Opinion ID: 196811
Heading Depth: 3
Heading Rank: 1

Heading: The Fraud or Deceit Base Offense Level

Text: 63 First, Appellant contends that the district court should have applied U.S.S.G. § 2K1.4(a)(3), which requires computation of the base offense level as 2 plus the base offense level for Fraud and Deceit. Appellant argues that the overwhelming evidence at trial established that his primary purpose was to defraud the insurance company and that Appellant, while creating some risk of death or serious bodily injury by pouring gasoline, did not knowingly create a substantial risk. While the record does indicate that Appellant participated in a scheme to defraud the insurance company, we conclude that the district court properly chose subparagraph § 2K1.4(a)(1) based on its specific finding--which, as we discuss below, was not clearly erroneous--that Appellant knowingly created a substantial risk of death or serious bodily injury to persons other than the participants in the attempted arson. See Grimes, 967 F.2d at 1472 (holding that district court properly rejected application of fraud guideline, § 2K1.4(a)(3), and properly applied § 2K1.4(a)(2) in case involving defendant's effort to obtain insurance through arson where defendant created substantial risk of injury or death). The arson guideline instructs that the base offense level is determined by selecting the highest level from among four choices. Section 2K1.4(a)(1)-(4); United States v. Mizrachi, 48 F.3d 651, 655 (2d Cir.1995). The Government contends that applying § 2K1.4(a)(3) would only yield a base offense level of 19, less than that under § 2K1.4(a)(1), which is 24. Appellant does not dispute this calculation or otherwise present his own § 2K1.4(a)(3) calculation, nor was there any discussion of this issue during the sentencing hearing. Assuming, without deciding, that calculation under § 2K1.4(a)(3) would have yielded only a base offense level of 19, we conclude that the district court correctly applied § 2K1.4(a)(1) because it yielded the highest base offense level based on its finding that Appellant knowingly created a substantial risk of bodily injury. Cf. Mizrachi, 48 F.3d at 656 (affirming district court's application of § 2K1.4(a)(3) in sentencing defendant for arson, mail fraud, and money laundering offenses where facts yielded an initial base offense level of 35).