1995 Guidelines Manual

Chapter Two - PART S - MONEY LAUNDERING AND MONETARY TRANSACTION REPORTING

Historical Note: Introductory Commentary to this Part, effective November 1, 1987, was deleted effective November 1, 1990 (see Appendix C, amendment 342).

2S1.1.Laundering of Monetary Instruments

(a)Base Offense Level:

(1)23, if convicted under 18 U.S.C. 1956(a)(1)(A), (a)(2)(A), or (a)(3)(A);

(2)20, otherwise.

(b)Specific Offense Characteristics

(1)If the defendant knew or believed that the funds were the proceeds of an unlawful activity involving the manufacture, importation, or distribution of narcotics or other controlled substances, increase by 3 levels.

(2)If the value of the funds exceeded $100,000, increase the offense level as follows:

Value (Apply the Greatest) Increase in Level

(A)$100,000 or less no increase

(B)More than $100,000 add 1

(C)More than $200,000 add 2

(D)More than $350,000 add 3

(E)More than $600,000 add 4

(F)More than $1,000,000 add 5

(G)More than $2,000,000 add 6

(H)More than $3,500,000 add 7

(I)More than $6,000,000 add 8

(J)More than $10,000,000 add 9

(K)More than $20,000,000 add 10

(L)More than $35,000,000 add 11

(M)More than $60,000,000 add 12

(N)More than $100,000,000 add 13.

(c)Special Instruction for Fines - Organizations

(1)In lieu of the applicable amount from the table in subsection (d) of 8C2.4 (Base Fine), use:

(A)the greater of $250,000 or 100 percent of the value of the funds if subsections (a)(1) and (b)(1) are used to determine the offense level; or

(B)the greater of $200,000 or 70 percent of the value of the funds if subsections (a)(2) and (b)(1) are used to determine the offense level; or

(C)the greater of $200,000 or 70 percent of the value of the funds if subsection (a)(1) but not (b)(1) is used to determine the offense level; or

(D)the greater of $150,000 or 50 percent of the value of the funds if subsection (a)(2) but not (b)(1) is used to determine the offense level.

Commentary

Statutory Provision: 18 U.S.C. 1956.

Background: The statute covered by this guideline is a part of the Anti-Drug Abuse Act of 1986, and prohibits financial transactions involving funds that are the proceeds of "specified unlawful activity," if such transactions are intended to facilitate that activity, or conceal the nature of the proceeds or avoid a transaction reporting requirement. The maximum term of imprisonment authorized is twenty years.

In keeping with the clear intent of the legislation, this guideline provides for substantial punishment. The punishment is higher than that specified in 2S1.2 and 2S1.3 because of the higher statutory maximum, and the added elements as to source of funds, knowledge, and intent.

A higher base offense level is specified if the defendant is convicted under 18 U.S.C. 1956(a)(1)(A), (a)(2)(A), or (a)(3)(A) because those subsections apply to defendants who encouraged or facilitated the commission of further crimes. Effective November 18, 1988, 18 U.S.C. 1956(a)(1)(A) contains two subdivisions. The base offense level of 23 applies to 1956(a)(1)(A)(i) and (ii).

The amount of money involved is included as a factor because it is an indicator of the magnitude of the criminal enterprise, and the extent to which the defendant aided the enterprise. Narcotics trafficking is included as a factor because of the clearly expressed Congressional intent to adequately punish persons involved in that activity.

Historical Note: Effective November 1, 1987. Amended effective November 1, 1989 (see Appendix C, amendments 212-214); November 1, 1991 (see Appendix C, amendments 378 and 422).

2S1.2.Engaging in Monetary Transactions in Property Derived from Specified Unlawful Activity

(a)Base Offense Level: 17

(b)Specific Offense Characteristics

(1)If the defendant knew that the funds were the proceeds of:

(A)an unlawful activity involving the manufacture, importation, or distribution of narcotics or other controlled substances, increase by 5 levels; or

(B)any other specified unlawful activity (see 18 U.S.C. 1956(c)(7)), increase by 2 levels.

(2)If the value of the funds exceeded $100,000, increase the offense level as specified in 2S1.1(b)(2).

(c)Special Instruction for Fines - Organizations

(1)In lieu of the applicable amount from the table in subsection (d) of 8C2.4 (Base Fine), use:

(A)the greater of $175,000 or 60 percent of the value of the funds if subsection (b)(1)(A) is used to determine the offense level; or

(B) the greater of $150,000 or 50 percent of the value of the funds if subsection (b)(1)(B) is used to determine the offense level.

Commentary

Statutory Provisions: 18 U.S.C. 1957. For additional statutory provision(s), see Appendix A (Statutory Index).

Application Note:

1."Specified unlawful activity" is defined in 18 U.S.C. 1956(c)(7) to include racketeering offenses (18 U.S.C. 1961(1)), drug offenses, and most other serious federal crimes but does not include other money-laundering offenses.

Background: The statute covered by this guideline is a part of the Anti-Drug Abuse Act of 1986, and prohibits monetary transactions that exceed $10,000 and involve the proceeds of "specified unlawful activity" (as defined in 18 U.S.C. 1956), if the defendant knows that the funds are "criminally derived property." (Knowledge that the property is from a specified unlawful activity is not an element of the offense.) The maximum term of imprisonment specified is ten years.

The statute is similar to 18 U.S.C. 1956, but does not require that the recipient exchange or "launder" the funds, that he have knowledge that the funds were proceeds of a specified unlawful activity, nor that he have any intent to further or conceal such an activity. In keeping with the intent of the legislation, this guideline provides for substantial punishment. The offense levels are higher than in 2S1.3 because of the higher statutory maximum and the added element of knowing that the funds were criminally derived property.

The 2-level increase in subsection (b)(1)(B) applies if the defendant knew that the funds were not merely criminally derived, but were in fact the proceeds of a specified unlawful activity. Such a distinction is not made in 2S1.1, because the level of intent required in that section effectively precludes an inference that the defendant was unaware of the nature of the activity.

Historical Note: Effective November 1, 1987. Amended effective November 1, 1989 (see Appendix C, amendment 215); November 1, 1991 (see Appendix C, amendment 422).

2S1.3.Structuring Transactions to Evade Reporting Requirements; Failure to Report Cash or Monetary Transactions; Failure to File Currency and Monetary Instrument Report; Knowingly Filing False Reports

(a)Base Offense Level: 6 plus the number of offense levels from the table in 2F1.1 (Fraud and Deceit) corresponding to the value of the funds.

(b)Specific Offense Characteristics:

(1)If the defendant knew or believed that the funds were proceeds of unlawful activity, or were intended to promote unlawful activity, increase by 2 levels.

(2)If (A) subsection (b)(1) does not apply; (B) the defendant did not act with reckless disregard of the source of the funds; (C) the funds were the proceeds of lawful activity; and (D) the funds were to be used for a lawful purpose, decrease the offense level to level 6.

(c)Cross Reference

(1)If the offense was committed for the purposes of violating the Internal Revenue laws, apply the most appropriate guideline from Chapter Two, Part T (Offenses Involving Taxation) if the resulting offense level is greater than that determined above.

Commentary

Statutory Provisions: 26 U.S.C. 7203 (if a violation based upon 26 U.S.C. 6050I), 7206 (if a violation based upon 26 U.S.C. 6050I); 31 U.S.C. 5313, 5314, 5316, 5324. For additional statutory provision(s), see Appendix A (Statutory Index).

Application Note:

1.For purposes of this guideline, "value of the funds" means the amount of the funds involved in the structuring or reporting conduct. The relevant statutes require monetary reporting without regard to whether the funds were lawfully or unlawfully obtained.

Background: The offenses covered by this guideline relate to records and reports of certain transactions involving currency and monetary instruments. These reports include Currency Transaction Reports, Currency and Monetary Instrument Reports, Reports of Foreign Bank and Financial Accounts, and Reports of Cash Payments Over $10,000 Received in a Trade or Business.

Historical Note: Effective November 1, 1987. Amended effective November 1, 1989 (see Appendix C, amendments 216-218); November 1, 1991 (see Appendix C, amendments 379 and 422); November 1, 1993 (see Appendix C, amendment 490).

2S1.4. [Deleted]

Historical Note: Section 2S1.4 (Failure to File Currency and Monetary Instrument Report), effective November 1, 1991 (see Appendix C, amendments 379 and 422), was deleted by consolidation with 2S1.3 effective November 1, 1993 (see Appendix C, amendment 490).


United States Sentencing Commission