Finally,

the proposed amendment provides that

convictions under 31 U.S.C. § 5326

relevant to structuring violations be

referenced to § 2S1.3 (Structuring

Transactions).

Proposed Amendment

Chapter Two, Part S, Subpart 1 is

amended by striking §§ 2S1.1 and 2S1.2

and their accompanying commentary in

their entirety and inserting the

following:

‘‘§ 2S1.1. Laundering of Monetary

Instruments; Engaging in Monetary

Transactions in Property Derived from

Unlawful Activity

(a) Base Offense Level:

(1) The offense level for the

underlying offense from which the

laundered funds were derived, if (A) the

defendant committed the underlying

offense (or otherwise would be

accountable for the underlying offense

under § 1B1.3(a)(1)(A) (Relevant

Conduct)); and (B) the offense level for

that offense can be determined; or

(2) 8 plus the number of offense levels

from the table in subsection (b)(1) of

§ 2F1.1 (Fraud and Deceit)

corresponding to the value of the

laundered funds, otherwise.

(b) Specific Offense Characteristics:

(1) If (A) subsection (a)(2) applies

because the defendant did not commit

the underlying offense; and (B) the

defendant knew or believed that any of

the laundered funds were the proceeds

of, or were intended to promote (i) an

offense involving the manufacture,

importation, or distribution of a

controlled substance or a listed

chemical; (ii) a crime of violence [as

defined under § 4B1.2(a)(1) (Definitions

of Terms Used in § 4B1.1)]; or (iii) an

offense involving firearms, explosives,

national security, terrorism, or the

sexual exploitation of a minor, increase

by [2][4][6] levels.

(2) (Apply the greatest):

(A) If [(i) subsection (a)(2) applies

because the defendant did not commit

the underlying offense; and (ii)] the

defendant was in the business of

laundering funds, increase by [2][3][4]

levels.

(B) If any of the laundered funds were

used [or were intended to be used] to

[significantly] [materially] promote

further criminal conduct, increase by

[2][3] levels.

(C) If the offense involved

sophisticated concealment, increase by

[2][3] levels.

[(D) If the defendant is convicted (A)

under 18 U.S.C. § 1956(a)(1)(A)(ii); (B)

under 18 U.S.C. § 1956(a)(1)(B)(ii); (C)

under 18 U.S.C. § 1956(a)(2)(B)(ii); (D)

under 18 U.S.C. § 1956(a)(3)(C); or (E) of

attempting, aiding or abetting, or

conspiracy to commit any of the

offenses referred to in subdivisions (A)

through (D), increase by [1][2] levels.]

[(3) If (A) subsection (a)(1) applies; (B)

subsection (b)(2) does not apply; and (C)

the value of the laundered funds is

greater than $10,000, increase by [1]

level.]

[(4) If (A) subsection (a)(2) applies

because the defendant did not commit

the underlying offense; (B) the

defendant is convicted under 18 U.S.C.

1957; and (C) none of the enhancements

in subsections (b)(1) and (b)(2) apply,

decrease by [2] levels.]

Commentary

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

1957.

Application Notes:

1. Definitions.—For purposes of this

guideline:

‘Crime of violence’ has the meaning

given that term in subsection (a)(1) of

§ 4B1.2 (Definitions of Terms Used in

§ 4B1.1).

‘Criminally derived funds’ means any

funds derived [or represented to be

derived] from conduct constituting a

criminal offense.

‘Laundered funds’ means the

property, funds, or monetary instrument

involved in the transaction, financial

transaction, monetary transaction,

transportation, transfer, or transmission

in violation of 18 U.S.C. 1956 or 1957.

‘Laundering funds’ means the making

of a transaction, financial transaction,

monetary transaction, or transmission,

or the transporting of, property, funds,

or a monetary instrument in violation of

18 U.S.C. 1956 or 1957.

‘Sexual exploitation of a minor’

means an offense involving (A)

promoting prostitution by a minor; (B)

sexually exploiting a minor by

production of sexually explicit visual or

printed material; (C) distribution of

material involving the sexual

exploitation of a minor, or possession of

material involving the sexual

exploitation of a minor with intent to

distribute; or (D) aggravated sexual

abuse sexual abuse, or abusive sexual

contact, involving a minor. ‘Minor’

means an individual under the age of 18

years.

2. Application of Subsection (a)(1).—

(A) Multiple Underlying Offenses.—In

cases in which subsection (a)(1) applies

and there is more than one underlying

offense, the offense level for the

underlying offense is to be determined

under the procedures set forth in

Application Note 3 of the Commentary

to § 1B1.5 (Interpretation of References

to Other Guidelines).

(B) Defendants Otherwise

Accountable.—In order for subsection

(a)(1) to apply, the defendant must have

committed the underlying offense or be

otherwise accountable for the

underlying offense under

§ 1B1.3(a)(1)(A) (Relevant Conduct). The

fact that the defendant was involved in

laundering criminally derived funds

after the commission of the underlying

offense, without additional involvement

in the underlying offense, does not

establish that the defendant committed,

aided, abetted, counseled, commanded,

induced, procured, or willfully caused

the underlying offense.

(C) Non-Applicability of

Enhancements—If subsection (a)(1)

applies, and the conduct that forms the

basis for an enhancement under the

guideline applicable to the underlying

offense is the only conduct that forms

the basis for application of any of the

enhancements in subsection (b) of this

guideline, do not apply the subsection

(b) enhancement under this guideline.

3. Application of Subsection (a)(2).—

(A) In General.—Subsection (a)(2)

applies to cases in which (A) the

defendant did not commit the

underlying offense; or (B) the defendant

committed the underlying offense (or

otherwise would be accountable for the

underlying offense under subsection

(a)(1)(A) of § 1B1.3 (Relevant Conduct),

but the offense level for the underlying

offense is impossible or impracticable to

determine.

(B) Commingled Funds.—In a case in

which a transaction, financial

transaction, monetary transaction,

transportation, transfer, or transmission

results in the commingling of

legitimately derived funds with

criminally derived funds, the value of

the laundered funds, for purposes of

subsection (a)(2), is the amount of the

criminally derived funds, not the total

amount of the commingled funds, if the

defendant provides sufficient

information to determine the amount of

criminally derived funds without

unduly complicating or prolonging the

sentencing process. If the amount of the

criminally derived funds is difficult or

impracticable to determine, the value of

the laundered funds, for purposes of

subsection (a)(2), is the total amount of

the commingled funds.

[Value of Funds—Option 1:

(C) Value of Laundered Funds for

Certain Defendants.—There may be

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 8015

cases in which (A) subsection (a)(2)

applies; (B) the defendant did not

commit the underlying offense; (C) the

underlying offense is a fraud or another

economic crime covered by a guideline

that uses the table in subsection (b)(1)

of § 2F1.1 (Fraud and Deceit); and (D)

the value of the laundered funds under

subsection (a)(2) is substantially greater

than the value of the loss or other

monetary amount attributable to the

underlying offense for purposes of

§ 2F1.1(b)(1). In such cases, a downward

departure may be warranted to ensure

that the seriousness of the punishment

for the money laundering offense is

reasonably related to the seriousness of

the punishment that would be

warranted for the underlying offense.

However, any such downward

departure shall not result in an offense

level lower than that which would

result if the sentence were determined

using the base offense level under

subsection (a)(1). For example, the

underlying offense may have involved

the fraudulent sale of stock for $200,000

that was worth $180,000. The defendant

did not commit the underlying offense

but laundered all of the $200,000. The

value of the laundered funds is

$200,000, but the loss amount for

purposes of § 2F1.1(b)(1) is $20,000. In

such a case, the downward departure

shall not result in an offense level lower

than the sum of the base offense level

under § 2F1.1(a) and the enhancement

under § 2F1.1(b)(1) for the value of the

loss. Accordingly, a downward

departure, if warranted, shall not result

in an offense level lower than level 9

(§ 2F1.1(a) base offense level of level 6

plus § 2F1.1(b)(1) increase of 3 offense

levels to account for loss amount of

$20,000).]

[Value of Funds—Option 2:

(C) Value of Laundered Funds for

Certain Defendants.—In a case in which

(A) subsection (a)(2) applies; (B) the

defendant did not commit the

underlying offense; and (C) the

underlying offense is a fraud or another

economic crime covered by a guideline

that uses the table in subsection (b)(1)

of § 2F1.1 (Fraud and Deceit), the value

of the laundered funds is the lesser of

the actual value of the laundered funds

or the value of the loss or other

monetary amount attributable to the

underlying offense for purposes of

§ 2F1.1(b)(1). For example, the

underlying offense may have involved

the fraudulent sale of stock for $200,000

that was worth $180,000. The defendant

did not commit the underlying offense

but laundered all of the $200,000. The

actual value of the laundered funds is

$200,000, but the loss amount for

purposes of § 2F1.1(b)(1) is $20,000. In

such a case, the value of the laundered

funds, for purposes of subsection (a)(2),

is $20,000. Accordingly, the base

offense level under subsection (a)(2) is

the sum of the base offense level under

§ 2F1.1(a) and the enhancement under

§ 2F1.1(b)(1) for the value of the loss.

Therefore, in this example, the base

offense level under subsection (a)(2) is

level 9 (§ 2F1.1(a) base offense level of

level 6 plus § 2F1.1(b)(1) increase of 3

offense levels to account for loss amount

of $20,000.]

[Value of Funds—Option 3: No specific

provision]

4. Enhancement for Business of

Laundering Funds.—

(A) In General.—The court shall

consider the totality of the

circumstances to determine whether a

defendant who did not commit the

underlying offense was in the business

of laundering funds, for purposes of

subsection (b)(2)(A).

(B) Factors to Consider.—The court

shall consider the following factors in

determining whether, under the totality

of circumstances, the defendant was in

the business of laundering funds for

purposes of subsection (b)(2)(A):

(i) The defendant [regularly]

[routinely] engaged in acts of laundering

funds during an extended period of

time.

(ii) The defendant laundered

criminally derived funds from multiple

sources during an extended period of

time.

(iii) The defendant generated a

substantial amount of revenue in return

for laundering the funds.

(iv) At the time the defendant

committed the instant offense, the

defendant had one or more prior

convictions of an offense under 18

U.S.C. 1956 or 1957, [31 U.S.C. 5313,

5314, 5316, 5324, or 5326] or any

similar offense under state law, or an

attempt or conspiracy to commit any

such federal or state offense. Prior

convictions taken into account under

subsection (b)(2)(A) also are counted for

purposes of determining criminal

history points pursuant to Chapter Four,

Part A (Criminal History).

5. [Significant][Material] Promotion of

Further Criminal Conduct.—In order for

subsection (b)(2)(B) to apply, all or part

of the laundered funds must have been

used to further criminal conduct in

addition to or beyond the criminal

conduct from which the laundered

funds were derived. [Subsection

(b)(2)(B) does not apply if the defendant

laundered criminally derived proceeds

that were generated from an underlying

offense that was completed at the time

of the laundering.] For example,

subsection (b)(2)(B) would apply in a

case in which the defendant reinvested

(i.e., plowed-back) all or part of the

laundered funds from an ongoing,

fraudulent telemarketing scheme to

finance the continued operation of that

scheme but would not apply in a case

in which the defendant used all or part

of the laundered funds only to finance

a lavish lifestyle. Similarly, subsection

(b)(2)(B) would apply in a case in which

the defendant used laundered funds

from an underlying drug offense to

purchase additional drugs for

distribution but would not apply in a

case in which the defendant used those

laundered funds to pay for drugs the

defendant had already distributed as

part of the underlying drug offense.

Subsection(b)(2)(B) does not apply to

transactions that only give the

defendant access to, or the use of for

otherwise legal purposes, the criminally

derived funds. For example, subsection

(b)(2)(B) does not apply in a case in

which the defendant deposits checks

that represent the criminally derived

proceeds from a fraudulent scheme into

an account, and subsequently spends

the funds for items that are not

inherently illegal or items that do not

further additional criminal conduct.

[Subsection (b)(2)(B) does not apply if

the value of laundered funds used or

intended to be used to promote criminal

conduct was de minimis relative to the

value of the laundered funds.]

6. Sophisticated Concealment.—For

purposes of subsection (b)(2)(C),

sophisticated concealment means

especially complex or especially

intricate offense conduct in which

deliberate steps were taken to conceal

the nature, location, source, ownership,

or control of the criminally derived

funds, in order to make the transaction,

financial transaction, monetary

transaction, transportation, transfer, or

transmission in violation of 18 U.S.C.

1956 or 1957, or the extent of that

violation, difficult to detect.

Sophisticated concealment typically

involves hiding assets or hiding

transactions, or both, through:

(A) The use of fictitious entities;

(B) The use of shell corporations;

(C) The creation of two or more levels

(i.e., layering) of transactions,

transportation, transfers, or

transmissions, of criminally derived

funds that were intended to appear

legitimate; or

(D) the transportation, transmission,

or transfer of criminally derived funds

from or through a place inside the

United States to or through a place

outside the United States (e.g., an

offshore bank account) or from or

8016 Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices

through a place outside the United

States to or through a place inside the

United States. For purposes of this

subdivision, United States has the

meaning given that term in Application

Note 1 of the Commentary to § 2B5.1

(Offenses Involving Counterfeit Bearer

Obligations of the United States).

7. Grouping of Multiple Counts.—In a

case in which the defendant is to be

sentenced on a count (or a Group of

counts) for the underlying offense from

which the laundered funds were

derived, the count for the offense under

this guideline shall be grouped pursuant

to subsection (c) of § 3D1.2 (Groups of

Closely-Related Counts) with the count

for the underlying offense or, in the case

of a Group of counts for the underlying

offense, with the most serious of the

counts comprising the Group, i.e., the

count resulting in the greatest offense

level.’’.

The Commentary to § 2S1.3 captioned

‘‘Statutory Provisions’’ is amended by

inserting ‘‘, 5326’’ after ‘‘5324’’.

The Commentary to § 2T2.2 captioned

‘‘Statutory Provisions’’ is amended by

inserting ‘‘18 U.S.C. 1960;’’ before ‘‘26

U.S.C.’’; by striking ‘‘provided’’ and

inserting ‘‘if’’; and by inserting ‘‘; 31

U.S.C. 5326’’ after ‘‘taxes’’.

Appendix A (Statutory Index) is

amended in the line referenced to ‘‘18

U.S.C. 1957’’ by striking ‘‘2S1.2’’ and

inserting ‘‘2S1.1’’; By inserting after the

line referenced to ‘‘18 U.S.C. 1959’’ the

following new line:

‘‘18 U.S.C. 1960 2T2.2’’;

B-Date: 01-24-01 10:11 striking ‘‘31

U.S.C. 5322 2S1.3’’; and by inserting

after the line referenced to ‘‘31 U.S.C.

5324’’ the following new line:

‘‘31 U.S.C. 5326 2S1.3, 2T2.2’’.

The Commentary to § 1B1.3 captioned

‘‘Application Notes’’ is amended in the

first and second paragraphs of Note 6,

by striking the second sentence in its

entirety, in each instance.

Section 3D1.2(d) is amended in the

second paragraph by striking ‘‘2S1.2,’’.

Section 8C2.1(a) is amended by

striking ‘‘2S1.2,’’.

The Commentary to § 8C2.4 captioned

‘‘Application Notes’’ is amended in

Note 5 by striking ‘‘; 2S1.1 (Laundering

of Monetary Instruments); and 2S1.2

(Engaging in Monetary Transactions in

Property Derived from Specified

Unlawful Activity)’’.

The Commentary to § 8C2.4 captioned

‘‘Background’’ is amended in the

seventh sentence by striking ‘‘and

money laundering’’.

Issues for Comment: The Commission

invites comment on the following:

(1) Whether application of subsection

(a)(1) of proposed § 2S1.1 should be

expanded to include defendants who

are otherwise accountable for the

underlying offense under

§ 1B1.3(a)(1)(B)(Relevant Conduct), in

addition to defendants who commit or

are otherwise accountable for the

underlying offense under

§ 1B1.3(a)(1)(A).

(2) Whether proposed § 2S1.1 should

include enhancements for conduct that

constitutes elements of the money

laundering offense, even if the conduct

did not constitute an aggravated form of

money laundering offense conduct.

Specifically, the Commission invites

comment on whether and, if so, to what

extent, proposed § 2S1.1 should include

an enhancement if:

(A) The offense involved concealment

(coextensive with the meaning of the

term under 18 U.S.C. 1956), even if the

conduct did not constitute sophisticated

concealment.

(B) If the defendant is convicted (A)

under 18 U.S.C. 1956(a)(1)(A)(ii); (B)

under 18 U.S.C. 1956(a)(1)(B)(ii); (C)

under 18 U.S.C. 1956(a)(2)(B)(ii); (D)

under 18 U.S.C. 1956(a)(3)(C); or (E) of

attempting, aiding or abetting, or

conspiracy to commit any of the

offenses referred to in subdivisions (A)

through (D).

(C) If subsection (a)(1) applies and (1)

the defendant did not engage in an

aggravated form of money laundering as

accounted for by subsection (b)(2), and

(2) the value of funds laundered

exceeded $10,000.

(3) Whether application of subsection

(b)(2)(A) (‘‘in the business of laundering

funds’’) should be expanded to include

defendants (1) whose base offense level

is determined under subsection (a)(1)

and (2) who launder criminally derived

funds generated by offenses which they

did not commit and are not otherwise

accountable under § 1B1.3(a)(1)(A).

(4) Whether violations of 18 U.S.C.

1960 (Illegal Money Transmitting

Businesses) should be referenced to

§ 2S1.3 (Structuring Transactions to

Evade Reporting Requirements).

Proposed Amendment: Miscellaneous

New Legislation and Technical

Amendments

21. Synopsis of Proposed

Amendment: This is a two-part

proposed amendment.

First, the proposed amendment

addresses miscellaneous legislation

enacted during the 106th Congress by

(1) adding to Appendix A (Statutory

Index) and the statutory provisions of

several guidelines references to new

statutes; and (2) providing commentary

to § 2M3.9 that implements the new

consecutive sentencing requirement of

50 U.S.C. 421 (pertaining to the

disclosure of information identifying a

covert agent). Note that there were no

directives to the Commission contained

in any of the legislation that created

these new offenses.

In each instance, the new Appendix A

references are based on a determination

that the new offense is sufficiently

similar to other offenses covered by the

referenced guideline.

The new offenses and proposed

guideline references are as follows:

7 U.S.C. 7734—prohibits knowingly

importing, exporting, or moving in

interstate commerce any plant pest or

noxious weed, or knowingly forging any

permit authorizing movement of plant

pests or noxious weeds. Referenced to

§ 2N2.1 (Violations of Statutes and

Regulations Dealing with Any Food,

Drug, Biological Product, Device,

Cosmetic, or Agricultural Product).

5 U.S.C. 6821—prohibits (A)

obtaining or attempting to obtain

customer information from a financial

institution by false statements,

representations, or documents; or (B)

requesting another person to obtain

customer information knowing the

information will be obtained under false

pretenses. Referenced to § 2F1.1 (Fraud

and Deceit).

18 U.S.C. 38—prohibits falsifying any

material fact, or making any fraudulent

representation concerning aircraft or

space vehicle parts. Referenced to

§ 2F1.1 (Fraud and Deceit).

18 U.S.C. 842(p)(2)—prohibits any

person to teach or demonstrate the

making or use of an explosive, a

destructive device, or a weapon of mass

destruction, or distribute by any means

information pertaining to the

manufacture of an explosive, destructive

device, or weapon of mass destruction

with the intent that the teaching,

demonstration, or information will be

used for, or in furtherance of any federal

crime of violence. Referenced to § 2K1.3

(Unlawful Receipts, Possession, or

Transportation of Explosive Materials;

Prohibited Transactions Involving

Explosive Materials) or § 2M6.1

(Unlawful Acquisition, Alteration, Use,

Transfer, or Possession of Nuclear

Material, Weapons, or Facilities) (if the

information pertained to a weapon of

mass destruction).

42 U.S.C. 1011—knowingly and

willfully making of any false statement

or representation of a material fact in an

application for benefits established by

the Social Security Act. Referenced to

§ 2F1.1 (Fraud and Deceit).

49 U.S.C. 30170—prohibits violating

18 U.S.C. 1001 with respect to the

reporting requirements of 49 U.S.C.

30166, with the specific intention of

misleading the Secretary of

Transportation regarding motor vehicle

Federal Register / Vol. 66, No. 18 / Friday, January 26, 2001 / Notices 8017

or motor vehicle equipment safety

related defects that have caused death or

serious bodily injury to an individual.

Referenced to § 2F1.1 (Fraud and

Deceit).

49 U.S.C. 46317(a)—prohibits (1)

knowingly and willfully serving or

attempting to serve as an airman

operating an aircraft without an

airman’s certificate; or (2) knowingly

and willfully employing as an airman to

operate an aircraft any individual who

does not have an airman’s certificate.

Referenced to § 2F1.1 (Fraud and

Deceit).

49 U.S.C. 46317(b) prohibits offenses

described in 49 U.S.C. 46317(a) that

relate to transporting a controlled

substance by aircraft or aiding or

facilitating a controlled substance

violation and that transporting, aiding,

or facilitating—

Is punishable by imprisonment of

more than one year under Federal or

State law; or

Is related to a Federal or state

controlled substance law (except simple

possession) punishable by

imprisonment of more than one year.

Referenced to § 2D1.1 (Unlawful

Manufacturing, Importing, Exporting, or

Trafficking).

Second, the proposed amendment

makes technical and conforming

changes as follows: (1) Modifies

Application Note 3 of the Commentary

to § 2J1.6 to improve the transition

between the first and second

paragraphs; (2) adds a reference to 18

U.S.C. 842(l)–(o) to the Commentary of

§ 2K1.3; and (3) adds a reference to 7

U.S.C. 6810 to the Commentary of

§ 2N2.1. (With respect to the latter two

technical amendments, the statutory

provision was listed in Appendix A

(Statutory Index) but not in the

Commentary of the respective

guidelines.)

Proposed Amendment

The Commentary to § 2D1.1 captioned

‘‘Statutory Provisions’’ is amended by

inserting ‘‘; 49 U.S.C. § 46317(b)’’ after

‘‘960(a), (b)’’.

The Commentary to § 2F1.1 captioned

‘‘Statutory Provisions’’ is amended by

inserting ‘‘, 6821’’ after ‘‘1644;’’; by

inserting ‘‘38,’’ after ‘‘18 U.S.C. §§ ’’; and

by inserting ‘‘; 42 U.S.C. 1011; 49 U.S.C.

30170, 46317(a)’’ after ‘‘2315’’.

The Commentary to § 2K1.3 captioned

‘‘Statutory Provisions’’ is amended by

inserting ‘‘(l)–(o), (p)(2), after ‘‘(i),’’.

The Commentary to § 2M3.9

captioned ‘‘Application Notes’’ is

amended by inserting after Note 2 the

following:

‘‘3. A term of imprisonment imposed

for a conviction under 50 U.S.C. § 421

shall be imposed consecutively to any

other term of imprisonment.’’.

The Commentary to § 2M6.1

captioned ‘‘Statutory Provisions’’ is

amended by inserting ‘‘§ ’’ before

‘‘§ 831’’; by striking ‘‘where’’ and

inserting ‘‘if’’; and by inserting ‘‘,

842(p)(2)’’ after ‘‘ aforementioned

statutory provisions)’’.

The Commentary to § 2N2.1 captioned

‘‘Statutory Provisions’’ is amended by

inserting ‘‘, 6810, 7734’’ after ‘‘150gg’’.

Appendix A (Statutory Index) is

amended by inserting the following at

the appropriate place by title and

section:

‘‘7 U.S.C. 7734 2N2.1

15 U.S.C. 6821 2F1.1

18 U.S.C. 38 2F1.1

18 U.S.C. 842(p)(2) 2K1.3, 2M6.1

42 U.S.C. 1011 2F1.1

49 U.S.C. 30170 2F1.1

49 U.S.C. 46317(a) 2F1.1

49 U.S.C. 46317(b) 2D1.1’’.

The Commentary to § 2J1.6 captioned

‘‘Application Notes’’ is amended in the

first sentence of the second paragraph of

Note 3 by striking ‘‘In’’ and inserting

‘‘However, in’’; and by inserting ‘‘other

than a case of failure to appear for

service of sentence,’’ after ‘‘and the

failure to appear,’’.

[FR Doc. 01–1505 Filed 1–25–01; 8:45 am]

BILLING CODE 2211–01–U