Opinion ID: 75831
Heading Depth: 2
Heading Rank: 3

Heading: Grouping of Money Laundering and Fraud Counts

Text: 11 Finally, Descent contends that the district court erred by not grouping the money laundering counts with the fraud counts for sentencing purposes under USSG § 3D1.2. Specifically, Descent argues that Amendment 634 to the sentencing guidelines, see USSG Supp. to App. C, amend. 634, at 229-36 (2001), applies to this case and requires grouping of his money laundering and fraud convictions. Reviewing de novo the district court's application of the sentencing guidelines, see, e.g., United States v. Rodriguez, 279 F.3d 947, 951 (11th Cir.2002), we find no reversible error. 12 When reviewing the district court's application of the sentencing guidelines, we apply the version of the guidelines in effect on the date of the sentencing hearing. See United States v. Steele, 178 F.3d 1230, 1237 (11th Cir.1999). Subsequent amendments that clarify the guidelines, however, should be considered on appeal regardless of the date of sentencing. See United States v. Gunby, 112 F.3d 1493, 1499 n. 9 (11th Cir.1997). Clarifying amendments do not effect a substantive change, but provide persuasive evidence of how the Sentencing Commission originally envisioned application of the relevant guideline. Burke v. United States, 152 F.3d 1329, 1332 (11th Cir.1998). Because Amendment 634 became effective on November 1, 2001, after the date of Descent's sentencing hearing, we must decide whether it clarifies USSG § 2S1.1 or substantively changes it. 13 Although this is an issue of first impression in our circuit, three of our sister circuits have concluded that Amendment 634 effects a substantive change to the guidelines. See United States v. King, 280 F.3d 886 (8th Cir.2002); United States v. McIntosh, 280 F.3d 479 (5th Cir.2002); United States v. Sabbeth, 277 F.3d 94 (2d Cir.2002). We agree with the reasoning of these decisions. 14 Amendment 634, among other things, added the following application note to USSG § 2S1.1: In a case in which the defendant is convicted of a count of laundering funds and a count for the underlying offense from which the laundered funds were derived, the counts shall be grouped pursuant to subsection (c) of § 3D1.2 (Groups of Closely-Related Counts). USSG § 2S1.1, comment. (n. 6) (2001); see also USSG Supp. to App. C, amend. 634, at 235-36 (2001). Arguing that Amendment 634 is a clarifying amendment, Descent focuses on the above-quoted Application Note 6 in support of his argument that his money laundering and fraud convictions should be grouped. By focusing on this application note alone, however, Descent misunderstands the significance of the amendment as a whole. Amendment 634 does not simply provide for grouping; rather, as explained by the Second Circuit, it redefines the way in which the offense level associated with the crime of money-laundering is calculated, so that the offense level for money-laundering may now be dependent upon the offense level assigned to the underlying offense. Sabbeth, 277 F.3d at 97. 15 The prior version of USSG § 2S1.1 set the base offense level for money laundering at either 23 or 20, depending upon which subsection of 18 U.S.C. § 1956 provided the basis for conviction. See USSG § 2S1.1(a) (1998). The base offense level was not in any way dependent on the underlying offense from which the funds were derived. Additionally, the former guidelines contained a separate sentencing provision, setting the base offense level at 17, for engaging in monetary transactions in violation of 18 U.S.C. § 1957. See USSG § 2S1.2(a) (1998). The current version, however, deletes § 2S1.2 in its entirety and provides a single guideline for violations of both 18 U.S.C. § 1956 and 18 U.S.C. § 1957. Under this new guideline, the base offense level for money laundering is the offense level for the underlying offense, provided the defendant committed that offense and the offense level can be determined. See USSG § 2S1.1(a) (2001). Thus, under the current guidelines, the offense level for money laundering is related directly to the underlying offense, and Application Note 6 simply reflects that substantive change by providing for grouping under § 3D1.2(c). See USSG § 3D1.2(c) (2001) (providing for grouping [w]hen one of the counts embodies conduct that is treated as a specific offense characteristic in, or other adjustment to, the guideline applicable to another of the counts). 16 Moreover, the commentary to Amendment 634 does not state that it is intended to be a clarifying amendment. Rather, the commentary explains that the amendment addresses concerns that the prior penalty structure, by failing to account for the underlying offense, did not adequately reflect the culpability of the defendant or the seriousness of the money laundering activity. See USSG Supp. to App. C, amend. 634, at 233-34 (2001). To alleviate those concerns, the amendment is designed to promote proportionality by providing for increased penalties for defendants who launder funds derived from more serious underlying criminal conduct.... Id. at 234. These statements reflect a substantive change in the punishment for money laundering offenses. See McIntosh, 280 F.3d at 485. Finally, we note that Amendment 634 is not included in the list of amendments to be applied retroactively, see USSG § 1B1.10(c) (2001), further indicating that it is not intended to be a clarifying amendment. 17 For the foregoing reasons, we conclude that Amendment 634 effects a substantive change in the guidelines, rather than simply clarifying them, and does not apply retroactively to this case. The district court properly applied the guidelines in effect at the time of Descent's sentencing.