[Federal Register Volume 77, Number 92 (Friday, May 11, 2012)]
[Notices]
[Pages 28226-28235]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-11474]



[[Page 28225]]

Vol. 77

Friday,

No. 92

May 11, 2012

Part IV





United States Sentencing Commission





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Sentencing Guidelines for United States Courts; Notice

  Federal Register / Vol. 77 , No. 92 / Friday, May 11, 2012 / 
Notices  

[[Page 28226]]


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UNITED STATES SENTENCING COMMISSION


Sentencing Guidelines for United States Courts

AGENCY: United States Sentencing Commission.

ACTION: Notice of submission to Congress of amendments to the 
sentencing guidelines effective November 1, 2012.

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SUMMARY: Pursuant to its authority under 28 U.S.C. Sec.  994(p), the 
Commission has promulgated amendments to the sentencing guidelines, 
policy statements, commentary, and statutory index. This notice sets 
forth the amendments and the reason for each amendment.

DATES: The Commission has specified an effective date of November 1, 
2012, for the amendments set forth in this notice.

FOR FURTHER INFORMATION CONTACT: Jeanne Doherty, Office of Legislative 
and Public Affairs, 202-502-4502. The amendments set forth in this 
notice also may be accessed through the Commission's Web site at 
www.ussc.gov.

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. Sec.  
994(a). The Commission also periodically reviews and revises previously 
promulgated guidelines pursuant to 28 U.S.C. Sec.  994(o) and generally 
submits guideline amendments to Congress pursuant to 28 U.S.C. Sec.  
994(p) not later than the first day of May each year. Absent action of 
Congress to the contrary, submitted amendments become effective by 
operation of law on the date specified by the Commission (generally 
November 1 of the year in which the amendments are submitted to 
Congress).
    Notice of proposed amendments was published in the Federal Register 
on January 19, 2012 (see 77 FR 2778). The Commission held a public 
hearing on the proposed amendments in Washington, DC, on March 14, 
2012. On April 30, 2012, the Commission submitted these amendments to 
Congress and specified an effective date of November 1, 2012.

    Authority:  28 U.S.C. Sec.  994(a), (o), and (p); USSC Rules of 
Practice and Procedure 4.1.

Patti B. Saris,
Chair.
    1. Amendment: The Commentary to Sec.  2B1.1 captioned ``Application 
Notes'' is amended in Note 3(E) by adding at the end the following:

    ``(iii) Notwithstanding clause (ii), in the case of a fraud 
involving a mortgage loan, if the collateral has not been disposed 
of by the time of sentencing, use the fair market value of the 
collateral as of the date on which the guilt of the defendant has 
been established, whether by guilty plea, trial, or plea of nolo 
contendere.
    In such a case, there shall be a rebuttable presumption that the 
most recent tax assessment value of the collateral is a reasonable 
estimate of the fair market value. In determining whether the most 
recent tax assessment value is a reasonable estimate of the fair 
market value, the court may consider, among other factors, the 
recency of the tax assessment and the extent to which the 
jurisdiction's tax assessment practices reflect factors not relevant 
to fair market value.'';

in Note 3(F) by adding at the end the following:

    ``(ix) Fraudulent Inflation or Deflation in Value of Securities 
or Commodities.--In a case involving the fraudulent inflation or 
deflation in the value of a publicly traded security or commodity, 
there shall be a rebuttable presumption that the actual loss 
attributable to the change in value of the security or commodity is 
the amount determined by--
    (I) calculating the difference between the average price of the 
security or commodity during the period that the fraud occurred and 
the average price of the security or commodity during the 90-day 
period after the fraud was disclosed to the market, and
    (II) multiplying the difference in average price by the number 
of shares outstanding.
    In determining whether the amount so determined is a reasonable 
estimate of the actual loss attributable to the change in value of 
the security or commodity, the court may consider, among other 
factors, the extent to which the amount so determined includes 
significant changes in value not resulting from the offense (e.g., 
changes caused by external market forces, such as changed economic 
circumstances, changed investor expectations, and new industry-
specific or firm-specific facts, conditions, or events).'';

in Note 12(A) by adding at the end the following:

    ``(v) One or more of the criteria in clauses (i) through (iv) 
was likely to result from the offense but did not result from the 
offense because of federal government intervention, such as a 
`bailout'.'';

in Note 12(B)(ii) by adding at the end the following:

    ``(VII) One or more of the criteria in subclauses (I) through 
(VI) was likely to result from the offense but did not result from 
the offense because of federal government intervention, such as a 
`bailout'.'';

in Note 19(A)(iv) by inserting before the period at the end the 
following: ``, such as a risk of a significant disruption of a national 
financial market'';
and in Note 19(C) by adding after the first paragraph the following new 
paragraph:

    ``For example, a securities fraud involving a fraudulent 
statement made publicly to the market may produce an aggregate loss 
amount that is substantial but diffuse, with relatively small loss 
amounts suffered by a relatively large number of victims. In such a 
case, the loss table in subsection (b)(1) and the victims table in 
subsection (b)(2) may combine to produce an offense level that 
substantially overstates the seriousness of the offense. If so, a 
downward departure may be warranted.''.

    Section 2B1.4(b) is amended by striking ``Characteristic'' and 
inserting ``Characteristics''; and by adding at the end the following:

    ``(2) If the offense involved an organized scheme to engage in 
insider trading and the offense level determined above is less than 
level 14, increase to level 14.''.

    The Commentary to Sec.  2B1.4 captioned ``Application Note'' is 
amended in the caption by striking ``Note'' and inserting ``Notes''; by 
redesignating Note 1 as Note 2 and inserting before Note 2 (as so 
redesignated) the following:

    ``1. Application of Subsection (b)(2).--For purposes of 
subsection (b)(2), an `organized scheme to engage in insider 
trading' means a scheme to engage in insider trading that involves 
considered, calculated, systematic, or repeated efforts to obtain 
and trade on inside information, as distinguished from fortuitous or 
opportunistic instances of insider trading.
    The following is a non-exhaustive list of factors that the court 
may consider in determining whether the offense involved an 
organized scheme to engage in insider trading:
    (A) The number of transactions;
    (B) The dollar value of the transactions;
    (C) The number of securities involved;
    (D) The duration of the offense;
    (E) The number of participants in the scheme (although such a 
scheme may exist even in the absence of more than one participant);
    (F) The efforts undertaken to obtain material, nonpublic 
information;
    (G) The number of instances in which material, nonpublic 
information was obtained; and
    (H) The efforts undertaken to conceal the offense.'';

in Note 2 (as so redesignated) by striking ``only''; and by adding at 
the end the following new paragraph:

    ``Furthermore, Sec.  3B1.3 should be applied if the defendant's 
employment in a position that involved regular participation or

[[Page 28227]]

professional assistance in creating, issuing, buying, selling, or 
trading securities or commodities was used to facilitate 
significantly the commission or concealment of the offense. It would 
apply, for example, to a hedge fund professional who regularly 
participates in securities transactions or to a lawyer who regularly 
provides professional assistance in securities transactions, if the 
defendant's employment in such a position was used to facilitate 
significantly the commission or concealment of the offense. It 
ordinarily would not apply to a position such as a clerical worker 
in an investment firm, because such a position ordinarily does not 
involve special skill. See Sec.  3B1.3, comment. (n. 4).''.

    The Commentary to Sec.  2B1.4 captioned ``Background'' is amended 
by adding at the end the following new paragraph:
    ``Subsection (b)(2) implements the directive to the Commission in 
section 1079A(a)(1)(A) of Public Law 111B203.''.
    Reason for Amendment: This amendment responds to the two directives 
to the Commission in the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, Public Law 111-203 (the ``Act''). The first directive 
relates to securities fraud and similar offenses, and the second 
directive relates to mortgage fraud and financial institution fraud.

Securities Fraud and Similar Offenses

    Section 1079A(a)(1)(A) of the Act directs the Commission to 
``review and, if appropriate, amend'' the guidelines and policy 
statements applicable to ``persons convicted of offenses relating to 
securities fraud or any other similar provision of law, in order to 
reflect the intent of Congress that penalties for the offenses under 
the guidelines and policy statements appropriately account for the 
potential and actual harm to the public and the financial markets from 
the offenses.'' Section 1079A(a)(1)(B) provides that in promulgating 
any such amendment the Commission shall--

    (i) Ensure that the guidelines and policy statements, 
particularly section 2B1.1(b)(14) and section 2B1.1(b)(17) (and any 
successors thereto), reflect--
    (I) The serious nature of the offenses described in subparagraph 
(A);
    (II) The need for an effective deterrent and appropriate 
punishment to prevent the offenses; and
    (III) The effectiveness of incarceration in furthering the 
objectives described in subclauses (I) and (II);
    (ii) Consider the extent to which the guidelines appropriately 
account for the potential and actual harm to the public and the 
financial markets resulting from the offenses;
    (iii) Ensure reasonable consistency with other relevant 
directives and guidelines and Federal statutes;
    (iv) Make any necessary conforming changes to guidelines; and
    (v) Ensure that the guidelines adequately meet the purposes of 
sentencing, as set forth in section 3553(a)(2) of title 18, United 
States Code.

    The amendment responds to this directive in two ways. First, the 
amendment amends the fraud guideline, Sec.  2B1.1 (Theft, Property 
Destruction, and Fraud), to provide a special rule for determining 
actual loss in cases involving the fraudulent inflation or deflation in 
the value of a publicly traded security or commodity. Case law and 
comments received by the Commission indicate that determinations of 
loss in cases involving securities fraud and similar offenses are 
complex and that a variety of different methods are in use, possibly 
resulting in unwarranted sentencing disparities.
    The amendment amends Sec.  2B1.1 to provide a special rule 
regarding how to calculate actual loss in these types of cases. 
Specifically, the amendment creates a new Application Note 3(F)(ix) 
which establishes a rebuttable presumption that ``the actual loss 
attributable to the change in value of the security or commodity is the 
amount determined by (I) calculating the difference between the average 
price of the security or commodity during the period that the fraud 
occurred and the average price of the security or commodity during the 
90-day period after the fraud was disclosed to the market, and (II) 
multiplying the difference in average price by the number of shares 
outstanding.'' The special rule further provides that, ``[i]n 
determining whether the amount so determined is a reasonable estimate 
of the actual loss attributable to the change in value of the security 
or commodity, the court may consider, among other factors, the extent 
to which the amount so determined includes significant changes in value 
not resulting from the offense (e.g., changes caused by external market 
forces, such as changed economic circumstances, changed investor 
expectations, and new industry-specific or firm-specific facts, 
conditions, or events).''
    The special rule is based upon what is sometimes referred to as the 
``modified rescissory method'' and should ordinarily provide a 
``reasonable estimate of the loss'' as required by Application Note 
3(C). This special rule is intended to provide courts a workable and 
consistent formula for calculating loss that ``resulted from the 
offense.'' See Sec.  2B1.1, comment. (n.3(A)(i)). By averaging the 
stock price during the period in which the fraud occurred and a set 90-
day period after the fraud was discovered, the special rule reduces the 
impact on the loss calculation of factors other than the fraud, such as 
overall growth or decline in the price of the stock. See, e.g., United 
States v. Bakhit, 218 F. Supp. 2d 1232 (C.D. Cal. 2002); United States 
v. Snyder, 291 F.3d 1291 (11th Cir. 2002); United States v. Brown, 595 
F.3d 498 (3d Cir. 2010); see also 15 U.S.C. 78u-4(e) (statutorily 
setting forth a similar method for loss calculation in the context of 
private securities litigation). Furthermore, applying this special rule 
could ``eliminate[], or at least reduce[], the complexity, uncertainty, 
and expense inherent in attempting to determine out-of-pocket losses on 
a case-by-case basis.'' See United States v. Grabske, 260 F. Supp. 2d. 
866, 873-74 (N.D. Cal. 2002).
    By applying a rebuttable presumption, however, the amendment also 
provides sufficient flexibility for a court to consider the extent to 
which the amount determined under the special rule includes significant 
changes in value not resulting from the offense (e.g., changes caused 
by external market forces, such as changed economic circumstances, 
changed investor expectations, and new industry-specific or firm-
specific facts, conditions, or events).
    The amendment also responds to the first directive by amending the 
insider trading guideline, Sec.  2B1.4 (Insider Trading). First, it 
provides a new specific offense characteristic if the offense involved 
an ``organized scheme to engage in insider trading.'' In such a case, 
the new specific offense characteristic provides a minimum offense 
level of 14. The commentary is also amended to provide factors the 
court may consider in determining whether the new minimum offense level 
applies.
    The amendment reflects the Commission's view that a defendant who 
engages in considered, calculated, systematic, or repeated efforts to 
obtain and trade on inside information (as opposed to fortuitous or 
opportunistic instances of insider trading) warrants, at minimum, a 
short but definite period of incarceration. Sentencing data indicate 
that when a defendant engages in an organized insider trading scheme, 
the gain from the offense ordinarily triggers an enhancement under 
Sec.  2B1.4(b)(1) of sufficient magnitude to result in a guideline 
range that requires a period of imprisonment. The amendment, however, 
ensures that the guidelines require a period of incarceration even in 
such a case involving relatively little gain.

[[Page 28228]]

    The amendment also amends the commentary to Sec.  2B1.4 to provide 
more guidance on the applicability of Sec.  3B1.3 (Abuse of Position of 
Trust or Use of Special Skill) in insider trading cases. In particular, 
the new commentary in Application Note 2 provides that Sec.  3B1.3 
should be applied if the defendant's employment in a position that 
involved regular participation or professional assistance in creating, 
issuing, buying, selling, or trading securities or commodities was used 
to facilitate significantly the commission or concealment of the 
offense. The commentary further provides examples of positions that may 
qualify for the adjustment, including a hedge fund professional who 
regularly participates in securities transactions or a lawyer who 
regularly provides professional assistance in securities transactions. 
Individuals who occupy such positions possess special knowledge 
regarding the financial markets and the rules prohibiting insider 
trading, and generally are viewed as more culpable. See Sec.  3B1.3, 
comment. (backg'd). The commentary also provides as an example of a 
position that would not qualify for the adjustment in Sec.  3B1.4 a 
clerical worker in an investment firm. Such a position ordinarily does 
not involve special skill and is not generally viewed as more culpable.

Mortgage Fraud and Financial Institution Fraud

    Section 1079A(a)(2)(A) of the Act directs the Commission to 
``review and, if appropriate, amend'' the guidelines and policy 
statements applicable to ``persons convicted of fraud offenses relating 
to financial institutions or federally related mortgage loans and any 
other similar provisions of law, to reflect the intent of Congress that 
the penalties for the offenses under the guidelines and policy 
statements ensure appropriate terms of imprisonment for offenders 
involved in substantial bank frauds or other frauds relating to 
financial institutions.'' Section 1079A(a)(2)(B) of the Act provides 
that, in promulgating any such amendment, the Commission shall--
    (i) Ensure that the guidelines and policy statements reflect--
    (I) The serious nature of the offenses described in subparagraph 
(A);
    (II) The need for an effective deterrent and appropriate punishment 
to prevent the offenses; and
    (III) The effectiveness of incarceration in furthering the 
objectives described in subclauses (I) and (II);
    (ii) Consider the extent to which the guidelines appropriately 
account for the potential and actual harm to the public and the 
financial markets resulting from the offenses;
    (iii) Ensure reasonable consistency with other relevant directives 
and guidelines and Federal statutes;
    (iv) Make any necessary conforming changes to guidelines; and
    (v) Ensure that the guidelines adequately meet the purposes of 
sentencing, as set forth in section 3553(a)(2) of title 18, United 
States Code.
    The amendment responds to this directive in two ways.
    First, the amendment adds language to the credits against loss 
rule, found in Application Note 3(E) of the commentary to Sec.  2B1.1. 
Application Note 3(E)(i) generally provides that the determination of 
loss under subsection (b)(1) shall be reduced by the money returned and 
the fair market value of the property returned and services rendered to 
the victim before the offense was detected. In the context of a case 
involving collateral pledged or otherwise provided by the defendant, 
Application Note 3(E)(ii) provides that the loss to the victim shall be 
reduced by either ``the amount the victim has recovered at the time of 
sentencing from disposition of the collateral, or if the collateral has 
not been disposed of by that time, the fair market value of the 
collateral at the time of sentencing.''
    The Commission received comment that, in cases involving mortgage 
fraud where the collateral has not been disposed of by the time of 
sentencing, the fair market value of the collateral may be difficult to 
determine and may require frequent updating, especially in cases 
involving multiple properties. The comments further indicate that the 
lack of a uniform process may result in unwarranted sentencing 
disparities.
    The amendment responds to these concerns by establishing a new 
Application Note 3(E)(iii) applicable to fraud cases involving a 
mortgage loan where the underlying collateral has not been disposed of 
by the time of sentencing. In such a case, new Application Note 
3(E)(iii) makes two changes to the calculation of credits against loss. 
First, the note changes the date on which the fair market value of the 
collateral is determined, from the time of sentencing to the date on 
which the guilt of the defendant has been established. This change is 
intended to avoid the need to reassess the fair market value of such 
collateral on multiple occasions up to the date of sentencing. Second, 
it establishes a rebuttable presumption that the most recent tax 
assessment value of the collateral is a reasonable estimate of the fair 
market value. In determining whether the tax assessment is a reasonable 
estimate of fair market value, the note further provides that the court 
may consider the recency of the tax assessment and the extent to which 
the jurisdiction's tax assessment practices reflect factors not 
relevant to fair market value, among other factors.
    By structuring the special rule in this manner, the amendment 
addresses the need to provide a uniform practicable method for 
determining fair market value of undisposed collateral while providing 
sufficient flexibility for courts to address differences among 
jurisdictions regarding how closely the most recent tax assessment 
correlates to fair market value. The Commission heard concerns, for 
example, that, in some jurisdictions, the most recent tax assessment 
may be outdated or based upon factors, such as the age or status of the 
homeowner, that have no correlation to fair market value.
    The amendment also responds to the second directive by amending the 
commentary regarding the application of Sec.  2B1.1(b)(15)(B), which 
provides an enhancement of 4 levels if the offense involved specific 
types of financial harms (e.g., jeopardizing a financial institution or 
organization). This commentary, contained in Application Note 12 to 
Sec.  2B1.1, provides a non-exhaustive list of factors the court shall 
consider in determining whether, as a result of the offense, the safety 
and soundness of a financial institution or an organization that was a 
publicly traded company or that had more than 1,000 employees was 
substantially jeopardized. For example, in the context of financial 
institutions, the court shall consider whether the financial 
institution became insolvent, was forced to reduce benefits to 
pensioners or insureds, was unable on demand to refund fully any 
deposit, payment, or investment, or was so depleted of its assets as to 
be forced to merge with another institution. Similarly, in the context 
of a covered organization, the court shall consider whether the 
organization became insolvent or suffered a substantial reduction in 
the value of its assets, filed for bankruptcy, suffered a substantial 
reduction in the value of its equity securities or its employee 
retirement accounts, or substantially reduced its workforce or employee 
pension benefits.
    The amendment amends Application Note 12 to add as a new 
consideration whether one of the listed harms was likely to result from 
the offense, but did not result from the offense because of federal 
government intervention, such as a ``bailout.'' This amendment reflects 
the Commission's intent that

[[Page 28229]]

Sec.  2B1.1(b)(15)(B) account for the risk of harm from the defendant's 
conduct and its view that a defendant should not avoid the application 
of the enhancement because the harm that was otherwise likely to result 
from the offense conduct did not occur because of fortuitous federal 
government intervention.

Departure Provisions

    Finally, the amendment also responds to the Act's directives by 
amending the departure provisions in Sec.  2B1.1 to provide two 
examples of cases in which a departure may be warranted.
    First, the amendment amends Application Note 19(A)(iv), which 
provides that an upward departure may be warranted if the offense 
created a risk of substantial loss beyond the loss determined for 
purposes of subsection (b)(1). The amendment adds ``risk of a 
significant disruption of a national financial market'' as an example 
of such a risk. This part of the amendment responds to the requirement 
in the Act to consider whether the guidelines applicable to the 
offenses covered by the directives appropriately ``account for the 
potential and actual harm to the public and the financial markets[.]''
    The amendment also amends Application Note 19(C), which provides 
that a downward departure may be warranted if the offense level 
substantially overstates the seriousness of the offense, by adding an 
example of a case in which such a departure may be appropriate. The 
example provides that ``a securities fraud involving a fraudulent 
statement made publicly to the market may produce an aggregate loss 
amount that is substantial but diffuse, with relatively small loss 
amounts suffered by a relatively large number of victims,'' and that, 
``in such a case, the loss table in subsection (b)(1) and the victims 
table in subsection (b)(2) may combine to produce an offense level that 
substantially overstates the seriousness of the offense.'' This part of 
the amendment responds to concerns raised in comment and case law that 
the cumulative impact of the loss table and the victims table may 
overstate the seriousness of the offense in certain cases.
    2. Amendment: The Commentary to Sec.  2D1.1 captioned ``Application 
Notes'' is amended in Note 10(D) in the subdivision captioned ``Cocaine 
and Other Schedule I and II Stimulants (and their immediate 
precursors)'' by inserting after the entry relating to N-N-
Dimethylamphetamine the following new entry:

``1 gm of N-Benzylpiperazine = 100 gm of marihuana''.

    Reason for Amendment: This amendment responds to concerns raised by 
the Second Circuit Court of Appeals and others regarding the sentencing 
of offenders convicted of offenses involving BZP (N-Benzylpiperazine), 
which is a Schedule I stimulant. See United States v. Figueroa, 647 
F.3d 466 (2d Cir. 2011). The amendment establishes a marijuana 
equivalency for BZP offenses in the Drug Equivalency Table provided in 
Application Note 10(D) in Sec.  2D1.1 (Unlawful Manufacturing, 
Importing, Exporting, or Trafficking (Including Possession with Intent 
to Commit These Offenses); Attempt or Conspiracy). The marijuana 
equivalency established by the amendment provides that 1 gram of BZP 
equals 100 grams of marijuana.
    Prior to the amendment, the Drug Equivalency Table did not include 
a marijuana equivalency for BZP. As a result, in offenses involving 
BZP, the court determined the base offense level using the marijuana 
equivalency of ``the most closely related controlled substance'' 
referenced in Sec.  2D1.1. See Sec.  2D1.1, comment. (n. 5). In 
determining the most closely related controlled substance, the 
commentary directs the court to consider (1) whether the controlled 
substance not referenced in Sec.  2D1.1 has a chemical structure that 
is substantially similar to a controlled substance that is referenced 
in Sec.  2D1.1, (2) whether the controlled substance not referenced in 
Sec.  2D1.1 has a stimulant, depressant, or hallucinogenic effect 
similar to a controlled substance referenced in the guideline, and (3) 
whether a lesser or greater quantity of the controlled substance not 
referenced in Sec.  2D1.1 is needed to produce a substantially similar 
effect as a controlled substance that is referenced in Sec.  2D1.1.
    In applying these factors, courts have reached different 
conclusions regarding which controlled substance referenced in Sec.  
2D1.1 is most closely related to BZP and have therefore used different 
marijuana equivalencies in sentencing BZP offenders. The Commission's 
review of case law and sentencing data indicate that some district 
courts have found that the controlled substance most closely related to 
BZP is amphetamine and used the marijuana equivalency for amphetamine, 
see United States v. Major, 801 F. Supp. 2d 511, 514 (E.D. Va. 2011) 
(using the marijuana equivalency for amphetamine at full potency), 
while other district courts have found that the controlled substance 
most related to BZP is MDMA, but at varying potencies. See United 
States v. Bennett, 659 F.3d 711, 715-16 (8th Cir. 2011) (affirming a 
district court's use of the marijuana equivalency for MDMA at full 
potency); United States v. Rose, 722 F. Supp. 2d 1286, 1289 (M.D. Ala. 
2010) (concluding that BZP is most closely related to MDMA, but 
imposing a variance to reflect BZP's reduced potency compared to MDMA). 
The different findings of which controlled substance is the most 
closely related to BZP, and the application of different potencies of 
those controlled substances, have resulted in courts imposing vastly 
different sentence lengths for the same conduct.
    The Commission reviewed scientific literature and received expert 
testimony and comment relating to BZP and concluded that BZP is a 
stimulant with pharmacologic properties similar to that of amphetamine, 
but is only one-tenth to one-twentieth as potent as amphetamine, 
depending on the particular user's history of drug abuse. Accordingly, 
in order to promote uniformity in sentencing BZP offenders and to 
reflect the best available scientific evidence, the amendment 
establishes a marijuana equivalency of 1 gram of BZP equals 100 grams 
of marijuana. This corresponds to one-twentieth of the marijuana 
equivalency for amphetamine, which is 1 gram of amphetamine equals 2 
kilograms (or 2,000 grams) of marijuana.
    3. Amendment: Section 2D1.11 is amended in subsection (b) by adding 
at the end the following:

    ``(6) If the defendant meets the criteria set forth in 
subdivisions (1)-(5) of subsection (a) of Sec.  5C1.2 (Limitation on 
Applicability of Statutory Minimum Sentences in Certain Cases), 
decrease by 2 levels.''.

    The Commentary to 2D1.11 captioned ``Application Notes'' is amended 
by adding at the end the following:

    ``9. Applicability of Subsection (b)(6).CThe applicability of 
subsection (b)(6) shall be determined without regard to the offense 
of conviction. If subsection (b)(6) applies, Sec.  5C1.2(b) does not 
apply. See Sec.  5C1.2(b)(2)(requiring a minimum offense level of 
level 17 if the 'statutorily required minimum sentence is at least 
five years').''.

    Reason for Amendment: This amendment adds a new specific offense 
characteristic at subsection (b)(6) of Sec.  2D1.11 (Unlawfully 
Distributing, Importing, Exporting or Possessing a Listed Chemical; 
Attempt or Conspiracy) that provides a 2-level decrease if the 
defendant meets the criteria set forth in subdivisions (1)-(5) of 
subsection (a) of Sec.  5C1.2 (Limitation on Applicability of Statutory 
Minimum Sentences in Certain Cases) (commonly referred to as the 
``safety valve'' criteria). The new specific offense characteristic

[[Page 28230]]

in Sec.  2D1.11 parallels the existing 2-level decrease at subsection 
(b)(16) of Sec.  2D1.1(Unlawful Manufacturing, Importing, Exporting, or 
Trafficking (Including Possession with Intent to Commit These 
Offenses); Attempt or Conspiracy).
    The Commission in 1995 created the 2-level reduction in Sec.  2D1.1 
for offenders who meet the safety valve criteria in response to a 
directive in section 80001 of the Violent Crime Control and Law 
Enforcement Act of 1994, Public Law 103-322. Section 80001 provided an 
exception to otherwise applicable statutory minimum sentences for 
defendants convicted of specified drug offenses and who meet the 
criteria specified in 18 U.S.C. 3553(f)(1)-(5), and directed the 
Commission to promulgate guidelines to carry out these purposes. The 
reduction in Sec.  2D1.1 initially was limited to defendants whose 
offense level was level 26 or greater, see USSG App. C, Amendment 515 
(effective November 1, 1995), but was subsequently expanded to apply to 
offenders with an offense level lower than level 26 to address 
proportionality concerns. See USSG App. C, Amendment 624 (effective 
November 1, 2001). Specifically, the Commission determined that 
limiting the applicability of the reduction to defendants with an 
offense level of level 26 or greater ``is inconsistent with the general 
principles underlying the two-level reduction * * * to provide lesser 
punishment for first time, nonviolent offenders.'' Id.
    For similar reasons of proportionality, this amendment expands 
application of the 2-level reduction to offenses involving list I and 
list II chemicals sentenced under Sec.  2D1.11. List I chemicals are 
important to the manufacture of a controlled substance and usually 
become part of the final product, while list II chemicals are generally 
used as solvents, catalysts, and reagents. See USSG Sec.  2D1.11, 
comment. (backg'd.). Section 2D1.11 is generally structured to provide 
base offense levels that are tied to, but less severe than, the base 
offense levels in Sec.  2D1.1 for offenses involving the final product. 
The Commission determined that adding the 2-level reduction for meeting 
the safety valve criteria in Sec.  2D1.11 would promote the 
proportionality the Commission has intended to achieve between 
Sec. Sec.  2D1.1 and 2D1.11.
    The amendment also adds new commentary relating to the ``safety 
valve'' reduction in Sec.  2D1.11 that is consistent with the 
commentary relating to the ``safety valve'' reduction in Sec.  2D1.1. 
See USSG Sec.  2D1.1, comment. (n. 21). The commentary makes clear that 
the new 2-level reduction in Sec.  2D1.11 applies regardless of the 
offense of conviction, and that the minimum offense level of 17 in 
subsection (b) of Sec.  5C1.2 (Limitation on Applicability of Statutory 
Minimum Sentences in Certain Cases) does not apply. Section Sec.  
5C1.2(b) provides for an offense level not less than level 17 for 
defendants who meet the criteria of subdivisions (1)-(5) of section (a) 
in Sec.  5C1.2 and for whom the statutorily required minimum sentence 
is at least 5 years. See USSG App. C, Amendment 624 (effective November 
1, 2001). Since none of the offenses referenced to Sec.  2D1.11 carries 
a statutory mandatory minimum, the minimum offense level of 17 at Sec.  
5C1.2(b) does not affect application of the new 2-level reduction in 
Sec.  2D1.11.
    4. Amendment: The Commentary to Sec.  2L1.2 captioned ``Application 
Notes'' is amended in Note 1(B)(vii) by inserting before the period at 
the end the following: ``, but only if the revocation occurred before 
the defendant was deported or unlawfully remained in the United 
States''.
    Reason for Amendment: This amendment responds to a circuit conflict 
over the application of the enhancements found at Sec.  2L1.2(b)(1)(A) 
and (B) to a defendant who was sentenced on two or more occasions for 
the same drug trafficking conviction (e.g., because of a revocation of 
probation, parole, or supervised release), such that there was a 
sentence imposed before the defendant's deportation, then an additional 
sentence imposed after the deportation. The amendment resolves the 
conflict by amending the definition of ``sentence imposed'' in 
Application Note 1(B)(vii) to Sec.  2L1.2 (Unlawfully Entering or 
Remaining in the United States) to state that the length of the 
sentence imposed includes terms of imprisonment given upon revocation 
of probation, parole, or supervised release, but ``only if the 
revocation occurred before the defendant was deported or unlawfully 
remained in the United States.''
    Section 2L1.2(b)(1) generally reflects the Commission's 
determination that both the seriousness and the timing of the prior 
offense for which the defendant was deported are relevant to assessing 
the defendant's culpability for the illegal reentry offense. A 
defendant who was deported after a conviction for a felony drug 
trafficking offense receives an enhancement under either prong (A) or 
(B) of subsection (b)(1), depending on the length of the sentence 
imposed. If the sentence imposed was more than 13 months, the defendant 
receives a 16-level enhancement to the base offense level under prong 
(A). If the sentence imposed was 13 months or less, the defendant 
receives a 12-level enhancement under prong (B). However, for 
defendants whose prior convictions are remote in time and thus do not 
receive criminal history points, these enhancements are reduced to 12 
levels and 8 levels, respectively.
    The majority of circuits that have considered the meaning of 
``sentence imposed'' in this context have held that the later, 
additional sentence imposed after deportation does not lengthen the 
sentence imposed for purposes of the subsection (b)(1) enhancement. See 
United States v. Bustillos-Pena, 612 F.3d 863 (5th Cir. 2010); United 
States v. Lopez, 634 F.3d 948 (7th Cir. 2011); United States v. 
Rosales-Garcia, 667 F.3d 1348 (10th Cir. 2012); United States v. 
Guzman-Bera, 216 F.3d 1019 (11th Cir. 2000). Under the majority 
approach, if the sentence imposed was 13 months or less before the 
defendant was deported, and was only increased to more than 13 months 
after the deportation, the defendant is not subject to the enhancement 
in prong (A) because the ``sentence imposed'' includes only the 
sentence imposed before the deportation. Under this approach, such a 
defendant receives the enhancement in prong (B) instead.
    The Second Circuit has reached the contrary conclusion, holding 
that defendants who had their sentences increased to more than 13 
months upon revocation after deportation are subject to the enhancement 
in prong (A) because the ``sentence imposed'' includes the additional 
revocation sentence imposed after deportation. See United States v. 
Compres-Paulino, 393 F.3d 116 (2d Cir. 2004).
    The amendment adopts the approach taken by the majority of 
circuits, with the result that the term of imprisonment imposed upon 
revocation counts toward the calculation of the offense level in Sec.  
2L1.2 only if it was imposed before the defendant was deported or 
unlawfully remained in the United States. According to public comment 
and testimony received by the Commission, and as courts have observed, 
the circumstances under which persons are found present in this country 
and have their probation, parole, or supervised release revoked for a 
prior offense vary widely. See Bustillos-Pena, 612 F.3d at 867-68 
(describing differences among revocation proceedings). In some 
jurisdictions, the revocation is typically based on the offender's 
illegal return, while in others, the revocation is typically based on 
the offender's committing an additional crime.

[[Page 28231]]

Furthermore, in some cases revocation proceedings commonly occur before 
the offender is sentenced on the illegal reentry offense, while in 
other cases the revocation occurs after the federal sentencing. See 
Rosales-Garcia, 667 F.3d at 1354 (observing that considering post-
deportation revocation sentences could result in disparities based on 
the ``happenstance'' of whether that revocation occurred before or 
after the prosecution for the illegal reentry offense). Therefore, 
assessing the seriousness of the prior crime based on the sentence 
imposed before deportation should result in more consistent application 
of the enhancements in Sec.  2L1.2(b)(1)(A) and (B) and promote 
uniformity in sentencing.
    5. Amendment: Section 2L2.2 is amended in subsection (b) by adding 
at the end the following:

    ``(4) (Apply the Greater):
    (A) If the defendant committed any part of the instant offense 
to conceal the defendant's membership in, or authority over, a 
military, paramilitary, or police organization that was involved in 
a serious human rights offense during the period in which the 
defendant was such a member or had such authority, increase by 2 
levels. If the resulting offense level is less than level 13, 
increase to level 13.
    (B) If the defendant committed any part of the instant offense 
to conceal the defendant's participation in (i) the offense of 
incitement to genocide, increase by 6 levels; or (ii) any other 
serious human rights offense, increase by 10 levels. If clause (ii) 
applies and the resulting offense level is less than level 25, 
increase to level 25.''.

    The Commentary to 2L2.2 captioned ``Application Notes'' is amended 
by redesignating Notes 4 and 5 as Notes 5 and 6, respectively; and by 
inserting after Note 3 the following:

    ``4. Application of Subsection (b)(4)--For purposes of 
subsection (b)(4):
    `Serious human rights offense' means (A) violations of federal 
criminal laws relating to genocide, torture, war crimes, and the use 
or recruitment of child soldiers under sections 1091, 2340, 2340A, 
2441, and 2442 of title 18, United States Code, see 28 U.S.C. Sec.  
509B(e); and (B) conduct that would have been a violation of any 
such law if the offense had occurred within the jurisdiction of the 
United States or if the defendant or the victim had been a national 
of the United States.
    `The offense of incitement to genocide' means (A) violations of 
18 U.S.C. Sec.  1091(c); and (B) conduct that would have been a 
violation of such section if the offense had occurred within the 
jurisdiction of the United States or if the defendant or the victim 
had been a national of the United States.''.

    Chapter Three, Part A is amended by adding at the end the following 
new guideline and accompanying commentary:

``Sec.  3A1.5. Serious Human Rights Offense

    If the defendant was convicted of a serious human rights 
offense, increase the offense level as follows:
    (a) If the defendant was convicted of an offense under 18 U.S.C. 
Sec.  1091(c), increase by 2 levels.
    (b) If the defendant was convicted of any other serious human 
rights offense, increase by 4 levels. If (1) death resulted, and (2) 
the resulting offense level is less than level 37, increase to level 
37.

Commentary

Application Notes:

    1. Definition.--For purposes of this guideline, `serious human 
rights offense' means violations of federal criminal laws relating 
to genocide, torture, war crimes, and the use or recruitment of 
child soldiers under sections 1091, 2340, 2340A, 2441, and 2442 of 
title 18, United States Code. See 28 U.S.C. Sec.  509B(e).
    2. Application of Minimum Offense Level in Subsection (b).--The 
minimum offense level in subsection (b) is cumulative with any other 
provision in the guidelines. For example, if death resulted and this 
factor was specifically incorporated into the Chapter Two offense 
guideline, the minimum offense level in subsection (b) may also 
apply.
    Background: This guideline covers a range of conduct considered 
to be serious human rights offenses, including genocide, war crimes, 
torture, and the recruitment or use of child soldiers. See generally 
28 U.S.C. Sec.  509B(e).
    Serious human rights offenses generally have a statutory maximum 
term of imprisonment of 20 years, but if death resulted, a higher 
statutory maximum term of imprisonment of any term of years or life 
applies. See 18 U.S.C. Sec. Sec.  1091(b), 2340A(a), 2442(b). For 
the offense of war crimes, a statutory maximum term of imprisonment 
of any term of years or life always applies. See 18 U.S.C. Sec.  
2441(a). For the offense of incitement to genocide, the statutory 
maximum term of imprisonment is five years. See 18 U.S.C. Sec.  
1091(c).''.
    Appendix A (Statutory Index) is amended by inserting after the 
line referenced to 18 U.S.C. Sec.  2425 the following:

``18 U.S.C. Sec.  2441 2X5.1''.

    Reason for Amendment: This amendment results from the 
Commission's multi-year review to ensure that the guidelines provide 
appropriate guidelines penalties for cases involving human rights 
violations. This amendment addresses human rights violators in two 
areas: defendants who are convicted of a human rights offense, and 
defendants who are convicted of immigration or naturalization fraud 
to conceal the defendant's involvement, or possible involvement, in 
a human rights offense.

Serious Human Rights Offenses

    First, the amendment addresses defendants whose instant offense 
of conviction is a ``serious human rights offense.'' In the Human 
Rights Enforcement Act of 2009, Public Law 111-122 (Dec. 22, 2009), 
Congress defined ``serious human rights offenses'' as ``violations 
of Federal criminal laws relating to genocide, torture, war crimes, 
and the use or recruitment of child soldiers under sections 1091, 
2340, 2340A, 2441, and 2442 of title 18, United States Code.'' In 
that legislation, Congress authorized a new section within the 
Department of Justice ``with responsibility for the enforcement of 
laws against suspected participants in [such] offenses.'' That 
section was established the following year, when the Human Rights 
and Special Prosecutions Section was created in the Justice 
Department's Criminal Division. Serious human rights offenses 
generally have a statutory maximum term of imprisonment of 20 years, 
but if death resulted, a higher statutory maximum term of 
imprisonment of any term of years or life applies. See 18 U.S.C. 
Sec. Sec.  1091(b), 2340A(a), 2442(b). For the offense of war 
crimes, a statutory maximum term of imprisonment of any term of 
years or life always applies. See 18 U.S.C. Sec.  2441(a). For the 
offense of incitement to genocide, the statutory maximum term of 
imprisonment is five years. See 18 U.S.C. Sec.  1091(c).
    Serious human rights offenses can be committed in a variety of 
ways, including, for example, assault, kidnapping, and murder. As a 
result, the guidelines generally have addressed these offenses by 
referencing them to a number of different Chapter Two offense 
guidelines, such as Sec. Sec.  2A1.1 (First Degree Murder), 2A1.2 
(Second Degree Murder), 2A2.1 (Assault with Intent to Commit Murder; 
Attempted Murder), 2A2.2 (Aggravated Assault) and 2A4.1 (Kidnapping, 
Abduction, Unlawful Restraint). In addition, certain of these 
Chapter Two offense guidelines use as a base offense level the 
offense level from another guideline applicable to the underlying 
conduct (e.g., Sec.  2H1.1 (Offenses Involving Individual Rights), 
which is the guideline to which genocide offenses are referenced). 
The offense of committing a war crime in violation of 18 U.S.C. 
Sec.  2441, however, has not been referenced to any guideline prior 
to this amendment. The amendment amends Appendix A (Statutory Index) 
to reference these offenses to Sec.  2X5.1 (Other Felony Offenses). 
Section 2X5.1 addresses the variety of ways in which a war crimes 
offense may be committed by generally directing the court to apply 
the most analogous offense guideline.
    The amendment also establishes a new Chapter Three adjustment at 
Sec.  3A1.5 (Serious Human Rights Offense) if the defendant was 
convicted of a serious human rights offense. The new guideline 
provides two tiers of adjustments, corresponding to the differing 
statutory penalties that apply to such offenses. The adjustment 
generally provides a 4-level increase if the defendant was convicted 
of a serious human rights offense, and a minimum offense level of 37 
if death resulted. If the defendant was convicted of an offense 
under 18 U.S.C. Sec.  1091(c) for inciting genocide, however, the 
adjustment provides a 2-level increase in light of the lesser 
statutory maximum penalty such offenses carry compared to the other 
offenses covered by this adjustment.
    The new Chapter Three adjustment accounts for the particularly 
egregious nature of serious human rights offenses while generally 
maintaining the proportionality

[[Page 28232]]

provided by the various Chapter Two guidelines that cover such 
offenses.

Immigration Fraud

    Second, the amendment addresses cases in which the offense of 
conviction is for immigration or naturalization fraud and the 
defendant committed any part of the instant offense to conceal the 
defendant's involvement, or possible involvement, in a serious human 
rights offense. These offenders are sentenced under Sec.  2L2.2 
(Fraudulently Acquiring Documents Relating to Naturalization, 
Citizenship, or Legal Resident Status for Own Use; False Personation 
or Fraudulent Marriage by Alien to Evade Immigration Law; 
Fraudulently Acquiring or Improperly Using a United States 
Passport). The offenders covered by this amendment fall into two 
categories. In the first category are defendants who concealed their 
connection to a military, paramilitary, or police organization that 
was involved in a serious human rights offense. In the second 
category are defendants who concealed having participated in a 
serious human rights offense.
    The amendment adds a new specific offense characteristic to 
Sec.  2L2.2 at subsection (b)(4) that contains two subparagraphs. 
Subparagraph (A) applies if the defendant committed any part of the 
instant offense to conceal the defendant's membership in, or 
authority over, a military, paramilitary, or police organization 
that was involved in a serious human rights offense during the 
period in which the defendant was such a member or had such 
authority, and provides a 2-level increase and a minimum offense 
level of 13. Subparagraph (B) applies if the defendant committed any 
part of the instant offense to conceal the defendant's participation 
in a serious human rights offense, and provides a 6-level increase 
if the offense was incitement to genocide, or a 10-level increase 
and minimum offense level of 25 if the offense was any other serious 
human rights offense. The amendment also adds an application note 
defining the terms ``serious human rights offense'' and ``the 
offense of incitement to genocide.''
    The new enhancement reflects the impact that such immigration 
fraud offenses can have on the ability of immigration and 
naturalization authorities to make fully informed decisions 
regarding the defendant's immigration petition, application or other 
request and is intended to ensure that the United States is not a 
safe haven for those who have committed serious human rights 
offenses.
    6. Amendment: The Commentary to Sec.  4A1.2 captioned 
``Application Notes'' is amended in Note 5 by striking ``counted. 
Such offenses are not minor traffic infractions within the meaning 
of Sec.  4A1.2(c).'' and inserting ``always counted, without regard 
to how the offense is classified. Paragraphs (1) and (2) of Sec.  
4A1.2(c) do not apply.''.
    Reason for Amendment: This amendment resolves differences among 
circuits regarding when prior sentences for the misdemeanor offenses of 
driving while intoxicated and driving under the influence (and any 
similar offenses by whatever name they are known) are counted toward 
the defendant's criminal history score.
    Convictions for driving while intoxicated and similar offenses 
encompass a range of offense conduct. For example, convictions for 
driving while intoxicated and similar offenses can be classified as 
anything from traffic infractions to misdemeanors and felonies, and 
they are subject to a broad spectrum of penalties (ranging from a fine 
to years in custody for habitual offenders). When the prior offense is 
a felony, the sentence clearly counts toward the defendant's criminal 
history score because ``[s]entences for all felony offenses are 
counted.'' See subsection (c) of Sec.  4A1.2 (Definitions and 
Instructions for Computing Criminal History). However, when the prior 
sentence is for a misdemeanor or petty offense, circuits have taken 
different approaches, in part because of language added to Sec.  
4A1.2(c)(1). See USSG App. C, Amendment 352 (effective November 1, 
1990) (adding ``careless or reckless driving'' to the offenses listed 
in Sec.  4A1.2(c)(1)).
    When the prior sentence is a misdemeanor or petty offense, Sec.  
4A1.2(c) specifies that the offense is counted, but with two 
exceptions, limited to cases in which the prior offense is on (or 
similar to an offense that is on) either of two lists. On the first 
list are offenses from ``careless or reckless driving'' to 
``trespassing.'' In such a case, the sentence is counted only if (A) 
the sentence was a term of probation of more than one year or a term of 
imprisonment of at least 30 days, or (B) the prior offense was similar 
to the instant offense. See Sec.  4A1.2(c)(1). On the second list are 
offenses from ``fish and game violations'' to ``vagrancy.'' In such a 
case, the sentence is never counted. See Sec.  4A1.2(c)(2).
    Most circuits have held that driving while intoxicated convictions, 
including misdemeanors and petty offenses, always count toward the 
criminal history score, without exception, even if the offense met the 
criteria for either of the two lists. These circuits have relied on 
Application Note 5 to Sec.  4A1.2, which has provided:

    Sentences for Driving While Intoxicated or Under the 
Influence.--Convictions for driving while intoxicated or under the 
influence (and similar offenses by whatever name they are known) are 
counted. Such offenses are not minor traffic infractions within the 
meaning of Sec.  4A1.2(c).

    See United States v. Pando, 545 F.3d 682, 683-85 (8th Cir. 2008) 
(holding that a conviction for driving while ability impaired was 
properly included in defendant's criminal history, and rejecting 
defendant's argument that his offense was similar to careless or 
reckless driving); United States v. Thornton, 444 F.3d 1163, 1165-67 
(9th Cir. 2006) (holding that driving with high blood alcohol level was 
properly included in defendant's criminal history, and rejecting 
defendant's argument that his conviction was ``similar'' to minor 
traffic infraction or public intoxication). See also United States v. 
LeBlanc, 45 F.3d 192, 195 (7th Cir. 1995) (``[A]pplication note [5] 
reflects the Sentencing Commission's conclusion 'that driving while 
intoxicated offenses are of sufficient gravity to merit inclusion in 
the defendant's criminal history, however they might be classified 
under state law.'''); United States v. Deigert, 916 F.2d 916, 918 (4th 
Cir. 1990) (holding that defendant's alcohol-related traffic offenses 
are counted under Application Note 5).
    The Second Circuit took a different approach in United States v. 
Potes-Castillo, 638 F.3d 106 (2d Cir. 2011), holding that Application 
Note 5 could be read either (1) to ``mean that, like felonies, driving 
while ability impaired sentences are always counted, without 
possibility of exception'' or (2) ``as setting forth the direction that 
driving while ability impaired sentences must not be treated as minor 
traffic infractions or local ordinance violations and excluded under 
section 4A1.2(c)(2).'' Id. at 110-11. The Second Circuit adopted the 
second reading and, accordingly, held that a prior sentence for driving 
while ability impaired ``should be treated like any other misdemeanor 
or petty offense, except that they cannot be exempted under section 
4A1.2(c)(2).'' Id. at 113. According to the Second Circuit, such a 
sentence can qualify for an exception, and therefore not be counted, 
under the first list (e.g., if it was similar to ``careless or reckless 
driving'' and the other criteria for a first-list exception were met).
    The amendment resolves the issue by amending Application Note 5 to 
clarify that convictions for driving while intoxicated and similar 
offenses are always counted, without regard to how the offenses are 
classified. Further, the amendment states plainly that paragraphs (1) 
and (2) of Sec.  4A1.2(c) do not apply.
    This amendment reflects the Commission's view that convictions for 
driving while intoxicated and other similar offenses are sufficiently 
serious to always count toward a defendant's criminal history score. 
The amendment clarifies the Commission's intent and should result in 
more consistent

[[Page 28233]]

calculation of criminal history scores among the circuits.
    7. Amendment: Section 5G1.2 is amended in subsection (b) by 
striking ``Except as otherwise required by law (see Sec.  5G1.1(a), 
(b)), the sentence imposed on each other count shall be the total 
punishment as determined in accordance with Part D of Chapter Three, 
and Part C of this Chapter.'' and inserting ``For all counts not 
covered by subsection (a), the court shall determine the total 
punishment and shall impose that total punishment on each such count, 
except to the extent otherwise required by law.''.
    The Commentary to Sec.  5G1.2 captioned ``Application Notes'' is 
amended in Note 1, in the first paragraph, by inserting before the 
period at the end of the first sentence the following: ``and 
determining the defendant's guideline range on the Sentencing Table in 
Chapter Five, Part A (Sentencing Table)''; and after the first 
paragraph, by inserting the following new paragraph: ``Note that the 
defendant's guideline range on the Sentencing Table may be affected or 
restricted by a statutorily authorized maximum sentence or a 
statutorily required minimum sentence not only in a single-count case, 
see Sec.  5G1.1 (Sentencing on a Single Count of Conviction), but also 
in a multiple-count case. See Note 3, below.''; and by redesignating 
Note 3 as Note 4 and inserting after Note 2 the following:

``3. Application of Subsection (b).--

    (A) In General.--Subsection (b) provides that, for all counts 
not covered by subsection (a), the court shall determine the total 
punishment (i.e., the combined length of the sentences to be 
imposed) and shall impose that total punishment on each such count, 
except to the extent otherwise required by law (such as where a 
statutorily required minimum sentence or a statutorily authorized 
maximum sentence otherwise requires).
    (B) Effect on Guidelines Range of Mandatory Minimum or Statutory 
Maximum.--The defendant's guideline range on the Sentencing Table 
may be affected or restricted by a statutorily authorized maximum 
sentence or a statutorily required minimum sentence not only in a 
single-count case, see Sec.  5G1.1, but also in a multiple-count 
case.
    In particular, where a statutorily required minimum sentence on 
any count is greater than the maximum of the applicable guideline 
range, the statutorily required minimum sentence on that count shall 
be the guideline sentence on all counts. See Sec.  5G1.1(b). 
Similarly, where a statutorily required minimum sentence on any 
count is greater than the minimum of the applicable guideline range, 
the guideline range for all counts is restricted by that statutorily 
required minimum sentence. See Sec.  5G1.1(c)(2) and accompanying 
Commentary.
    However, where a statutorily authorized maximum sentence on a 
particular count is less than the minimum of the applicable 
guideline range, the sentence imposed on that count shall not be 
greater than the statutorily authorized maximum sentence on that 
count. See Sec.  5G1.1(a).
    (C) Examples.--The following examples illustrate how subsection 
(b) applies, and how the restrictions in subparagraph (B) operate, 
when a statutorily required minimum sentence is involved.
    Defendant A and Defendant B are each convicted of the same four 
counts. Counts 1, 3, and 4 have statutory maximums of 10 years, 20 
years, and 2 years, respectively. Count 2 has a statutory maximum of 
30 years and a mandatory minimum of 10 years.
    For Defendant A, the court determines that the final offense 
level is 19 and the defendant is in Criminal History Category I, 
which yields a guideline range on the Sentencing Table of 30 to 37 
months. Because of the 10-year mandatory minimum on Count 2, 
however, Defendant A's guideline sentence is 120 months. See 
subparagraph (B), above. After considering that guideline sentence, 
the court determines that the appropriate `total punishment' to be 
imposed on Defendant A is 120 months. Therefore, subsection (b) 
requires that the total punishment of 120 months be imposed on each 
of Counts 1, 2, and 3. The sentence imposed on Count 4 is limited to 
24 months, because a statutory maximum of 2 years applies to that 
particular count.
    For Defendant B, in contrast, the court determines that the 
final offense level is 30 and the defendant is in Criminal History 
Category II, which yields a guideline range on the Sentencing Table 
of 108 to 135 months. Because of the 10-year mandatory minimum on 
Count 2, however, Defendant B's guideline range is restricted to 120 
to 135 months. See subparagraph (B), above. After considering that 
restricted guideline range, the court determines that the 
appropriate `total punishment' to be imposed on Defendant B is 130 
months. Therefore, subsection (b) requires that the total punishment 
of 130 months be imposed on each of Counts 2 and 3. The sentences 
imposed on Counts 1 and 4 are limited to 120 months (10 years) and 
24 months (2 years), respectively, because of the applicable 
statutory maximums.
    (D) Special Rule on Resentencing.--In a case in which (i) the 
defendant's guideline range on the Sentencing Table was affected or 
restricted by a statutorily required minimum sentence (as described 
in subparagraph (B)), (ii) the court is resentencing the defendant, 
and (iii) the statutorily required minimum sentence no longer 
applies, the defendant's guideline range for purposes of the 
remaining counts shall be redetermined without regard to the 
previous effect or restriction of the statutorily required minimum 
sentence.''.

    Reason for Amendment: This amendment responds to an application 
issue regarding the applicable guideline range in a case in which the 
defendant is sentenced on multiple counts of conviction, at least one 
of which involves a mandatory minimum sentence that is greater than the 
minimum of the otherwise applicable guideline range. The issue arises 
under Sec.  5G1.2 (Sentencing on Multiple Counts of Conviction) when at 
least one count in a multiple-count case involves a mandatory minimum 
sentence that affects the otherwise applicable guideline range. In such 
cases, circuits differ over whether the guideline range is affected 
only for the count involving the mandatory minimum or for all counts in 
the case.
    The Fifth Circuit has held that, in such a case, the effect on the 
guideline range applies to all counts in the case. See United States v. 
Salter, 241 F.3d 392, 395-96 (5th Cir. 2001). In that case, the 
guideline range on the Sentencing Table was 87 to 108 months, but one 
of the three counts carried a mandatory minimum sentence of 10 years 
(120 months), which resulted in a guideline sentence of 120 months. The 
Fifth Circuit instructed the district court that the appropriate 
guideline sentence was 120 months on each of the three counts.
    The Ninth Circuit took a different approach in United States v. 
Evans-Martinez, 611 F.3d 635 (9th Cir. 2010), holding that, in such a 
case, ``a mandatory minimum sentence becomes the starting point for any 
count that carries a mandatory minimum sentence higher than what would 
otherwise be the Guidelines sentencing range,'' but ``[a]ll other 
counts * * * are sentenced based on the Guidelines sentencing range, 
regardless [of] the mandatory minimum sentences that apply to other 
counts.'' See id. at 637. The Ninth Circuit stated that it would be 
more ``logical'' to follow the Fifth Circuit's approach but ``such 
logic is overcome by the precise language of the Sentencing 
Guidelines''. See id.
    The District of Columbia Circuit appears to follow an approach 
similar to the Ninth Circuit. See United States v. Kennedy, 133 F.3d 
53, 60-61 (DC Cir. 1998) (one of two counts carried a mandatory 
sentence of life imprisonment; district court treated life imprisonment 
as the guidelines sentence for both counts; Court of Appeals reversed, 
holding that the appropriate guidelines range for the other count was 
262 to 327 months).
    The amendment adopts the approach followed by the Fifth Circuit and 
makes three changes to Sec.  5G1.2. First, it amends Sec.  5G1.2(b) to 
clarify that the court is to determine the total punishment and impose 
that total punishment on each count, except to the extent otherwise 
required by law.

[[Page 28234]]

    Second, it amends the Commentary to clarify that the defendant's 
guideline range in a multiple-count case may be restricted by a 
mandatory minimum penalty or statutory maximum penalty (i.e., a 
mandatory minimum may increase the bottom of the otherwise applicable 
guideline range and a statutory maximum may decrease the top of the 
otherwise applicable guideline range) in a manner similar to how the 
guideline range in a single-count case may be restricted by a minimum 
or maximum penalty under Sec.  5G1.1 (Sentencing on a Single Count of 
Conviction). Specifically, it clarifies that when any count involves a 
mandatory minimum that restricts the defendant's guideline range, the 
guideline range is restricted as to all counts. It also provides 
examples of how these restrictions operate.
    Third, it amends the commentary to clarify that in a case in which 
(1) a defendant's guideline range was affected or restricted by a 
mandatory minimum penalty, (2) the court is resentencing the defendant, 
and (3) the mandatory minimum sentence no longer applies, the court 
shall redetermine the defendant's guideline range for purposes of the 
remaining counts without regard to the mandatory minimum penalty.
    These changes resolve the application issue by clarifying the 
manner in which the Commission intended this guideline to operate, and 
by providing examples similar to those used in training probation 
officers and judges. When there is only one count, the guidelines 
provide a single guideline range, and that range may be restricted if a 
mandatory minimum is involved, as described in Sec.  5G1.1 (Sentencing 
on a Single Count of Conviction). When there is more than one count, 
the guidelines also provide a single guideline range, and that range 
also may be restricted if a mandatory minimum is involved. These 
changes provide clarity and consistency for cases in which a mandatory 
minimum is present and are intended to ensure that sentencing courts 
resolve multiple-count cases in a straightforward, logical manner, with 
a single guideline range, a single set of findings and reasons, and a 
single set of departure and variance considerations.
    8. Amendment: Chapter Five, Part K, Subpart 2 is amended by 
striking Sec.  5K2.19 and its accompanying commentary as follows:

``Sec.  5K2.19. Post-Sentencing Rehabilitative Efforts (Policy 
Statement)

    Post-sentencing rehabilitative efforts, even if exceptional, 
undertaken by a defendant after imposition of a term of imprisonment 
for the instant offense are not an appropriate basis for a downward 
departure when resentencing the defendant for that offense. (Such 
efforts may provide a basis for early termination of supervised 
release under 18 U.S.C. Sec.  3583(e)(1).)

Commentary

    Background: The Commission has determined that post-sentencing 
rehabilitative measures should not provide a basis for downward 
departure when resentencing a defendant initially sentenced to a term 
of imprisonment because such a departure would (1) be inconsistent with 
the policies established by Congress under 18 U.S.C. Sec.  3624(b) and 
other statutory provisions for reducing the time to be served by an 
imprisoned person; and (2) inequitably benefit only those who gain the 
opportunity to be resentenced de novo.''.
    Reason for Amendment: The Commission's policy statement at Sec.  
5K2.19 (Post-Sentencing Rehabilitative Efforts) (Policy Statement) 
prohibits the consideration of post-sentencing rehabilitative efforts 
as a basis for downward departure when resentencing a defendant. 
Section 5K2.19 was promulgated in 2000 in response to a circuit 
conflict regarding whether sentencing courts may consider such 
rehabilitative efforts while in prison or on probation as a basis for 
downward departure at resentencing following an appeal. See USSG App. 
C, Amendment 602 (effective November 1, 2000). This amendment repeals 
Sec.  5K2.19. The amendment responds to the Supreme Court's decision in 
Pepper v. United States, 131 S. Ct. 1229 (2011), which, in part relying 
on 18 U.S.C. Sec.  3661, held among other things that ``when a 
defendant's sentence has been set aside on appeal, a district court at 
resentencing may consider evidence of the defendant's postsentencing 
rehabilitation.'' The amendment repeals the policy statement in light 
of the Pepper decision.
    9. Amendment: Section 2P1.2 is amended in subsection (a)(3) by 
inserting after ``currency,'' the following: ``a mobile phone or 
similar device,''.
    The Commentary to Sec.  2P1.2 captioned ``Application Notes'' is 
amended by redesignating Notes 1 and 2 as Notes 2 and 3, respectively, 
and by inserting at the beginning the following:

    ``1. In this guideline, the term `mobile phone or similar 
device' means a phone or other device as described in 18 U.S.C. 
Sec.  1791(d)(1)(F).''.
The Commentary to Sec.  2T2.1 captioned ``Statutory Provisions'' is 
amended by inserting ``15 U.S.C. Sec.  377,'' before ``26 U.S.C.''.
    The Commentary to Sec.  2T2.2 captioned ``Statutory Provisions'' is 
amended by inserting ``15 U.S.C. Sec.  377,'' before ``26 U.S.C.''.
    Appendix A (Statutory Index) is amended by inserting after the line 
referenced to 15 U.S.C. Sec.  158 the following:
``15 U.S.C. Sec.  377 2T2.1, 2T2.2'';
    by inserting after the line referenced to 18 U.S.C. Sec.  43 the 
following:
``18 U.S.C. Sec.  48 2G3.1'';
    by inserting after the line referenced to 18 U.S.C. Sec.  1153 the 
following:
``18 U.S.C. Sec.  1158 2B1.1, 2B5.3
18 U.S.C. Sec.  1159 2B1.1'';
    by inserting after the line referenced to 18 U.S.C. Sec.  1716D the 
following:
``18 U.S.C. Sec.  1716E 2T2.2''; and
    by striking the lines referenced to 41 U.S.C. Sec.  53, 54, and 
423(e) as follows:
``41 U.S.C. Sec.  53 2B4.1
41 U.S.C. Sec.  542B4.1
41 U.S.C. Sec.  423(e) 2B1.1, 2C1.1''; and by inserting the following:
``41 U.S.C. Sec.  2102 2B1.1, 2C1.1
41 U.S.C. Sec.  2105 2B1.1, 2C1.1
41 U.S.C. Sec.  8702 2B4.1
41 U.S.C. Sec.  8707 2B4.1''.
    Reason for Amendment: This amendment responds to miscellaneous 
issues arising from recently enacted legislation.

Cell Phone Contraband Act of 2010

    First, the amendment responds to the Cell Phone Contraband Act of 
2010, Public Law 111-225 (enacted August 10, 2010), which amended 18 
U.S.C. Sec.  1791 (Providing or possessing contraband in prison) to 
make it a class A misdemeanor to provide a mobile phone or similar 
device to an inmate, or for an inmate to possess a mobile phone or 
similar device. Offenses under section 1791 are referenced in Appendix 
A (Statutory Index) to Sec.  2P1.2 (Providing or Possessing Contraband 
in Prison). The penalty structure of section 1791 is based on the type 
of contraband involved, and the other class A misdemeanors in section 
1791 receive a base offense level of 6 in Sec.  2P1.2. Under the 
amendment, the class A misdemeanor in section 1791 that applies when 
the contraband is a cell phone will also receive a base offense level 
of 6 in Sec.  2P1.2. This change maintains the relationship between the

[[Page 28235]]

penalty structures of the statute and the guideline.

Prevent All Cigarette Trafficking Act of 2009

    Second, the amendment responds to the Prevent All Cigarette 
Trafficking Act of 2009 (PACT Act), Public Law 111-154 (enacted March 
31, 2010). The PACT Act made a series of revisions to the Jenkins Act, 
15 U.S.C. Sec.  375 et seq., which is one of several laws governing the 
sale, shipment and taxation of cigarettes and smokeless tobacco.
    The PACT Act raised the criminal penalty at 15 U.S.C. Sec.  377 for 
a knowing violation of the Jenkins Act from a misdemeanor to a felony 
with a statutory maximum term of imprisonment of 3 years. The amendment 
amends Appendix A (Statutory Index) to reference section 377 offenses 
to Sec.  2T2.1 (Non-Payment of Taxes) and Sec.  2T2.2 (Regulatory 
Offenses). These two guidelines are the most analogous guidelines for a 
section 377 offense because the offense may involve either non-payment 
of taxes or regulatory offenses. Accordingly, the amendment also amends 
the Commentary to Sec. Sec.  2T2.1 and 2T2.2 to add section 377 to 
their lists of statutory provisions. These lists indicate that Sec.  
2T2.1 applies if the conduct constitutes non-payment, evasion, or 
attempted evasion of taxes, and Sec.  2T2.2 applies if the conduct is 
tantamount to a recordkeeping violation rather than an effort to evade 
payment of taxes.
    The PACT Act also created a new class A misdemeanor at 18 U.S.C. 
Sec.  1716E, prohibiting the knowing shipment of cigarettes and 
smokeless tobacco through the United States mail. The amendment amends 
Appendix A (Statutory Index) to reference section 1716E offenses to 
Sec.  2T2.2. Section 2T2.2 is the most analogous guideline because 
offenses under section 1716E are regulatory offenses.

Animal Crush Video Prohibition Act of 2010

    Third, the amendment responds to the Animal Crush Video Prohibition 
Act of 2010, Public Law 111-294 (enacted December 9, 2010), which 
substantially revised the criminal offense at 18 U.S.C. Sec.  48 
(Animal crush videos). Section 48 makes it a crime to create or 
distribute an ``animal crush video,'' which is defined by the statute 
in a manner that requires, among other things, that the depiction be 
obscene. The maximum term of imprisonment for a section 48 offense is 7 
years. The amendment amends Appendix A (Statutory Index) to reference 
section 48 offenses to Sec.  2G3.1 (Importing, Mailing, or Transporting 
Obscene Matter; Transferring Obscene Matter to a Minor; Misleading 
Domain Names). Section 2G3.1 is the most analogous guideline because 
obscenity is an element of section 48 offenses.

Indian Arts and Crafts Amendments Act of 2010

    Fourth, the amendment responds to the Indian Arts and Crafts 
Amendments Act of 2010, Public Law 111-211 (enacted July 29, 2010), 
which amended the criminal offense at 18 U.S.C. Sec.  1159 
(Misrepresentation of Indian produced goods and services) to reduce 
penalties for first offenders when the value of the goods involved is 
less than $1,000. The maximum term of imprisonment under section 1159 
had been 5 years for a first offender and 15 years for a repeat 
offender. The Act retained this penalty structure, except that the 
statutory maximum term of imprisonment for a first offender was reduced 
to 1 year in a case in which the value of the goods involved is less 
than $1,000. The amendment amends Appendix A (Statutory Index) to 
reference section 1159 offenses to Sec.  2B1.1 (Theft, Property 
Destruction, and Fraud). Section 2B1.1 is the most analogous guideline 
because an offense under section 1159 has elements of fraud and deceit.
    The amendment also addresses an existing offense, 18 U.S.C. Sec.  
1158 (Counterfeiting Indian Arts and Crafts Board trade mark), which 
makes it a crime to counterfeit or unlawfully affix a Government 
trademark used or devised by the Indian Arts and Crafts Board or to 
make any false statement for the purpose of obtaining the use of any 
such mark. The maximum term of imprisonment under section 1158 is 5 
years for a first offender and 15 years for a repeat offender. The 
amendment amends Appendix A (Statutory Index) to reference section 1158 
offenses to both Sec. Sec.  2B1.1 and 2B5.3 (Criminal Infringement of 
Copyright or Trademark). These two guidelines are the most analogous 
guidelines because an offense under section 1158 contains alternative 
sets of elements, one of which involves trademark infringement and one 
of which involves false statements.

Public Contracting Offenses

    Finally, the amendment responds to Public Law 111-350 (enacted 
January 4, 2011), which enacted certain laws relating to public 
contracts as a new positive-law title of the Code--title 41, ``Public 
Contracts''. As part of this codification, two criminal offenses, 41 
U.S.C. Sec.  53 and 423(a)B(b), and their respective penalty 
provisions, 41 U.S.C. 54 and 423(e), were given new title 41 section 
numbers: Sections 8702 and 8707 for sections 53 and 54, respectively, 
and sections 2102 and 2105 for sections 423(a)-(b) and 423(e), 
respectively. The substantive offenses and their related penalties did 
not change. The amendment makes changes to Appendix A (Statutory Index) 
to reflect the renumbering and includes a reference for the new section 
2102, whose predecessor section 423(a)-(b) was not referenced in 
Appendix A. The changes are technical.

[FR Doc. 2012-11474 Filed 5-10-12; 8:45 am]
BILLING CODE 2210-40-P