IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

_____________________

No. 96-20983

_____________________

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JOSE LUIS ARCE, Dr.,

Defendant-Appellant.

_________________________________________________________________

Appeal from the United States District Court

for the Southern District of Texas

_________________________________________________________________

July 18, 1997

Before KING, DAVIS, and DeMOSS, Circuit Judges.

KING, Circuit Judge:

Dr. Jose Luis Arce pleaded guilty to several counts

regarding possessing, transferring, and manufacturing illegal

weapons. At sentencing, the district court departed upward five

levels based on three factors. On appeal, Arce challenges the

constitutionality of some of the statutory provisions under which

he was convicted and subsequently sentenced. He also claims that

the district court abused its discretion by upwardly departing. 

We affirm Arce’s convictions. We conclude, however, that the

district court abused its discretion in its consideration of one

of the factors as a basis for departure, and therefore we vacate

his sentence and remand for resentencing.
2

I. BACKGROUND

The facts of this case are undisputed. At the time of the

offenses in the fall of 1995, Arce possessed one Sten machine

gun, two Norinco machine guns, and two homemade silencers (one

black and one white). One of Arce’s friends introduced him to a

man interested in purchasing a silencer and a fully automatic

machine gun. The man interested in the purchases was an

undercover agent of the Bureau of Alcohol, Tobacco, and Firearms

(ATF). Arce agreed to show the undercover agent how to construct

a silencer and to videotape his demonstration so that others

could learn his method. While being videotaped, Arce constructed

the white silencer from PVC pipe, wire mesh, Coca-Cola can lids,

pieces of rubber, and various other items purchased from a local

home improvement store. Arce sold the agent the silencer for

$100. Shortly thereafter, the ATF agent purchased the Sten

machine gun from Arce for $600. During the sale negotiations,

Arce told the ATF agent that he had personally, and illegally,

constructed the Sten machine gun and converted the semi-automatic

Norinco machine guns into fully automatic weapons. During this

time, Arce knew that it was illegal to possess and manufacture

machine guns and silencers without registering them with the ATF

and paying the applicable taxes, and Arce neither registered nor

paid the taxes for any of the devices.

A federal grand jury in the Southern District of Texas

indicted Arce in April of 1996 with the following four counts: 

1) possessing three unregistered machine guns and two silencers
3

in violation of 26 U.S.C. § 5861(d), 2) possessing three machine

guns in violation of 18 U.S.C. § 922(o), 3) transferring a

machine gun in violation of 18 U.S.C. § 922(o), and 4)

manufacturing a silencer without first registering as a firearms

manufacturer in violation of 26 U.S.C. § 5861(a). 

After unsuccessfully attempting to strike the reference to

machine guns from count one and to dismiss counts two and three,

Arce pleaded guilty to all charges. The district court ordered

the preparation of a presentence investigation report (PSR),

which was filed in September of 1996. In October 1996, a

sentencing hearing was held. After ruling on numerous objections

to the PSR, the district court determined that Arce’s offense

level was 17 and his criminal history category was I, resulting

in a sentencing range of 24 to 30 months according to the U.S.

SENTENCING COMMISSION GUIDELINES MANUAL (hereinafter “USSG,” “the

Guidelines,” or “the Sentencing Guidelines”). The court then

departed upward five levels on the basis that the United States

Sentencing Commission did not adequately consider several

aggravating factors in promulgating the relevant guideline, USSG

§ 2K2.1. This resulted in a new sentencing range of 41 to 51

months, and the district court sentenced Arce to 51 months. Arce

timely appealed. 

On appeal, Arce asserts several arguments. Arce challenges

his convictions and sentence relating to the three machine guns
 

1 Specifically, Arce argues that his convictions for

possessing and transferring machine guns under 18 U.S.C. § 922(o)

are unconstitutional “because Congress exceeded its powers under

the Interstate Commerce Clause in enacting the statute.” Arce

further argues that his conviction for possessing two

unregistered machine guns under 26 U.S.C. § 5861(d) “is

fundamentally unfair and violative of due process because the

[ATF] would have refused to register Mr. Arce’s three machine

guns had he attempted to do so.” Based on these two arguments,

Arce claims his sentence should be vacated because it was based

in part on these machine guns.

 

2 See United States v. Knutson, 113 F.3d 27 (5th Cir. 1997)

(holding that Congress did not exceed its powers under the

Commerce Clause in enacting 18 U.S.C. § 922(o)); United States v.

Ardoin, 19 F.3d 177, 180 n.4 (5th Cir. 1994) (“The fact that ATF

does not accept the registration of such weapons does not offend

due process.”).

4

on constitutional grounds.1 However, as Arce acknowledges, his

positions are inconsistent with prior decisions of this court,2

and we are bound by those decisions. Floors Unlimited, Inc. v.

Fieldcrest Cannon, Inc., 55 F.3d 181, 185 (5th Cir. 1995)

(stating that a panel of this court may not overrule the decision

of a prior panel in the absence of an en banc reconsideration or

a superseding decision of the Supreme Court). Thus, we will not

address the merits of these arguments. Arce also asserts that

the district court’s upward departure at sentencing was an abuse

of discretion. Because we agree to some extent with Arce’s

argument, we vacate Arce’s sentence and remand for resentencing.

II. LEGAL STANDARDS FOR UPWARD DEPARTURES

The Supreme Court recently discussed at length the legal

standards for departures from the Sentencing Guidelines in Koon

v. United States, 116 S. Ct. 2035 (1996). Citing 18 U.S.C.

§ 3553(a), the Court began by making clear that “[a] district
5

court must impose a sentence within the applicable Guideline

range, if it finds the case to be a typical one.” Id. at 2040. 

The Sentencing Commission did not consider every possible

scenario of criminal activity and thus formulated the Guidelines

around the normal or “heartland” case. Id. at 2044. When a

court confronts a case that it determines falls outside this

heartland, the court can consider departing from the Guidelines. 

The introduction to the Guidelines explains:

The Commission intends the sentencing courts to treat

each guideline as carving out a “heartland,” a set of

typical cases embodying the conduct that each guideline

describes. When a court finds an atypical case, one to

which a particular guideline linguistically applies but

where conduct significantly differs from the norm, the

court may consider whether a departure is warranted.

USSG ch. 1, pt. A, intro. comment. 4(b). Congress has

specifically authorized such departure power:

The court shall impose a sentence of the kind, and

within the range, referred to in subsection (a)(4)

unless the court finds that there exists an aggravating

or mitigating circumstance of a kind, or to a degree,

not adequately taken into consideration by the

Sentencing Commission in formulating the guidelines

that should result in a sentence different than that

described.

18 U.S.C. § 3553(b). 

USSG § 5K2.0 is the Sentencing Commission’s policy statement

specifically governing the grounds for departure. The Commission

notes that a case may involve factors that are not taken into

consideration at all in the relevant Guideline, and the

“[p]resence of any such factor may warrant departure from the

guidelines.” Id. In addition to factors not considered at all

in the relevant Guideline, “the court may depart from the
 

3 The following are the prohibited factors: 1) drug or

alcohol dependence, USSG § 5H1.4; 2) race, sex, national origin,

creed, religion, and socio-economic status, § 5H1.10; 3) lack of

guidance as a youth and similar indications of a disadvantaged

upbringing, § 5H1.12; and 4) economic hardship, § 5K2.12.

6

guidelines, even though the reason for departure is taken into

consideration in the guidelines (e.g., as a specific offense

characteristic or other adjustment), if the court determines

that, in light of unusual circumstances, the guideline level

attached to that factor is inadequate.” Id. In the commentary

to § 5K2.0, the Commission notes its belief that cases which

present these unusual circumstances and thus significantly differ

from the heartland of cases “will be extremely rare.” While the

Commission specifically lists certain factors that should never

be considered as a basis for departure,3 it states that with the

exception of those factors, it “does not intend to limit the

kinds of factors, whether or not mentioned anywhere else in the

guidelines, that could constitute grounds for departure in an

unusual case.” USSG ch. 1, pt. A, intro. comment. 4(b).

In Koon, the Supreme Court held that courts of appeals must

review district court decisions to depart from the Guidelines for

abuse of discretion. 116 S. Ct. at 2046-47. The Supreme Court

explained in detail the wisdom of deferring to the district

courts in this circumstance:

A district court’s decision to depart from the

Guidelines . . . will in most cases be due substantial

deference, for it embodies the traditional exercise of

discretion by a sentencing court. Before a departure

is permitted, certain aspects of the case must be found

unusual enough for it to fall outside the heartland of

cases in the Guideline. To resolve this question, the
7

district court must make a refined assessment of the

many facts bearing on the outcome, informed by its

vantage point and day-to-day experience in criminal

sentencing. Whether a given factor is present to a

degree not adequately considered by the Commission

. . . [is a matter] determined in large part by

comparison with the facts of other Guidelines cases. 

District courts have an institutional advantage over

appellate courts in making these sorts of

determinations, especially as they see so many more

Guidelines cases than appellate courts do. In 1994,

for example, 93.9% of Guidelines cases were not

appealed. 

Id. (citations omitted). 

As will be discussed below, the government asserts that this

case is outside the heartland because it involves factors that,

while accounted for in the Guidelines, were not adequately

considered by the Sentencing Commission in the circumstances of

this case. Thus, under the principles set forth in the

Sentencing Guidelines and in Koon, we must decide whether the

district court abused its discretion in determining that this

case is outside the heartland because the factors it identified

are present in a kind or to a degree not adequately accounted for

in the Guidelines, giving due deference to the district court’s

institutional advantage in determining whether a factor has been

adequately considered.

III. DISCUSSION

The National Firearms Act (NFA), 26 U.S.C. §§ 5801-5872,

regulates certain firearms, such as machine guns and silencers,

and destructive devices, such as bombs. Id. § 5845. Among other

things, the NFA imposes an obligation to register these firearms

and devices with the ATF in a national registry and to pay a tax. 
8

Id. § 5861. The NFA has been held constitutionally valid under

the taxing power, Sonzinsky v. United States, 300 U.S. 506, 514

(1937), and is located within the Tax Code. Violations of the

tax and registration requirements of § 5861 are sentenced under

USSG § 2K2.1. 

During the sentencing hearing, the district court determined

that § 2K2.1 was inadequate to cover fully the circumstances of

Arce’s conduct and listed the following three factors upon which

it based its five-level departure: 1) the possession of multiple

NFA weapons, 2) Arce’s deception and attempts to conceal his

illegal conduct, and 3) Arce’s manufacturing of firearms (as

opposed to possession or transfer). The court relied upon Arce’s

participation in the videotape in its analysis of the

manufacturing and concealment factors. The factor concerning

multiple NFA weapons is specifically authorized as a ground for

departure in Application Note 16 of USSG § 2K2.1, and Arce does

not challenge this basis for departure. As for the other

factors, the district court stated that it was operating

“generally within [§] 5K2.0.” The court gave one point for the

multiple NFA weapons, two points for concealment, and two points

for manufacturing.

On appeal, Arce argues that the district court abused its

discretion by considering in any way during sentencing his

participation in the videotape and by departing based on

concealment and manufacturing, factors that Arce argues are

adequately accounted for in § 2K2.1. Arce does not challenge the
9

reasonableness of the extent of the departure, but claims that

the district court abused its discretion in considering these

factors in the first place. We will consider each in turn.

A. The Videotape

At the sentencing hearing when the court gave its reasons

for the upward departure, the district court made several

references to the videotape of Arce constructing the silencer in

its analysis of the manufacturing and concealment issues. On

appeal, Arce argues that the court could not consider the

videotape in its upward departure analysis because the

participation in the videotape “was not illegal other than to the

extent that his making of the silencer, which was filmed, was

proscribed by 26 U.S.C. § 5861.” The videotape was confiscated

before anyone else could view it to learn his technique; thus,

Arce asserts, he cannot be liable for aiding and abetting because

no one used the tape to conduct illegal activity. Because the

tape did not produce illegal conduct and thus the act of making

the tape was not illegal, Arce asserts that the district court

cannot consider the participation in the videotape in its upward

departure analysis.

We are not persuaded that the district court, in

contemplating an upward departure, is limited to considering only

acts that are criminal or illegal. In support of his

proposition, Arce cites United States v. Peterson, 101 F.3d 375

(5th Cir. 1996), cert. denied, 117 S. Ct. 1346 (1997). Peterson

involves a defendant convicted for securities fraud. Id. at 377. 
10

Calculating the base offense level in a securities fraud case

involves the determination of the amount of monetary loss

attributable to the defendant’s conduct. See USSG § 2F1.1(b)(1). 

In arriving at the base offense level, a sentencing court

considers not only the conduct in the charged offense but also

“relevant conduct” to the offense of conviction. See id.

§ 1B1.3. The court in Peterson concluded that the district court

erred in its calculation of loss because it included losses from

conduct that was not criminal. 101 F.3d at 385. The court

explained:

For conduct to be considered ‘relevant conduct’ for the

purpose of establishing [one’s] offense level[,] that

conduct must be criminal. To hold otherwise would

allow individuals to be punished by having their

guideline range increased for activity which is not

prohibited by law but merely morally distasteful or

viewed as simply wrong by the sentencing court. 

Id. (citations omitted). 

Peterson is distinguishable from the present case because

Peterson involves calculation of the base offense level while

Arce complains of the district court’s upward departure. A

sentencing court is not limited to “relevant conduct” when

considering an upward departure. The Sentencing Guidelines

provide in § 1B1.4: “In determining the sentence to impose within

the guideline range, or whether a departure from the guidelines

is warranted, the court may consider, without limitation, any

information concerning the background, character and conduct of

the defendant, unless otherwise prohibited by law.” (emphasis

added); see also 18 U.S.C. § 3661 (“No limitation shall be placed
11

on the information concerning the background, character, and

conduct of a person convicted of an offense which a court of the

United States may receive and consider for the purpose of

imposing an appropriate sentence.”). According to the background

commentary, § 1B1.4 was written specifically to distinguish

§ 1B1.3, which only applies to calculating the base offense

level. The Guidelines also specifically provide that conduct

which does not constitute an element of the offense may be

considered in determining a departure, even when that conduct

cannot be considered in determining the base offense level under

§ 1B1.3. USSG § 1B1.2 comment. note 3; see also United States v.

Tropiano, 50 F.3d 157, 164 (2d Cir. 1995) (“Section 5K2.0 allows

an upward departure for misconduct not leading to conviction if

the defendant committed acts related in some way to the offense

of conviction, even though not technically covered by the

definition of relevant conduct.” (internal quotations and

alterations omitted)). Particularly enlightening is an amendment

to the Guidelines effective November 1, 1990, which deleted the

following paragraph from § 5K2.0, the general provision on

departures: “Harms identified as a possible basis for departure

from the guidelines should be taken into account only when they

are relevant to the offense of conviction, within the limitations

set forth in § 1B1.3.” USSG app. C, amend. 358. This paragraph

was deleted because the Sentencing Commission determined that it

was “unclear and overly restrictive.” Id. Clearly, the
 

4 At the beginning of the tape, Arce states that

manufacturing the silencer without being a registered

manufacturer with the ATF is illegal and that he was a licensed

manufacturer. Arce asserts that the false statement that he was

a registered manufacturer is a collateral matter because he also

indicated that any viewer should not make the silencer without

being registered. Arce contends that this shows not concealment

12

Commission has rejected the position that grounds for departure

can be based only on “relevant conduct” under § 1B1.3. 

We conclude that a district court can consider conduct that

is not itself criminal or “relevant conduct” under § 1B1.3 in

determining whether an upward departure is warranted. Therefore,

the district court’s consideration of Arce’s participation in the

videotape was not per se an abuse of discretion, and we turn to a

broader discussion of the factors upon which the district court

based its upward departure. 

B. Concealment

The district court based part of its upward departure on

what it perceived to be concealment or deceitful acts by Arce. 

The court stated that it was “very concerned about Dr. Arce’s

concealment in his multiple efforts to conceal either the

illegality of what he’s doing or the fact of his weapons and

materials.” The court pointed to three different acts of

concealing. First, upon notification from the manufacturer to

return some of his weapons because they were about to become

illegal, Arce wrote the manufacturer and stated that he had sold

the weapons via newspaper ad when in fact he had not sold them. 

Second, at the beginning of the videotape, Arce falsely stated

that he was a licensed manufacturer under the NFA.4 Third, the
but an intent to have others follow the law. We fail to see how

the fact that he said only registered manufacturers could legally

make the silencer changes the fact that he affirmatively

misrepresented his status as a manufacturer. Even if the

disclaimer is relevant to his intent to conceal, the district

court rejected Arce’s interpretation of the statements on the

video. This rejection is, in essence, a factual credibility

determination that we review for clear error. See United States

v. McCaskey, 9 F.3d 368, 372 (5th Cir. 1993) (stating that a

sentencing court’s factual findings are reviewed for clear

error). We conclude that the district court did not commit clear

error in rejecting Arce’s interpretation of the video statements.

13

court considered the video as “evidenc[ing] an intent to teach

others how to do this, which to me, again, speaks to [the] issue

of trying to enhance the ability of himself and others to create

these items outside of the Government regulatory scheme. It’s an

intent to conceal or an intent to facilitate the other’s

concealing.”

Arce asserts that the district court abused its discretion

in upwardly departing based on this conduct for two reasons. 

First, Arce contends that lying in the letter and on the video

and participating in the video were not, in themselves, criminal

activities and thus cannot be used as the basis of an upward

departure. As indicated in the immediately preceding section, we

reject the contention that an upward departure must be based on

criminal activity.

Second, Arce argues that the Sentencing Commission has

already adequately taken concealment into account in promulgating

§ 2K2.1 and thus the district court abused its discretion in

upwardly departing on this basis. According to Arce, because the

NFA was enacted pursuant to the taxing power, the gravamen of an
 

5 USSG § 2K2.1(a)(7) provides a base offense level of 12

for standard firearms violations while § 2K2.1(a)(5) provides a

base offense level of 18 for NFA weapons violations.

 

6 USSG § 2K2.1(b)(4) provides for a 2 level increase if the

firearm had an obliterated or altered serial number. USSG

§ 2K2.1(b)(6) makes specific provision for recordkeeping offenses

designed “to conceal a substantive offense involving firearms or

ammunition.” 

14

NFA violation is the failure to register and pay a tax. The base

offense level for an NFA violation is 18, which is much higher

than the base offense level for non-NFA weapons violations.5

According to Arce, it is reasonable to assume this higher base

offense level exists to promote the primary goal of the statute,

which he asserts is to keep track of these dangerous weapons. 

Therefore, concealing the ownership of a firearm by not

registering is inherent in an NFA violation. Furthermore, the

Sentencing Guidelines specify punishment for two situations

involving concealment,6 which implies that the Sentencing

Commission chose not to aggravate other types of concealment and

that only these two special circumstances of concealment merit an

upward departure.

There are several problems with Arce’s argument. First,

while it is true that the NFA was enacted pursuant to the taxing

power, this court has recently held that the constitutionality of

the NFA can be upheld based on either the taxing power or on the

interstate commerce power. United States v. Ardoin, 19 F.3d 177,

180 (5th Cir. 1994). Even if the NFA were based solely on the

taxing power, that does not necessarily mean that its primary

goal is tracking weapons as opposed to regulating them. Indeed,
 

7 This court has determined that this practice “does not

offend due process,” even though compliance with the registration

requirement is impossible for the owner of an illegal firearm,

because the owner always has the option of not owning the

firearm. Ardoin, 19 F.3d at 180 & n.4.

15

the taxing power is often used as a means of regulation, and as

long the legislation “on its face purports to be an exercise of

the taxing power,” “[i]nquiry into the hidden motives which may

move Congress to exercise a power constitutionally conferred upon

it is beyond the competency of courts.” Sonzinsky v. United

States, 300 U.S. 506, 513-14 (1937) (upholding the

constitutionality of the NFA, despite the petitioner’s assertion

that it was passed “for the purpose of suppressing traffic in a

certain noxious type of firearms” instead of to raise revenue). 

This seems particularly true in the NFA context because the NFA

specifically prohibits the registration of illegal firearms and

yet still provides for punishment if those firearms are not

registered. 26 U.S.C. § 5812.7 The fact that the NFA authorizes

criminal sanctions for failing to register an illegal firearm,

even when an individual in possession of an illegal firearm does

not conceal that possession and attempts to register, suggests

that the statute is concerned with more than concealment.

The second problem with Arce’s argument is that § 2K2.1’s

inclusion of two specific provisions relating to concealment does

not preclude the district court from considering other types of

concealment. The Supreme Court rejected a similar argument in

Koon. The lower court had departed downward based upon many

factors, including the heightened risk that the defendants would
16

suffer abuse in prison. The government argued that

susceptibility to prison abuse should never be considered as a

basis for departure because the degree of such susceptibility is

entirely subjective. 116 S. Ct. at 2050. The Court rejected the

government’s plea to prohibit categorically such considerations,

noting that “[t]he Commission set forth factors courts may not

consider under any circumstances but made clear that with those

exceptions, it ‘does not intend to limit the kinds of factors,

whether or not mentioned anywhere else in the guidelines, that

could constitute grounds for departure in an unusual case.’” Id.

(quoting USSG ch. 1, pt. A, intro. comment. 4(b)). For the

courts to go beyond those prohibited categories listed by the

Commission “would be to transgress the policymaking authority

vested in the Commission.” Id. Arce in effect is asking this

court to prohibit sentencing courts from considering any type of

concealment other than that type specifically listed, but we

reject that position as inconsistent with the Guidelines and

Koon. 

The concealment factor is no different than any other factor

that has already been considered to some degree in the offense: 

the district court has the discretion to determine if the factor

exists to such a degree or kind as to make the case atypical and

thus outside the heartland of cases covered by the Guidelines. 

The district court determined that this case was atypical because

of the nature of Arce’s concealing activities. He not only

concealed in the usual sense of failing to register his firearms,
 

8 Arce complains about the district court’s reliance on any

type of evidence regarding the ability of metal detectors to

detect Arce’s silencers. While neither the government nor the

PSR mentioned evading metal detectors as a basis for departure,

the district court brought the issue up sua sponte, asking the

prosecutor if the silencer would show up in a metal detector. 

The prosecutor said he presumed it would show up because it was

made with metal parts. Then, an ATF agent in the court room

stated to the court that the silencer did not trigger the metal

detector in the court building on the first try, but on

17

but he also took affirmative steps to conceal his illegal

activity and his ownership of illegal and soon to be illegal

firearms (i.e., falsely denying possession of the firearms to the

manufacturer and claiming he was a licensed manufacturer at the

beginning of the videotape), and he made the videotape

specifically to teach others to conceal by making silencers

totally outside of the government regulatory scheme. The

district court did not abuse its discretion by departing upwardly

on this basis after determining that these factors make this case

unusual and outside the heartland of cases governed by the

Guidelines.

C. Manufacturing

During sentencing, the district court stated that it was

“extremely concerned about the fact that the guideline 2K2.1 does

not in any way, shape, or form address the manufacture of weapons

of silencers as we have here.” The court further commented on

the unusual nature of the manufacturing because of the videotape

designed to teach others to manufacture:

And then I’m concerned about the silencers. The fact

that many of these weapons in question are silencers

where -- homemade by Dr. Arce’s own method, unlikely to

be detected by metal detectors8 and a methodology that
subsequent attempts the silencer did trigger the metal detector. 

The ATF agent stated that “to the best of [his] knowledge,” the

subsequent passes triggered the metal detector because the

operator increased the sensitivity of the detector. When the

court asked this question and elicited this information, Arce

made no objection. Later in the sentencing hearing when the

district court was stating its reasons for departure, it made the

reference to the metal detector issue as set forth in the text. 

Again, Arce made no objection whatsoever to the district court’s

use of this information. 

Arce claims on appeal that reliance on this information “was

an abuse of discretion because there was inconclusive proof that

Mr. Arce’s silencers were intended to, or actually did, avoid

detection by metal detectors in a manner that violated federal

law.” To the extent that Arce is arguing that this cannot be a

basis for upward departure because the government did not prove

he violated a federal statute regarding avoiding metal detectors,

we have already rejected Arce’s argument that the district court

cannot consider noncriminal conduct in formulating an upward

departure. To the extend Arce quarrels with the factual accuracy

of the information relied upon by the district court, Arce failed

to object to the district court, and thus we review for plain

error only. See United States v. Olano, 113 S. Ct. 1771, 1776

(1993); United States v. Calverley, 37 F.3d 160, 162 (5th Cir.

1994). Questions of fact that the sentencing court could have

resolved upon proper objection at sentencing can never constitute

plain error. McCaskey, 9 F.3d at 376. Thus, we reject Arce’s

argument that the district court erred in relying on the evidence

regarding metal detectors.

18

he intended by the video to spread to others so that

they could copy his methodology. The concept of

retaining and using under licensed system your own

weaponry is one thing. The conduct by Dr. Arce is

something qualitatively different that I think could

not be conceived of in the guidelines because . . .

it’s such an unusual circumstance.

Arce claims that the district court abused its discretion in

relying on manufacturing as a basis for upwardly departing

because the Sentencing Commission considered manufacturing and

decided not to make it an aggravating factor. Arce points to

Appendix A of the Guidelines Manual, the Statutory Index, which

lists the Guideline provision that corresponds to each particular
19

statutory violation. Appendix A indicates that Guideline § 2K2.1

applies to violations of 26 U.S.C. § 5861(a)-(l). Section § 5861

contains two provisions specifically concerning manufacturing: 

1) § 5861(a) proscribes engaging “in business as a manufacturer”

of firearms without registering and having paid a special tax and

2) § 5861(f) makes it illegal “to make a firearm in violation of

the provisions of this chapter.” Thus, according to Arce, since

the Sentencing Commission specifically listed these two

subsections in Appendix A as correlating to § 2K2.1, the

Commission clearly did not ignore manufacturing but chose not to

make it an aggravating factor. 

We are partially persuaded by Arce’s argument. It is clear

that acts of manufacturing are prohibited under § 5861, and

convicted violators will be sentenced pursuant to § 2K2.1. 

Indeed, § 2K2.1 governs Arce’s sentence on count four for

manufacturing a silencer without first registering as a firearms

manufacturer. Thus, the district court erred in basing a portion

of its upward departure on the simple fact that “guideline 2K2.1

does not in any way, shape, or form address the manufacture of

weapons” because § 2K2.1 governs those who are convicted of

illegally manufacturing. To hold otherwise would allow the

government to prosecute only for possession and seek an upward

departure for manufacturing and receive a higher sentencing range

than with a prosecution for simple manufacturing. 

This is not to say that manufacturing can never be a basis

for an upward departure. As the Sentencing Commission stated in
20

§ 5K2.0, “the court may depart from the guidelines, even though

the reason for departure is taken into consideration in the

guidelines . . . if the court determines that, in light of

unusual circumstances, the guideline level attached to that

factor is inadequate.” In addition to its comments concerning

manufacturing in general, the district court emphasized the

“unusual circumstance” in this case that Arce videotaped his

method of making silencers at home so that others could make

these silencers and evade the registration and taxation

requirements under § 5861. The district court’s judgment that

this circumstance is so unusual as to fall outside of the

heartland of cases in the Guidelines is to be given particular

deference, Koon, 116 S. Ct. at 2046-47, and we conclude that the

district court did not abuse its discretion in determining that

the videotape took this case out of the heartland of

manufacturing cases and upwardly departing on that basis.

Because the district court incorrectly considered a factor

that the applicable Guideline already considers (simple

manufacturing) and correctly considered a permissible factor (the

unusual nature of the manufacturing because of the videotape), we

must vacate the district court’s sentence and remand for

resentencing because we cannot conclude that the district court’s

sentence would have been the same without relying on the invalid

factor. See Williams v. United States, 503 U.S. 193, 203 (1992).
21

IV. CONCLUSION

For the foregoing reasons, Arce’s convictions are AFFIRMED;

we VACATE the district court’s sentence and REMAND for

resentencing consistent with this opinion.