617

AMENDMENT 617

Amendment: Chapter Two is amended by striking the heading to Part B, the heading to Subpart 1 of Part B, and the Introductory Commentary to such subpart as follows:

" PART B - OFFENSES INVOLVING PROPERTY

1. THEFT, EMBEZZLEMENT, RECEIPT OF STOLEN PROPERTY, AND PROPERTY DESTRUCTION

Introductory Commentary

These sections address the most basic forms of property offenses: theft, embezzlement, transactions in stolen goods, and simple property damage or destruction. (Arson is dealt with separately in Part K, Offenses Involving Public Safety.) These guidelines apply to offenses prosecuted under a wide variety of federal statutes, as well as offenses that arise under the Assimilative Crimes Act.",

and inserting the following:

" PART B - BASIC ECONOMIC OFFENSES

1. THEFT, EMBEZZLEMENT, RECEIPT OF STOLEN PROPERTY, PROPERTY DESTRUCTION, AND OFFENSES INVOLVING FRAUD OR DECEIT

Introductory Commentary

These sections address basic forms of property offenses: theft, embezzlement, fraud, forgery, counterfeiting (other than offenses involving altered or counterfeit bearer obligations of the United States), insider trading, transactions in stolen goods, and simple property damage or destruction. (Arson is dealt with separately in Chapter Two, Part K (Offenses Involving Public Safety)). These guidelines apply to offenses prosecuted under a wide variety of federal statutes, as well as offenses that arise under the Assimilative Crimes Act.".

Chapter Two, Part B is amended by striking §2B1.1, and its accompanying commentary, as follows:

"§2B1.1. Larceny, Embezzlement, and Other Forms of Theft; Receiving, Transporting, Transferring, Transmitting, or Possessing Stolen Property

(a) Base Offense Level: 4

(b) Specific Offense Characteristics

(1) If the loss exceeded $100, increase the offense level as follows:

(2) If the theft was from the person of another, increase by 2 levels.

(3) If (A) undelivered United States mail was taken, or the taking of such item was an object of the offense; or (B) the stolen property received, transported, transferred, transmitted, or possessed was undelivered United States mail, and the offense level as determined above is less than level 6, increase to level 6.

(4) (A) If the offense involved more than minimal planning, increase by 2 levels; or

(B) If the offense involved receiving stolen property, and the defendant was a person in the business of receiving and selling stolen property, increase by 4 levels.

(5) If the offense involved an organized scheme to steal vehicles or vehicle parts, and the offense level as determined above is less than level 14, increase to level 14.

(6) If the offense --

(A) substantially jeopardized the safety and soundness of a financial institution; or

(B) affected a financial institution and the defendant derived more than $1,000,000 in gross receipts from the offense,

increase by 4 levels. If the resulting offense level is less than level 24, increase to level 24.

(7) If the offense involved misappropriation of a trade secret and the defendant knew or intended that the offense would benefit any foreign government, foreign instrumentality, or foreign agent, increase by 2 levels.

(8) If the offense involved theft of property from a national cemetery, increase by 2 levels.

(1) If (A) a firearm, destructive device, explosive material, or controlled substance was taken, or the taking of such item was an object of the offense, or (B) the stolen property received, transported, transferred, transmitted, or possessed was a firearm, destructive device, explosive material, or controlled substance, apply §2D1.1 (Unlawful Manufacturing, Importing, Exporting, or Trafficking; Attempt or Conspiracy), §2D2.1 (Unlawful Possession; Attempt or Conspiracy), §2K1.3 (Unlawful Receipt, Possession, or Transportation of Explosive Materials; Prohibited Transactions Involving Explosive Materials), or §2K2.1 (Unlawful Receipt, Possession, or Transportation of Firearms or Ammunition; Prohibited Transactions Involving Firearms or Ammunition), as appropriate, if the resulting offense level is greater than that determined above.

Commentary

Statutory Provisions: 18 U.S.C. §§ 225, 553(a)(1), 641, 656, 657, 659, 662, 664, 1702, 1708, 1831, 1832, 2113(b), 2312-2317; 29 U.S.C. § 501(c). For additional statutory provision(s), see Appendix A (Statutory Index).

Application Notes:

1. ‘More than minimal planning,’ ‘firearm,’ and ‘destructive device’ are defined in the Commentary to §1B1.1 (Application Instructions).

‘Trade secret’ is defined in 18 U.S.C. § 1839(3).

‘Foreign instrumentality’ and ‘foreign agent’ are defined in 18 U.S.C. § 1839(1) and (2), respectively.

‘National cemetery’ means a cemetery (A) established under section 2400 of title 38, United States Code; or (B) under the jurisdiction of the Secretary of the Army, the Secretary of the Navy, the Secretary of the Air Force, or the Secretary of the Interior.

2. ‘Loss’ means the value of the property taken, damaged, or destroyed. Ordinarily, when property is taken or destroyed the loss is the fair market value of the particular property at issue. Where the market value is difficult to ascertain or inadequate to measure harm to the victim, the court may measure loss in some other way, such as reasonable replacement cost to the victim. Loss does not include the interest that could have been earned had the funds not been stolen. When property is damaged, the loss is the cost of repairs, not to exceed the loss had the property been destroyed. Examples: (1) In the case of a theft of a check or money order, the loss is the loss that would have occurred if the check or money order had been cashed. (2) In the case of a defendant apprehended taking a vehicle, the loss is the value of the vehicle even if the vehicle is recovered immediately.

If the offense involved making a fraudulent loan or credit card application, or other unlawful conduct involving a loan, a counterfeit access device, or an unauthorized access device, the loss is to be determined in accordance with the Commentary to §2F1.1 (Fraud and Deceit). For example, in accordance with Application Note 17 of the Commentary to §2F1.1, in a case involving an unauthorized access device (such as a stolen credit card), loss includes any unauthorized charge(s) made with the access device. In such a case, the loss shall be not less than $500 per unauthorized access device. For purposes of this application note, ‘counterfeit access device’ and ‘unauthorized access device’ have the meaning given those terms in 18 U.S.C. § 1029(e)(2) and (e)(3), respectively.

In certain cases, an offense may involve a series of transactions without a corresponding increase in loss. For example, a defendant may embezzle $5,000 from a bank and conceal this embezzlement by shifting this amount from one account to another in a series of nine transactions over a six-month period. In this example, the loss is $5,000 (the amount taken), not $45,000 (the sum of the nine transactions), because the additional transactions did not increase the actual or potential loss.

In stolen property offenses (receiving, transporting, transferring, transmitting, or possessing stolen property), the loss is the value of the stolen property determined as in a theft offense.

In an offense involving unlawfully accessing, or exceeding authorized access to, a ‘protected computer’ as defined in 18 U.S.C. § 1030(e)(2)(A) or (B), ‘loss’ includes the reasonable cost to the victim of conducting a damage assessment, restoring the system and data to their condition prior to the offense, and any lost revenue due to interruption of service.

In the case of a partially completed offense (e.g., an offense involving a completed theft that is part of a larger, attempted theft), the offense level is to be determined in accordance with the provisions of §2X1.1 (Attempt, Solicitation, or Conspiracy) whether the conviction is for the substantive offense, the inchoate offense (attempt, solicitation, or conspiracy), or both; see Application Note 4 in the Commentary to §2X1.1.

3. For the purposes of subsection (b)(1), the loss need not be determined with precision. The court need only make a reasonable estimate of the loss, given the available information. This estimate, for example, may be based upon the approximate number of victims and the average loss to each victim, or on more general factors such as the scope and duration of the offense.

4. Controlled substances should be valued at their estimated street value.

5. ‘Undelivered United States mail’ means mail that has not actually been received by the addressee or his agent (e.g., it includes mail that is in the addressee’s mail box).

6. ‘From the person of another’ refers to property, taken without the use of force, that was being held by another person or was within arms’ reach. Examples include pick-pocketing or non-forcible purse-snatching, such as the theft of a purse from a shopping cart.

7. Subsection (b)(5), referring to an ‘organized scheme to steal vehicles or vehicle parts,’ provides an alternative minimum measure of loss in the case of an ongoing, sophisticated operation such as an auto theft ring or ‘chop shop.’ ‘Vehicles’ refers to all forms of vehicles, including aircraft and watercraft.

8. ‘Financial institution,’ as used in this guideline, is defined to include any institution described in 18 U.S.C. §§ 20, 656, 657, 1005-1007, and 1014; any state or foreign bank, trust company, credit union, insurance company, investment company, mutual fund, savings (building and loan) association, union or employee pension fund; any health, medical or hospital insurance association; brokers and dealers registered, or required to be registered, with the Securities and Exchange Commission; futures commodity merchants and commodity pool operators registered, or required to be registered, with the Commodity Futures Trading Commission; and any similar entity, whether or not insured by the federal government. ‘Union or employee pension fund’ and ‘any health, medical, or hospital insurance association,’ as used above, primarily include large pension funds that serve many individuals (e.g., pension funds of large national and international organizations, unions, and corporations doing substantial interstate business), and associations that undertake to provide pension, disability, or other benefits (e.g., medical or hospitalization insurance) to large numbers of persons.

9. An offense shall be deemed to have ‘substantially jeopardized the safety and soundness of a financial institution’ if, as a consequence of the offense, the institution became insolvent; substantially reduced benefits to pensioners or insureds; was unable on demand to refund fully any deposit, payment, or investment; was so depleted of its assets as to be forced to merge with another institution in order to continue active operations; or was placed in substantial jeopardy of any of the above.

10. ‘The defendant derived more than $1,000,000 in gross receipts from the offense,’ as used in subsection (b)(6)(B), generally means that the gross receipts to the defendant individually, rather than to all participants, exceeded $1,000,000. ‘Gross receipts from the offense’ includes all property, real or personal, tangible or intangible, which is obtained directly or indirectly as a result of such offense. See 18 U.S.C. § 982(a)(4).

11. If the defendant is convicted under 18 U.S.C. § 225 (relating to a continuing financial crimes enterprise), the offense level is that applicable to the underlying series of offenses comprising the ‘continuing financial crimes enterprise.’

12. If subsection (b)(6)(A) or (B) applies, there shall be a rebuttable presumption that the offense involved ‘more than minimal planning.’

13. If the offense involved theft or embezzlement from an employee pension or welfare benefit plan (a violation of 18 U.S.C. § 664) and the defendant was a fiduciary of the benefit plan, an adjustment under §3B1.3 (Abuse of Position of Trust or Use of Special Skill) will apply. ‘Fiduciary of the benefit plan’ is defined in 29 U.S.C. § 1002(21)(A) to mean a person who exercises any discretionary authority or control in respect to the management of such plan or exercises authority or control in respect to management or disposition of its assets, or who renders investment advice for a fee or other direct or indirect compensation with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or who has any discretionary authority or responsibility in the administration of such plan.

If the offense involved theft or embezzlement from a labor union (a violation of 29 U.S.C. § 501(c)) and the defendant was a union officer or occupied a position of trust in the union as set forth in 29 U.S.C. § 501(a), an adjustment under §3B1.3 (Abuse of Position of Trust or Use of Special Skill) will apply.

14. In cases where the loss determined under subsection (b)(1) does not fully capture the harmfulness of the conduct, an upward departure may be warranted. For example, the theft of personal information or writings (e.g., medical records, educational records, a diary) may involve a substantial invasion of a privacy interest that would not be addressed by the monetary loss provisions of subsection (b)(1).

15. In cases involving theft of information from a ‘protected computer’, as defined in 18 U.S.C. § 1030(e)(2)(A) or (B), an upward departure may be warranted where the defendant sought the stolen information to further a broader criminal purpose.

Background: The value of the property stolen plays an important role in determining sentences for theft and other offenses involving stolen property because it is an indicator of both the harm to the victim and the gain to the defendant. Because of the structure of the Sentencing Table (Chapter 5, Part A), subsection (b)(1) results in an overlapping range of enhancements based on the loss.

The guidelines provide an enhancement for more than minimal planning, which includes most offense behavior involving affirmative acts on multiple occasions. Planning and repeated acts are indicative of an intention and potential to do considerable harm. Also, planning is often related to increased difficulties of detection and proof.

Consistent with statutory distinctions, an increased minimum offense level is provided for the theft of undelivered mail. Theft of undelivered mail interferes with a governmental function, and the scope of the theft may be difficult to ascertain.

Theft from the person of another, such as pickpocketing or non-forcible purse-snatching, receives an enhanced sentence because of the increased risk of physical injury. This guideline does not include an enhancement for thefts from the person by means of force or fear; such crimes are robberies.

A minimum offense level of 14 is provided for offenses involving an organized scheme to steal vehicles or vehicle parts. Typically, the scope of such activity is substantial (i.e., the value of the stolen property, combined with an enhancement for ‘more than minimal planning’ would itself result in an offense level of at least 14), but the value of the property is particularly difficult to ascertain in individual cases because the stolen property is rapidly resold or otherwise disposed of in the course of the offense. Therefore, the specific offense characteristic of ‘organized scheme’ is used as an alternative to ‘loss’ in setting the offense level.

Subsection (b)(6)(A) implements, in a broader form, the instruction to the Commission in section 961(m) of Public Law 101-73.

Subsection (b)(6)(B) implements the instruction to the Commission in section 2507 of Public Law 101-647.

Subsection (b)(8) implements the instruction to the Commission in section 2 of Public Law 105–101.".

A replacement guideline with accompanying commentary is inserted as §2B1.1 (Larceny, Embezzlement, and Other Forms of Theft; Offenses Involving Stolen Property; Property Damage or Destruction; Fraud and Deceit; Forgery; Offenses Involving Altered or Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States).

Chapter Two, Part B is amended by striking §2B1.3 and its accompanying commentary as follows:

"§2B1.3. Property Damage or Destruction

(a) Base Offense Level: 4

(b) Specific Offense Characteristics

(1) If the loss exceeded $100, increase by the corresponding number of levels from the table in §2B1.1.

(2) If undelivered United States mail was destroyed, and the offense level as determined above is less than level 6, increase to level 6.

(3) If the offense involved more than minimal planning, increase by 2 levels.

(4) If property of a national cemetery was damaged or destroyed, increase by 2 levels.

(1) If the offense involved arson, or property damage by use of explosives, apply §2K1.4 (Arson; Property Damage by Use of Explosives).

(d) Special Instruction

(1) If the defendant is convicted under 18 U.S.C. § 1030(a)(5), the minimum guideline sentence, notwithstanding any other adjustment, shall be six months’ imprisonment.

Commentary

Statutory Provisions: 18 U.S.C. §§ 1030(a)(5), 1361, 1363, 1702, 1703 (if vandalism or malicious mischief, including destruction of mail is involved). For additional statutory provision(s), see Appendix A (Statutory Index).

Application Notes:

1. ‘More than minimal planning’ is defined in the Commentary to §1B1.1 (Application Instructions).

2. Valuation of loss is discussed in the Commentary to §2B1.1 (Larceny, Embezzlement, and Other Forms of Theft).

3. ‘Undelivered United States mail’ means mail that has not been received by the addressee or his agent (e.g., it includes mail that is in the addressee’s mailbox).

4. In some cases, the monetary value of the property damaged or destroyed may not adequately reflect the extent of the harm caused. For example, the destruction of a $500 telephone line or interference with a telecommunications network may cause an interruption in service to thousands of people for several hours, with attendant life-threatening delay in the delivery of emergency medical treatment or disruption of other important governmental or private services. In such cases, an upward departure may be warranted. See §§5K2.2 (Physical Injury), 5K2.7 (Disruption of Governmental Function), and 5K2.14 (Public Welfare).

Background: Subsection (b)(4) implements the instruction to the Commission in section 2 of Public Law 105–101.

Subsection (d) implements the instruction to the Commission in section 805(c) of Public Law 104-132.".

Chapter Two is amended by striking Part F in its entirety as follows:

"PART F - OFFENSES INVOLVING FRAUD OR DECEIT

§2F1.1. Fraud and Deceit; Forgery; Offenses Involving Altered or Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States

(a) Base Offense Level: 6

(b) Specific Offense Characteristics

(1) If the loss exceeded $2,000, increase the offense level as follows:

(2) If the offense involved (A) more than minimal planning, or (B) a scheme to defraud more than one victim, increase by 2 levels.

(3) If the offense was committed through mass-marketing, increase by 2 levels.

(4) If the offense involved (A) a misrepresentation that the defendant was acting on behalf of a charitable, educational, religious or political organization, or a government agency; (B) a misrepresentation or other fraudulent action during the course of a bankruptcy proceeding; or (C) a violation of any prior, specific judicial or administrative order, injunction, decree, or process not addressed elsewhere in the guidelines, increase by 2 levels. If the resulting offense level is less than level 10, increase to level 10.

(5) If the offense involved—

(A) the possession or use of any device-making equipment;

(B) the production or trafficking of any unauthorized access device or counterfeit access device; or

(C) (i) the unauthorized transfer or use of any means of identification unlawfully to produce or obtain any other means of identification; or (ii) the possession of 5 or more means of identification that unlawfully were produced from another means of identification or obtained by the use of another means of identification,

increase by 2 levels. If the resulting offense level is less than level 12, increase to level 12.

(6) If (A) the defendant relocated, or participated in relocating, a fraudulent scheme to another jurisdiction to evade law enforcement or regulatory officials; (B) a substantial part of a fraudulent scheme was committed from outside the United States; or (C) the offense otherwise involved sophisticated means, increase by 2 levels. If the resulting offense level is less than level 12, increase to level 12.

(7) If the offense involved (A) the conscious or reckless risk of serious bodily injury; or (B) possession of a dangerous weapon (including a firearm) in connection with the offense, increase by 2 levels. If the resulting offense level is less than level 13, increase to level 13.

(8) If the offense --

(A) substantially jeopardized the safety and soundness of a financial institution; or

(B) affected a financial institution and the defendant derived more than $1,000,000 in gross receipts from the offense,

increase by 4 levels. If the resulting offense level is less than level 24, increase to level 24.

(1) If the defendant is convicted under 18 U.S.C. § 1030(a)(4), the minimum guideline sentence, notwithstanding any other adjustment, shall be six months’ imprisonment.

Commentary

Statutory Provisions: 7 U.S.C. §§ 6, 6b, 6c, 6h, 6o, 13, 23; 15 U.S.C. §§ 50, 77e, 77q, 77x, 78j, 78ff, 80b-6, 1644; 18 U.S.C. §§ 225, 285-289, 471-473, 500, 510, 659, 1001-1008, 1010-1014, 1016-1022, 1025, 1026, 1028, 1029, 1030(a)(4), 1031, 1341-1344, 2314, 2315. For additional statutory provision(s), see Appendix A (Statutory Index).

Application Notes:

1. The adjustments in §2F1.1(b)(4) are alternative rather than cumulative. If in a particular case, however, both of the enumerated factors applied, an upward departure might be warranted.

2. ‘More than minimal planning’ (subsection (b)(2)(A)) is defined in the Commentary to §1B1.1 (Application Instructions).

3. ‘Mass-marketing,’ as used in subsection (b)(3), means a plan, program, promotion, or campaign that is conducted through solicitation by telephone, mail, the Internet, or other means to induce a large number of persons to (A) purchase goods or services; (B) participate in a contest or sweepstakes; or (C) invest for financial profit. The enhancement would apply, for example, if the defendant conducted or participated in a telemarketing campaign that solicited a large number of individuals to purchase fraudulent life insurance policies.

4. ‘Scheme to defraud more than one victim,’ as used in subsection (b)(2)(B), refers to a design or plan to obtain something of value from more than one person. In this context, "victim" refers to the person or entity from which the funds are to come directly. Thus, a wire fraud in which a single telephone call was made to three distinct individuals to get each of them to invest in a pyramid scheme would involve a scheme to defraud more than one victim, but passing a fraudulently endorsed check would not, even though the maker, payee and/or payor all might be considered victims for other purposes, such as restitution.

5. Subsection (b)(4)(A) provides an adjustment for a misrepresentation that the defendant was acting on behalf of a charitable, educational, religious or political organization, or a government agency. Examples of conduct to which this factor applies would include a group of defendants who solicit contributions to a non-existent famine relief organization by mail, a defendant who diverts donations for a religiously affiliated school by telephone solicitations to church members in which the defendant falsely claims to be a fund-raiser for the school, or a defendant who poses as a federal collection agent in order to collect a delinquent student loan.

6. Subsection (b)(4)(C) provides an enhancement if the defendant commits a fraud in contravention of a prior, official judicial or administrative warning, in the form of an order, injunction, decree, or process, to take or not to take a specified action. A defendant who does not comply with such a prior, official judicial or administrative warning demonstrates aggravated criminal intent and deserves additional punishment. If it is established that an entity the defendant controlled was a party to the prior proceeding that resulted in the official judicial or administrative action, and the defendant had knowledge of that prior decree or order, this enhancement applies even if the defendant was not a specifically named party in that prior case. For example, a defendant whose business previously was enjoined from selling a dangerous product, but who nonetheless engaged in fraudulent conduct to sell the product, is subject to this enhancement. This enhancement does not apply if the same conduct resulted in an enhancement pursuant to a provision found elsewhere in the guidelines (e.g., a violation of a condition of release addressed in §2J1.7 (Commission of Offense While on Release) or a violation of probation addressed in §4A1.1 (Criminal History Category)).

If the conduct that forms the basis for an enhancement under (b)(4)(B) or (C) is the only conduct that forms the basis for an adjustment under §3C1.1 (Obstruction of Justice), do not apply an adjustment under §3C1.1.

7. Some fraudulent schemes may result in multiple-count indictments, depending on the technical elements of the offense. The cumulative loss produced by a common scheme or course of conduct should be used in determining the offense level, regardless of the number of counts of conviction. See Chapter Three, Part D (Multiple Counts).

8. Valuation of loss is discussed in the Commentary to §2B1.1 (Larceny, Embezzlement, and Other Forms of Theft). As in theft cases, loss is the value of the money, property, or services unlawfully taken; it does not, for example, include interest the victim could have earned on such funds had the offense not occurred. Consistent with the provisions of §2X1.1 (Attempt, Solicitation, or Conspiracy), if an intended loss that the defendant was attempting to inflict can be determined, this figure will be used if it is greater than the actual loss. Frequently, loss in a fraud case will be the same as in a theft case. For example, if the fraud consisted of selling or attempting to sell $40,000 in worthless securities, or representing that a forged check for $40,000 was genuine, the loss would be $40,000.

There are, however, instances where additional factors are to be considered in determining the loss or intended loss:

(a) Fraud Involving Misrepresentation of the Value of an Item or Product Substitution

A fraud may involve the misrepresentation of the value of an item that does have some value (in contrast to an item that is worthless). Where, for example, a defendant fraudulently represents that stock is worth $40,000 and the stock is worth only $10,000, the loss is the amount by which the stock was overvalued (i.e., $30,000). In a case involving a misrepresentation concerning the quality of a consumer product, the loss is the difference between the amount paid by the victim for the product and the amount for which the victim could resell the product received.

(b) Fraudulent Loan Application and Contract Procurement Cases

In fraudulent loan application cases and contract procurement cases, the loss is the actual loss to the victim (or if the loss has not yet come about, the expected loss). For example, if a defendant fraudulently obtains a loan by misrepresenting the value of his assets, the loss is the amount of the loan not repaid at the time the offense is discovered, reduced by the amount the lending institution has recovered (or can expect to recover) from any assets pledged to secure the loan. However, where the intended loss is greater than the actual loss, the intended loss is to be used.

In some cases, the loss determined above may significantly understate or overstate the seriousness of the defendant’s conduct. For example, where the defendant substantially understated his debts to obtain a loan, which he nevertheless repaid, the loss determined above (zero loss) will tend not to reflect adequately the risk of loss created by the defendant’s conduct. Conversely, a defendant may understate his debts to a limited degree to obtain a loan (e.g., to expand a grain export business), which he genuinely expected to repay and for which he would have qualified at a higher interest rate had he made truthful disclosure, but he is unable to repay the loan because of some unforeseen event (e.g., an embargo imposed on grain exports) which would have caused a default in any event. In such a case, the loss determined above may overstate the seriousness of the defendant’s conduct. Where the loss determined above significantly understates or overstates the seriousness of the defendant’s conduct, an upward or downward departure may be warranted.

In contrast to other types of cases, loss in a procurement fraud or product substitution case includes not only direct damages, but also consequential damages that were reasonably foreseeable. For example, in a case involving a defense product substitution offense, the loss includes the government’s reasonably foreseeable costs of making substitute transactions and handling or disposing of the product delivered or retrofitting the product so that it can be used for its intended purpose, plus the government’s reasonably foreseeable cost of rectifying the actual or potential disruption to government operations caused by the product substitution. Similarly, in the case of fraud affecting a defense contract award, loss includes the reasonably foreseeable administrative cost to the government and other participants of repeating or correcting the procurement action affected, plus any increased cost to procure the product or service involved that was reasonably foreseeable. Inclusion of reasonably foreseeable consequential damages directly in the calculation of loss in procurement fraud and product substitution cases reflects that such damages frequently are substantial in such cases.

(d) Diversion of Government Program Benefits

In a case involving diversion of government program benefits, loss is the value of the benefits diverted from intended recipients or uses.

(e) Davis-Bacon Act Cases

In a case involving a Davis-Bacon Act violation (a violation of 40 U.S.C. § 276a, criminally prosecuted under 18 U.S.C. § 1001), the

loss is the difference between the legally required and actual wages paid.

9. For the purposes of subsection (b)(1), the loss need not be determined with precision. The court need only make a reasonable estimate of the loss, given the available information. This estimate, for example, may be based on the approximate number of victims and an estimate of the average loss to each victim, or on more general factors, such as the nature and duration of the fraud and the revenues generated by similar operations. The offender’s gain from committing the fraud is an alternative estimate that ordinarily will underestimate the loss.

10. In the case of a partially completed offense (e.g., an offense involving a completed fraud that is part of a larger, attempted fraud), the offense level is to be determined in accordance with the provisions of §2X1.1 (Attempt, Solicitation, or Conspiracy) whether the conviction is for the substantive offense, the inchoate offense (attempt, solicitation, or conspiracy), or both; see Application Note 4 in the Commentary to §2X1.1.

11. In cases in which the loss determined under subsection (b)(1) does not fully capture the harmfulness and seriousness of the conduct, an upward departure may be warranted. Examples may include the following:

(a) a primary objective of the fraud was non-monetary; or the fraud caused or risked reasonably foreseeable, substantial non-monetary harm;

(b) false statements were made for the purpose of facilitating some other crime;

(d) the offense endangered national security or military readiness;

(e) the offense caused a loss of confidence in an important institution;

(f) the offense involved the knowing endangerment of the solvency of one or more victims.

In a few instances, the loss determined under subsection (b)(1) may overstate the seriousness of the offense. This may occur, for example, where a defendant attempted to negotiate an instrument that was so obviously fraudulent that no one would seriously consider honoring it. In such cases, a downward departure may be warranted.

12. Offenses involving access devices, in violation of 18 U.S.C. §§ 1028 and 1029, are also covered by this guideline. In such a case, an upward departure may be warranted where the actual loss does not adequately reflect the seriousness of the conduct.

Offenses involving identification documents, false identification documents, and means of identification, in violation of 18 U.S.C. § 1028, also are covered by this guideline. If the primary purpose of the offense was to violate, or assist another to violate, the law pertaining to naturalization, citizenship, or legal resident status, apply §2L2.1 (Trafficking in a Document Relating to Naturalization) or §2L2.2 (Fraudulently Acquiring Documents Relating to Naturalization), as appropriate, rather than §2F1.1.

13. If the fraud exploited vulnerable victims, an enhancement will apply. See §3A1.1 (Hate Crime Motivation or Vulnerable Victim).

14. Sometimes, offenses involving fraudulent statements are prosecuted under 18 U.S.C. § 1001, or a similarly general statute, although the offense is also covered by a more specific statute. Examples include false entries regarding currency transactions, for which §2S1.3 would be more apt, and false statements to a customs officer, for which §2T3.1 likely would be more apt. In certain other cases, the mail or wire fraud statutes, or other relatively broad statutes, are used primarily as jurisdictional bases for the prosecution of other offenses. For example, a state arson offense where a fraudulent insurance claim was mailed might be prosecuted as mail fraud. Where the indictment or information setting forth the count of conviction (or a stipulation as described in §1B1.2(a)) establishes an offense more aptly covered by another guideline, apply that guideline rather than §2F1.1. Otherwise, in such cases, §2F1.1 is to be applied, but a departure from the guidelines may be considered.

15. For purposes of subsection (b)(5)—

‘Counterfeit access device’ (A) has the meaning given that term in 18 U.S.C. § 1029(e)(2); and (B) also includes a telecommunications instrument that has been modified or altered to obtain unauthorized use of telecommunications service. ‘Telecommunications service’ has the meaning given that term in 18 U.S.C. § 1029(e)(9).

‘Device-making equipment’ (A) has the meaning given that term in 18 U.S.C. § 1029(e)(6); and (B) also includes (i) any hardware or software that has been configured as described in 18 U.S.C. § 1029(a)(9); and (ii) a scanning receiver referred to in 18 U.S.C. § 1029(a)(8). ‘Scanning receiver’ has the meaning given that term in 18 U.S.C. § 1029(e)(8).

‘Means of identification’ has the meaning given that term in 18 U.S.C. § 1028(d)(3), except that such means of identification shall be of an actual (i.e., not fictitious) individual other than the defendant or a person for whose conduct the defendant is accountable under §1B1.3 (Relevant Conduct).

‘Produce’ includes manufacture, design, alter, authenticate, duplicate, or assemble. ‘Production’ includes manufacture, design, alteration, authentication, duplication, or assembly.

‘Unauthorized access device’ has the meaning given that term in 18 U.S.C. § 1029(e)(3).

16. Subsection (b)(5)(C)(i) applies in a case in which a means of identification of an individual other than the defendant (or a person for whose conduct the defendant is accountable under §1B1.3 (Relevant Conduct)) is used without that individual’s authorization unlawfully to produce or obtain another means of identification.

Examples of conduct to which this subsection should apply are as follows:

(A) A defendant obtains an individual’s name and social security number from a source (e.g., from a piece of mail taken from the individual’s mailbox) and obtains a bank loan in that individual’s name. In this example, the account number of the bank loan is the other means of identification that has been obtained unlawfully.

(B) A defendant obtains an individual’s name and address from a source (e.g., from a driver’s license in a stolen wallet) and applies for, obtains, and subsequently uses a credit card in that individual’s name. In this example, the credit card is the other means of identification that has been obtained unlawfully.

Examples of conduct to which subsection (b)(5)(C)(i) should not apply are as follows:

(A) A defendant uses a credit card from a stolen wallet only to make a purchase. In such a case, the defendant has not used the stolen credit card to obtain another means of identification.

(B) A defendant forges another individual’s signature to cash a stolen check. Forging another individual’s signature is not producing another means of identification.

Subsection (b)(5)(C)(ii) applies in any case in which the offense involved the possession of 5 or more means of identification that unlawfully were produced or obtained, regardless of the number of individuals in whose name (or other identifying information) the means of identification were so produced or so obtained.

In a case involving unlawfully produced or unlawfully obtained means of identification, an upward departure may be warranted if the offense level does not adequately address the seriousness of the offense. Examples may include the following:

(A) The offense caused substantial harm to the victim’s reputation or credit record, or the victim suffered a substantial inconvenience related to repairing the victim’s reputation or a damaged credit record.

(B) An individual whose means of identification the defendant used to obtain unlawful means of identification is erroneously arrested or denied a job because an arrest record has been made in the individual’s name.

(C) The defendant produced or obtained numerous means of identification with respect to one individual and essentially assumed that individual’s identity.

17. In a case involving any counterfeit access device or unauthorized access device, loss includes any unauthorized charges made with the counterfeit access device or unauthorized access device. In any such case, loss shall be not less than $500 per access device. However, if the unauthorized access device is a means of telecommunications access that identifies a specific telecommunications instrument or telecommunications account (including an electronic serial number/mobile identification number (ESN/MIN) pair), and that means was only possessed, and not used, during the commission of the offense, loss shall be not less than $100 per unused means. For purposes of this application note, ‘counterfeit access device’ and ‘unauthorized access device’ have the meaning given those terms in Application Note 15.

18. For purposes of subsection (b)(6)(B), ‘United States’ means each of the 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa.

For purposes of subsection (b)(6)(C), ‘sophisticated means’ means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. For example, in a telemarketing scheme, locating the main office of the scheme in one jurisdiction but locating soliciting operations in another jurisdiction would ordinarily indicate sophisticated means. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore bank accounts also ordinarily would indicate sophisticated means.

The enhancement for sophisticated means under subsection (b)(6)(C) requires conduct that is significantly more complex or intricate than the conduct that may form the basis for an enhancement for more than minimal planning under subsection (b)(2)(A).

If the conduct that forms the basis for an enhancement under subsection (b)(6) is the only conduct that forms the basis for an adjustment under §3C1.1 (Obstruction of Justice), do not apply an adjustment under §3C1.1.

19. ‘Financial institution,’ as used in this guideline, is defined to include any institution described in 18 U.S.C. §§ 20, 656, 657, 1005-1007, and 1014; any state or foreign bank, trust company, credit union, insurance company, investment company, mutual fund, savings (building and loan) association, union or employee pension fund; any health, medical or hospital insurance association; brokers and dealers registered, or required to be registered, with the Securities and Exchange Commission; futures commodity merchants and commodity pool operators registered, or required to be registered, with the Commodity Futures Trading Commission; and any similar entity, whether or not insured by the federal government. ‘Union or employee pension fund’ and ‘any health, medical, or hospital insurance association,’ as used above, primarily include large pension funds that serve many individuals (e.g., pension funds of large national and international organizations, unions, and corporations doing substantial interstate business), and associations that undertake to provide pension, disability, or other benefits (e.g., medical or hospitalization insurance) to large numbers of persons.

20. An offense shall be deemed to have ‘substantially jeopardized the safety and soundness of a financial institution’ if, as a consequence of the offense, the institution became insolvent; substantially reduced benefits to pensioners or insureds; was unable on demand to refund fully any deposit, payment, or investment; was so depleted of its assets as to be forced to merge with another institution in order to continue active operations; or was placed in substantial jeopardy of any of the above.

21. ‘The defendant derived more than $1,000,000 in gross receipts from the offense,’ as used in subsection (b)(8)(B), generally means that the gross receipts to the defendant individually, rather than to all participants, exceeded $1,000,000. ‘Gross receipts from the offense’ includes all property, real or personal, tangible or intangible, which is obtained directly or indirectly as a result of such offense. See 18 U.S.C. § 982(a)(4).

22. If the defendant is convicted under 18 U.S.C. § 225 (relating to a continuing financial crimes enterprise), the offense level is that applicable to the underlying series of offenses comprising the ‘continuing financial crimes enterprise.’

23. If subsection (b)(5), subsection (b)(8)(A), or subsection (b)(8)(B) applies, there shall be a rebuttable presumption that the offense also involved more than minimal planning for purposes of subsection (b)(2).

If the conduct that forms the basis for an enhancement under subsection (b)(5) is the only conduct that forms the basis of an enhancement under subsection (b)(6), do not apply an enhancement under subsection (b)(6).

Background: This guideline is designed to apply to a wide variety of fraud cases. The statutory maximum term of imprisonment for most such offenses is five years. The guideline does not link offense characteristics to specific code sections. Because federal fraud statutes are so broadly written, a single pattern of offense conduct usually can be prosecuted under several code sections, as a result of which the offense of conviction may be somewhat arbitrary. Furthermore, most fraud statutes cover a broad range of conduct with extreme variation in severity.

Empirical analyses of pre-guidelines practice showed that the most important factors that determined sentence length were the amount of loss and whether the offense was an isolated crime of opportunity or was sophisticated or repeated. Accordingly, although they are imperfect, these are the primary factors upon which the guideline has been based.

The extent to which an offense is planned or sophisticated is important in assessing its potential harmfulness and the dangerousness of the offender, independent of the actual harm. A complex scheme or repeated incidents of fraud are indicative of an intention and potential to do considerable harm. In pre-guidelines practice, this factor had a significant impact, especially in frauds involving small losses. Accordingly, the guideline specifies a 2-level enhancement when this factor is present.

Use of false pretenses involving charitable causes and government agencies enhances the sentences of defendants who take advantage of victims’ trust in government or law enforcement agencies or their generosity and charitable motives. Taking advantage of a victim’s self-interest does not mitigate the seriousness of fraudulent conduct. However, defendants who exploit victims’ charitable impulses or trust in government create particular social harm. The commission of a fraud in the course of a bankruptcy proceeding subjects the defendant to an enhanced sentence because that fraudulent conduct undermines the bankruptcy process as well as harms others with an interest in the bankruptcy estate.

Offenses that involve the use of transactions or accounts outside the United States in an effort to conceal illicit profits and criminal conduct involve a particularly high level of sophistication and complexity. These offenses are difficult to detect and require costly investigations and prosecutions. Diplomatic processes often must be used to secure testimony and evidence beyond the jurisdiction of United States courts. Consequently, a minimum level of 12 is provided for these offenses.

Subsections (b)(5)(A) and(B) implement the instruction to the Commission in section 4 of the Wireless Telephone Protection Act, Public Law 105–172.

Subsection (b)(5)(C) implements the directive to the Commission in section 4 of the Identity Theft and Assumption Deterrence Act of 1998, Public Law 105–318. This subsection focuses principally on an aggravated form of identity theft known as ‘affirmative identity theft’ or ‘breeding,’ in which a defendant uses another individual’s name, social security number, or some other form of identification (the ‘means of identification’) to ‘breed’ (i.e., produce or obtain) new or additional forms of identification. Because 18 U.S.C. § 1028(d) broadly defines ‘means of identification,’ the new or additional forms of identification can include items such as a driver’s license, a credit card, or a bank loan. This subsection provides a minimum offense level of level 12, in part, because of the seriousness of the offense. The minimum offense level accounts for the fact that the means of identification that were ‘bred’ (i.e., produced or obtained) often are within the defendant’s exclusive control, making it difficult for the individual victim to detect that the victim’s identity has been ‘stolen.’ Generally, the victim does not become aware of the offense until certain harms have already occurred (e.g., a damaged credit rating or inability to obtain a loan). The minimum offense level also accounts for the non-monetary harm associated with these types of offenses, much of which may be difficult or impossible to quantify (e.g., harm to the individual’s reputation or credit rating, inconvenience, and other difficulties resulting from the offense). The legislative history of the Identity Theft and Assumption Deterrence Act of 1998 indicates that Congress was especially concerned with providing increased punishment for this type of harm.

Subsection (b)(6) implements, in a broader form, the instruction to the Commission in section 6(c)(2) of Public Law 105–184.

Subsection (b)(7)(B) implements, in a broader form, the instruction to the Commission in section 110512 of Public Law 103–322.

Subsection (b)(8)(A) implements, in a broader form, the instruction to the Commission in section 961(m) of Public Law 101–73.

Subsection (b)(8)(B) implements the instruction to the Commission in section 2507 of Public Law 101–647.

Subsection (c) implements the instruction to the Commission in section 805(c) of Public Law 104–132.

§2F1.2. Insider Trading

(a) Base Offense Level: 8

(b) Specific Offense Characteristic

(1) Increase by the number of levels from the table in §2F1.1 corresponding to the gain resulting from the offense.

Commentary

Statutory Provisions: 15 U.S.C. § 78j and 17 C.F.R. § 240.10b-5. For additional statutory provision(s), see Appendix A (Statutory Index).

Application Note:

1. Section 3B1.3 (Abuse of Position of Trust or Use of Special Skill) should be applied only if the defendant occupied and abused a position of special trust. Examples might include a corporate president or an attorney who misused information regarding a planned but unannounced takeover attempt. It typically would not apply to an ordinary ‘tippee.’

Background: This guideline applies to certain violations of Rule 10b-5 that are commonly referred to as ‘insider trading.’ Insider trading is treated essentially as a sophisticated fraud. Because the victims and their losses are difficult if not impossible to identify, the gain, i.e., the total increase in value realized through trading in securities by the defendant and persons acting in concert with him or to whom he provided inside information, is employed instead of the victims’ losses.

Certain other offenses, e.g., 7 U.S.C. § 13(e), that involve misuse of inside information for personal gain also may appropriately be covered by this guideline.".

Chapter Two, Part B, Subpart 1, is amended by adding at the end the following:

"§2B1.4. Insider Trading

(a) Base Offense Level: 8

(b) Specific Offense Characteristic

(1) If the gain resulting from the offense exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.

Commentary

Statutory Provisions: 15 U.S.C. § 78j and 17 C.F.R. § 240.10b-5. For additional statutory provision(s), see Appendix A (Statutory Index).

Application Note:

1. Application of Subsection of §3B1.3.—Section 3B1.3 (Abuse of Position of Trust or Use of Special Skill) should be applied only if the defendant occupied and abused a position of special trust. Examples might include a corporate president or an attorney who misused information regarding a planned but unannounced takeover attempt. It typically would not apply to an ordinary ‘tippee’.

Background: This guideline applies to certain violations of Rule 10b-5 that are commonly referred to as ‘insider trading’. Insider trading is treated essentially as a sophisticated fraud. Because the victims and their losses are difficult if not impossible to identify, the gain, i.e., the total increase in value realized through trading in securities by the defendant and persons acting in concert with the defendant or to whom the defendant provided inside information, is employed instead of the victims’ losses.

Certain other offenses, e.g., 7 U.S.C. § 13(e), that involve misuse of inside information for personal gain also appropriately may be covered by this guideline.".

The Commentary to §1B1.1 captioned "Application Notes" is amended in Note 1 by striking subdivision (f) as follows:

"(f) ‘More than minimal planning’ means more planning than is typical for commission of the offense in a simple form. ‘More than minimal planning’ also exists if significant affirmative steps were taken to conceal the offense, other than conduct to which §3C1.1 (Obstructing or Impeding the Administration of Justice) applies.

‘More than minimal planning’ is deemed present in any case involving repeated acts over a period of time, unless it is clear that each instance was purely opportune. Consequently, this adjustment will apply especially frequently in property offenses.

In an assault, for example, waiting to commit the offense when no witnesses were present would not alone constitute more than minimal planning. By contrast, luring the victim to a specific location, or wearing a ski mask to prevent identification, would constitute more than minimal planning.

In a commercial burglary, for example, checking the area to make sure no witnesses were present would not alone constitute more than minimal planning. By contrast, obtaining building plans to plot a particular course of entry, or disabling an alarm system, would constitute more than minimal planning.

In a theft, going to a secluded area of a store to conceal the stolen item in one’s pocket would not alone constitute more than minimal planning. However, repeated instances of such thefts on several occasions would constitute more than minimal planning. Similarly, fashioning a special device to conceal the property, or obtaining information on delivery dates so that an especially valuable item could be obtained, would constitute more than minimal planning.

In an embezzlement, a single taking accomplished by a false book entry would constitute only minimal planning. On the other hand, creating purchase orders to, and invoices from, a dummy corporation for merchandise that was never delivered would constitute more than minimal planning, as would several instances of taking money, each accompanied by false entries.";

and by redesignating subdivisions (g) through (l) as subdivisions (f) through (k), respectively.

The Commentary to §1B1.1 captioned "Application Notes" is amended in Note 4 in the second paragraph by striking the last sentence as follows:

"For example, the adjustments from §2F1.1(b)(2) (more than minimal planning) and §3B1.1 (Aggravating Role) are applied cumulatively.".

The Commentary to §1B1.2 captioned "Application Notes" is amended in Note 1 in the fourth paragraph by striking "§2B1.1 (Larceny, Embezzlement, and Other Forms of Theft)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

The Commentary to §1B1.3 captioned "Application Notes" is amended in Note 5 by striking "§2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

The Commentary to §2B2.1 captioned "Application Notes" is amended in Note 1 by striking "‘More than minimal planning,’ ‘firearm,’" and inserting "‘Firearm,’".

The Commentary to §2B2.1 captioned "Application Notes" is amended by striking the text of Note 2 as follows:

"Valuation of loss is discussed in the Commentary to §2B1.1 (Larceny, Embezzlement, and Other Forms of Theft).",

and inserting the following:

"‘Loss’ means the value of the property taken, damaged, or destroyed.".

The Commentary to §2B2.1 captioned "Application Notes" is amended by adding at the end the following:

"4. More than Minimal Planning.—‘More than minimal planning’ means more planning than is typical for commission of the offense in a simple form. ‘More than minimal planning’ also exists if significant affirmative steps were taken to conceal the offense, other than conduct to which §3C1.1 (Obstructing or Impeding the Administration of Justice) applies. ‘More than minimal planning’ shall be considered to be present in any case involving repeated acts over a period of time, unless it is clear that each instance was purely opportune. For example, checking the area to make sure no witnesses were present would not alone constitute more than minimal planning. By contrast, obtaining building plans to plot a particular course of entry, or disabling an alarm system, would constitute more than minimal planning.".

Section 2B2.3(b) is amended by striking subdivision (3) as follows:

"(3) If the offense involved invasion of a protected computer resulting in a loss exceeding $2000, increase the offense level by the number of levels from the table in §2F1.1 corresponding to the loss.",

and inserting the following:

"(3) If (A) the offense involved invasion of a protected computer; and (B) the loss resulting from the invasion (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

The Commentary to §2B2.3 captioned "Application Notes" is amended in Note 2 by striking "§2B1.1 (Larceny, Embezzlement, and Other Forms of Theft)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

The Commentary to §2B3.1 captioned "Application Notes" is amended by striking the text of Note 3 as follows:

"Valuation of loss is discussed in the Commentary to §2B1.1 (Larceny, Embezzlement, and Other Forms of Theft).",

and inserting:

"‘Loss’ means the value of the property taken, damaged, or destroyed.".

Section 2B3.3(b) is amended by striking subdivision (1) as follows:

"(1) If the greater of the amount obtained or demanded exceeded $2,000, increase by the corresponding number of levels from the table in §2F1.1.",

and inserting the following:

"(1) If the greater of the amount obtained or demanded (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

Section 2B4.1(b) is amended by striking subdivision (1) as follows:

"(1) If the greater of the value of the bribe or the improper benefit to be conferred exceeded $2,000, increase the offense level by the corresponding number of levels from the table in §2F1.1.",

and inserting the following:

"(1) If the greater of the value of the bribe or the improper benefit to be conferred (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

Section 2B5.1(b) is amended by striking subdivision (1) as follows:

"(1) If the face value of the counterfeit items exceeded $2,000, increase by the corresponding number of levels from the table at §2F1.1 (Fraud and Deceit).",

and inserting the following:

"(1) If the face value of the counterfeit items (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

The Commentary to §2B5.1 captioned "Application Notes" is amended in Note 3 by striking "§2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

Section 2B5.3(b) is amended by striking subdivision (1) as follows:

"(1) If the infringement amount exceeded $2,000, increase by the number of levels from the table in §2F1.1 (Fraud and Deceit) corresponding to that amount.",

and inserting the following:

"(1) If the infringement amount (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

The Commentary to §2B5.3 captioned "Background" is amended in the first paragraph by striking "guidelines" and inserting "guideline".

Section 2B6.1(b) is amended by striking subdivision (1) as follows:

"(1) If the retail value of the motor vehicles or parts involved exceeded $2,000, increase the offense level by the corresponding number of levels from the table in §2F1.1 (Fraud and Deceit).",

and inserting the following:

"(1) If the retail value of the motor vehicles or parts (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

The Commentary to §2B6.1 captioned "Application Notes" is amended in Note 1 by striking "§2B1.1 (Larceny, Embezzlement, and Other Forms of Theft)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

The Commentary to §2B6.1 captioned "Application Notes" is amended in Note 2 by striking "‘corresponding" before "number" and inserting "term ‘increase by the"; and by striking "§2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount".

Section 2C1.1(b) is amended by striking subdivision (2)(A) as follows:

"(A) If the value of the payment, the benefit received or to be received in return for the payment, or the loss to the government from the offense, whichever is greatest, exceeded $2,000, increase by the corresponding number of levels from the table in §2F1.1 (Fraud and Deceit).",

and inserting the following:

"(A) If the value of the payment, the benefit received or to be received in return for the payment, or the loss to the government from the offense, whichever is greatest (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

The Commentary to §2C1.1 captioned "Application Notes" is amended in Note 2 by striking "‘Loss’ is discussed in the Commentary to §2B1.1 (Larceny, Embezzlement, and Other Forms of Theft) and includes both actual and intended loss" and inserting "‘Loss’, for purposes of subsection (b)(2)(A), shall be determined in accordance with Application Note 2 of the Commentary to §2B1.1 (Theft, Property Destruction, and Fraud)".

Section 2C1.2(b) is amended by striking subdivision (2)(A) as follows:

"(A) If the value of the gratuity exceeded $2,000, increase by the corresponding number of levels from the table in §2F1.1 (Fraud and Deceit).",

and inserting the following:

"(A) If the value of the gratuity (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

Section 2C1.6(b) is amended by striking subdivision (1) as follows:

"(1) If the value of the gratuity exceeded $2,000, increase by the corresponding number of levels from the table in §2F1.1 (Fraud and Deceit).",

and inserting the following:

"(1) If the value of the gratuity (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

Section 2C1.7(b) is amended by striking subdivision (1)(A) as follows:

"(A) If the loss to the government, or the value of anything obtained or to be obtained by a public official or others acting with a public official, whichever is greater, exceeded $2,000, increase by the corresponding number of levels from the table in §2F1.1 (Fraud and Deceit); or"

and inserting the following:

"(A) If the loss to the government, or the value of anything obtained or to be obtained by a public official or others acting with a public official, whichever is greater (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

The Commentary to §2C1.7 captioned "Application Notes" is amended by striking the text of Note 3 as follows:

"‘Loss’ is discussed in the Commentary to §2B1.1 (Larceny, Embezzlement, and Other Forms of Theft) and includes both actual and intended loss.",

and inserting the following:

"‘Loss’, for purposes of subsection (b)(1)(A), shall be determined in accordance with Application Note 2 of the Commentary to §2B1.1 (Theft, Property Destruction, and Fraud).".

Section 2E5.1(b) is amended by striking subdivision (2) as follows:

"(2) Increase by the number of levels from the table in §2F1.1 (Fraud and Deceit) corresponding to the value of the prohibited payment or the value of the improper benefit to the payer, whichever is greater.",

and inserting the following:

"(2) If the value of the prohibited payment or the value of the improper benefit to the payer, whichever is greater (A) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (B) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount.".

Section 2G2.2(b)(2)(A) is amended by striking "§2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

Section 2G3.1(b)(1)(A) is amended by striking "§2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

Section 2G3.2(b)(2) is amended by striking "at §2F1.1(b)(1)" and inserting "in §2B1.1 (Theft, Property Destruction, and Fraud)".

Section 2H3.3(a) is amended by striking the text of subdivision (2) as follows:

"if the conduct was theft of mail, apply §2B1.1 (Larceny, Embezzlement, and Other Forms of Theft);",

and inserting the following:

"if the conduct was theft or destruction of mail, apply §2B1.1 (Theft, Property Destruction, and Fraud).";

and by striking subdivision (3) as follows:

"(3) if the conduct was destruction of mail, apply §2B1.3 (Property Damage or Destruction).".

The Commentary to §2H3.3 captioned "Background" is amended by striking "§2B1.1 (Larceny, Embezzlement, and Other Forms of Theft) or §2B1.3 (Property Damage or Destruction)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

The Commentary to §2J1.1 captioned "Application Notes" is amended in Note 2 by striking "(Larceny, Embezzlement, and Other Forms of Theft)" and inserting "(Theft, Property Destruction, and Fraud)".

Section 2K1.4(a) subdivision (2) is amended by inserting "or" after "or a structure other than a dwelling;"; by striking the text of subdivision (3) as follows:

"2 plus the offense level from §2F1.1 (Fraud and Deceit) if the offense was committed in connection with a scheme to defraud; or",

and inserting the following:

"2 plus the offense level from §2B1.1 (Theft, Property Destruction, and Fraud).";

and by striking subdivision (4) as follows:

"(4) 2 plus the offense level from §2B1.3 (Property Damage or Destruction).".

Section 2K1.4(b)(2) is amended by striking "(4)" and inserting "(3)".

Section 2N2.1(b)(1) is amended by striking "§2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

The Commentary to §2N2.1 captioned "Statutory Provisions" is amended by inserting ", 6810, 7734" after "150gg".

The Commentary to §2N2.1 captioned "Application Notes" is amended in Note 2 by inserting "theft, property destruction, or" after "involved"; and by striking "theft, bribery, revealing trade secrets, or destruction of property" and inserting "bribery".

The Commentary to §2N2.1 captioned "Application Notes" is amended in Note 4 by striking "§2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

Section 2N3.1(b)(1) is amended by striking "§2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

The Commentary to §2N3.1 captioned "Background" is amended by striking "the guideline for fraud and deception, §2F1.1," and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

Section 2Q1.6(a)(2) is amended by striking "§2B1.3 (Property Damage or Destruction)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

Section 2Q2.1(b) is amended by striking subdivision (3)(A) as follows:

"(A) If the market value of the fish, wildlife, or plants exceeded $2,000, increase the offense level by the corresponding number of levels from the table in §2F1.1 (Fraud and Deceit); or",

and inserting the following:

"(A) If the market value of the fish, wildlife, or plants (i) exceeded $2,000 but did not exceed $5,000, increase by 1 level; or (ii) exceeded $5,000, increase by the number of levels from the table in §2B1.1 (Theft, Property Destruction, and Fraud) corresponding to that amount; or ".

Section 2S1.3(a) is amended by striking "§2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

Section 2T1.1(b)(2) is amended by striking "concealment" and inserting "means"; and by inserting after "levels." the following:

"If the resulting offense level is less than level 12, increase to level 12.".

Section 2T1.1(c)(1) is amended by adding at the end the following:

"(D) If the offense involved (i) conduct described in subdivisions (A), (B), or (C) of these Notes; and (ii) both individual and corporate tax returns, the tax loss is the aggregate tax loss from the offenses added together.".

Section 2T1.1(c)(2) is amended in the second paragraph by striking "Note" and inserting "Notes"; by inserting "(A)" before "If"; and by adding at the end the following:

"(B) If the offense involved (i) conduct described in subdivision (A) of these Notes; and (ii) both individual and corporate tax returns, the tax loss is the aggregate tax loss from the offenses added together.".

The Commentary to §2T1.1 captioned "Application Notes" is amended in Note 1 in the first paragraph by inserting ", except in willful evasion of payment cases under 26 U.S.C. § 7201 and willful failure to pay cases under 26 U.S.C. § 7203" after "penalties".

The Commentary to §2T1.1 captioned "Application Notes" is amended by striking the text of Note 4 as follows:

"For purposes of subsection (b)(2), ‘sophisticated concealment’ means especially complex or especially intricate offense conduct in which deliberate steps are taken to make the offense, or its extent, difficult to detect. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore bank accounts ordinarily indicates sophisticated concealment.",

and inserting the following:

"Sophisticated Means Enhancement.— For purposes of subsection (b)(2), ‘sophisticated means’ means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts ordinarily indicates sophisticated means.".

The Commentary to §2T1.1 captioned "Application Notes" is amended by striking the text of Note 7 as follows:

"If the offense involves both individual and corporate tax returns, the tax loss is the aggregate tax loss from the offenses taken together.",

and inserting the following:

"If the offense involved both individual and corporate tax returns, the tax loss is the aggregate tax loss from the individual tax offense and the corporate tax offense added together. Accordingly, in a case in which a defendant fails to report income derived from a corporation on both the defendant’s individual tax return and the defendant’s corporate tax return, the tax loss is the sum of (A) the unreported or diverted amount multiplied by (i) 28%; or (ii) the tax rate for the individual tax offense, if sufficient information is available to make a more accurate assessment of that tax rate; and (B) the unreported or diverted amount multiplied by (i) 34%; or (ii) the tax rate for the corporate tax offense, if sufficient information is available to make a more accurate assessment of that tax rate. For example, the defendant, the sole owner of a Subchapter C corporation, fraudulently understates the corporation’s income in the amount of $100,000 on the corporation’s tax return, diverts the funds to the defendant’s own use, and does not report these funds on the defendant’s individual tax return. For purposes of this example, assume the use of 34% with respect to the corporate tax loss and the use of 28% with respect to the individual tax loss. The tax loss attributable to the defendant’s corporate tax return is $34,000 ($100,000 multiplied by 34%). The tax loss attributable to the defendant’s individual tax return is $28,000 ($100,000 multiplied by 28%). The tax loss for the offenses are added together to equal $62,000 ($34,000 + $28,000).".

Section 2T1.4(b)(2) is amended by striking "concealment" and inserting "means"; and by inserting after "levels." the following:

"If the resulting offense level is less than level 12, increase to level 12.".

The Commentary to §2T1.4 captioned "Application Notes" is amended by striking the text of Note 3 as follows:

and inserting the following:

"Sophisticated Means.—For purposes of subsection (b)(2), ‘sophisticated means’ means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts ordinarily indicates sophisticated means.".

Section 2T1.6(b)(1) is amended by striking "(Larceny, Embezzlement, and Other Forms of Theft)" and inserting "(Theft, Property Destruction, and Fraud)".

Section 2T3.1(b)(1) is amended by striking "concealment" and inserting "means"; and by inserting after "levels." the following:

"If the resulting offense level is less than level 12, increase to level 12.".

The Commentary to §2T3.1 captioned "Application Notes" is amended by striking the text of Note 3 as follows:

"For purposes of subsection (b)(1), ‘ sophisticated concealment’ means especially complex or especially intricate offense conduct in which deliberate steps are taken to make the offense, or its extent, difficult to detect. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore bank accounts ordinarily indicates sophisticated concealment.",

and inserting the following:

"Sophisticated Means.—For purposes of subsection (b)(1), ‘sophisticated means’ means especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts ordinarily indicates sophisticated means.".

Section 2T4.1 is amended by striking the text as follows:

and inserting the following:

The Commentary to §3B1.3 captioned "Application Notes" is amended by adding after Note 3 the following:

"4. The following additional illustrations of an abuse of a position of trust pertain to theft or embezzlement from employee pension or welfare benefit plans or labor unions:

(A) If the offense involved theft or embezzlement from an employee pension or welfare benefit plan and the defendant was a fiduciary of the benefit plan, an adjustment under this section for abuse of a position of trust will apply. ‘Fiduciary of the benefit plan’ is defined in 29 U.S.C. § 1002(21)(A) to mean a person who exercises any discretionary authority or control in respect to the management of such plan or exercises authority or control in respect to management or disposition of its assets, or who renders investment advice for a fee or other direct or indirect compensation with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or who has any discretionary authority or responsibility in the administration of such plan.

(B) If the offense involved theft or embezzlement from a labor union and the defendant was a union officer or occupied a position of trust in the union (as set forth in 29 U.S.C. § 501(a)), an adjustment under this section for an abuse of a position of trust will apply.".

Section 3D1.2(d) is amended in the second paragraph by striking "2B1.3" and inserting "2B1.4"; and by striking "§§2F1.1, 2F1.2;".

The Commentary to §3D1.2 captioned "Application Notes" is amended in Note 6 in the third paragraph by striking ", and would include, for example, larceny, embezzlement, forgery, and fraud".

Section 3D1.3(b) is amended by striking "(e.g., theft and fraud)".

The Commentary to §3D1.3 captioned "Application Notes" is amended in Note 3 by striking "(e.g., theft and fraud)"; and by striking the last sentence as follows:

"In addition, the adjustment for ‘more than minimal planning’ frequently will apply to multiple count convictions for property offenses.".

The Commentary following §3D1.5 captioned "Illustrations of the Operation of the Multiple-Count Rules" is amended by striking Illustration 2 as follows:

"2. Defendant B was convicted on the following seven counts: (1) theft of a $2,000 check; (2) uttering the same $2,000 check; (3) possession of a stolen $1,200 check; (4) forgery of a $600 check; (5) possession of a stolen $1,000 check; (6) forgery of the same $1,000 check; (7) uttering the same $1,000 check. Counts 1, 3 and 5 involve offenses under Part B (Offenses Involving Property), while Counts 2, 4, 6 and 7 involve offenses under Part F (Offenses Involving Fraud and Deceit). For purposes of §3D1.2(d), fraud and theft are treated as offenses of the same kind, and therefore all counts are grouped into a single Group, for which the offense level depends on the aggregate harm. The total value of the checks is $4,800. The fraud guideline is applied, because it produces an offense level that is as high as or higher than the theft guideline. The base offense level is 6; 1 level is added because of the value of the property (§2F1.1(b)(1)); and 2 levels are added because the conduct involved repeated acts with some planning (§2F1.1(b)(2)(A)). The resulting offense level is 9.";

and by redesignating Illustrations 3 and 4 as Illustrations 2 and 3, respectively.

The Commentary following §3D1.5 captioned "Illustrations of the Operation of the Multiple-Count Rules" is amended in Illustration 3, as redesignated by this amendment, by striking "§2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)"; by striking "14" each place it appears and inserting "16"; and by striking "§2B4.1 or §2F1.1" and inserting "§2B1.1 (assuming the application of the ‘sophisticated means’ enhancement in §2B1.1(b)(8)) or §2B4.1".

The Commentary to §8A1.2 captioned "Application Notes" is amended in Note 3(i) by striking "§§2B1.1 (Larceny, Embezzlement, and Other Forms of Theft), 2F1.1 (Fraud and Deceit)" and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

Section 8C2.1(a) is amended by striking "2B1.3" and inserting "2B1.4"; and by striking "§§2F1.1, 2F1.2;".

The Commentary to §8C2.1 captioned "Application Notes" is amended in Note 2 by striking "§2F1.1 (Fraud and Deceit)" each place it appears and inserting "§2B1.1 (Theft, Property Destruction, and Fraud)".

Appendix A (Statutory Index) is amended in the line referenced to 7 U.S.C. § 6 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 6b(A) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 6b(B) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 6b(C) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 6c by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 6h by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 6o by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 13(a)(2) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 13(a)(3) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 13(a)(4) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 13(d) by striking "2F1.2" and inserting "2B1.4";

in the line referenced to 7 U.S.C. § 13(f) by striking "2F1.2" and inserting "2B1.4";

in the line referenced to 7 U.S.C. § 23 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 270 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 2024(b) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 7 U.S.C. § 2024(c) by striking "2F1.1" and inserting "2B1.1";

by inserting after the line referenced to 7 U.S.C. § 6810 the following new line:

"7 U.S.C. § 7734 2N2.1";

in the line referenced to 12 U.S.C. § 631 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 50 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 77e by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 77q by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 77x by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 78j by striking "2F1.1" and inserting "2B1.1"; and by striking "2F1.2" and inserting "2B1.4";

in the line referenced to 15 U.S.C. § 78ff by striking "2B4.1, 2F1.1" and inserting "2B1.1, 2B4.1";

in the line referenced to 15 U.S.C. § 80b-6 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 158 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 645(a) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 645(b) by striking ", 2F1.1";

in the line referenced to 15 U.S.C. § 645(c) by striking ", 2F1.1";

in the line referenced to 15 U.S.C. § 714m(a) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 714m(b) by striking ", 2F1.1";

in the line referenced to 15 U.S.C. § 1281 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 1644 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 1681q by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 15 U.S.C. § 1693n(a) by striking "2F1.1" and inserting "2B1.1";

by inserting after the line referenced to 15 U.S.C. § 2615 the following new line:

"15 U.S.C. § 6821 2B1.1";

in the line referenced to 16 U.S.C. § 114 by striking ", 2B1.3";

in the line referenced to 16 U.S.C. § 117c by striking ", 2B1.3";

in the line referenced to 16 U.S.C. § 123 by striking "2B1.3,";

in the line referenced to 16 U.S.C. § 146 by striking "2B1.3,";

in the line referenced to 16 U.S.C. § 413 by striking ", 2B1.3";

in the line referenced to 16 U.S.C. § 433 by striking ", 2B1.3";

in the line referenced to 16 U.S.C. § 831t(b) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 16 U.S.C. § 831t(c) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 32(a),(b) by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 33 by striking "2B1.3"and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 37 by striking "2B1.3" and inserting "2B1.1";

by inserting after the line referenced to 18 U.S.C. § 37 the following new line:

"18 U.S.C. § 38 2B1.1";

in the line referenced to 18 U.S.C. § 43 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 112(a) by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 152 by striking "2B4.1, 2F1.1" and inserting "2B1.1, 2B4.1";

in the line referenced to 18 U.S.C. § 153 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 155 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 225 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 285 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 286 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 287 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 288 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 289 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 332 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 335 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 470 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 471 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 472 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 473 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 474 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 474A by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 476 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 477 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 478 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 479 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 480 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 481 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 482 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 483 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 484 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 485 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 486 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 488 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 491 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 493 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 494 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 495 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 496 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 497 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 498 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 499 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 500 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 501 by inserting "2B1.1," before "2B5.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 502 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 503 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 505 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 506 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 507 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 508 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 509 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 510 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 513 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 514 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 642 by inserting "2B1.1," before "2B5.1" and striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 656 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 657 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 659 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 663 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 665(a) by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 666(a)(1)(A) by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 709 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 712 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 911 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 914 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 915 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 917 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 970(a) by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1001 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1002 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1003 by inserting "2B1.1," before "2B5.1" and striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 1004 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1005 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1006 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1007 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1010 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1011 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1012 by inserting "2B1.1," before "2C1.3"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 1013 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1014 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1015 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1016 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1017 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1018 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1019 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1020 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1021 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1022 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1023 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 1025 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1026 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1028 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1029 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1030(a)(4) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1030(a)(5) by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1030(a)(6) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1031 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1032 by inserting "2B1.1," before "2B4.1"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 1033 by striking "2F1.1,";

in the line referenced to 18 U.S.C. § 1035 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1341 by inserting "2B1.1," before "2C1.7"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 1342 by inserting "2B1.1," before "2C1.7"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 1343 by inserting "2B1.1," before "2C1.7"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 1344 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1347 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1361 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1362 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1363 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1366 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1422 by inserting "2B1.1," before "2C1.2"; and by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 1702 by striking "2B1.3,";

in the line referenced to 18 U.S.C. § 1703 by striking "2B1.3,";

in the line referenced to 18 U.S.C. § 1704 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 1705 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1706 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1708 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 1712 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1716C by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1720 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1728 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1852 by striking ", 2B1.3";

in the line referenced to 18 U.S.C. § 1853 by striking ", 2B1.3";

in the line referenced to 18 U.S.C. § 1854 by striking ", 2B1.3";

in the line referenced to 18 U.S.C. § 1857 by striking "2B1.3," and inserting "2B1.1,";

in the line referenced to 18 U.S.C. § 1861 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1902 by striking "2F1.2" and inserting "2B1.4";

in the line referenced to 18 U.S.C. § 1919 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1920 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1923 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 1992 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 2071 by striking ", 2B1.3";

in the line referenced to 18 U.S.C. § 2072 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 2073 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 2197 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 2272 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 2275 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 2276 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 2280 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 2281 by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 18 U.S.C. § 2314 by striking ", 2F1.1";

in the line referenced to 18 U.S.C. § 2315 by striking ", 2F1.1";

in the line referenced to 19 U.S.C. § 1434 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 19 U.S.C. § 1435 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 19 U.S.C. § 1436 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 19 U.S.C. § 1919 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 19 U.S.C. § 2316 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 20 U.S.C. § 1097(a) by striking ", 2F1.1";

in the line referenced to 20 U.S.C. § 1097(b) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 20 U.S.C. § 1097(d) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 21 U.S.C. § 333(a)(2) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 22 U.S.C. § 1980(g) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 22 U.S.C. § 2197(n) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 22 U.S.C. § 4221 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 25 U.S.C. § 450d by striking ", 2F1.1";

in the line referenced to 26 U.S.C. § 7208 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 26 U.S.C. § 7214 by inserting "2B1.1," before "2C1.1"; and by striking ", 2F1.1";

in the line referenced to 26 U.S.C. § 7232 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 29 U.S.C. § 1141 by inserting "2B1.1," before "2B3.2"; and by striking ", 2F1.1";

in the line referenced to 38 U.S.C. § 787 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 38 U.S.C. § 3502 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 41 U.S.C. § 423(e) by inserting "2B1.1," before "2C1.1"; and by striking ", 2F1.1";

in the line referenced to 42 U.S.C. § 408 by striking "2F1.1" and inserting "2B1.1";

by inserting after the line referenced to 42 U.S.C. § 408 the following new line:

"42 U.S.C. § 1011 2B1.1";

in the line referenced to 42 U.S.C. § 1307(a) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 1307(b) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 1307a-7b by striking ", 2F1.1";

in the line referenced to 42 U.S.C. § 1383(d)(2) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 1383a(a) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 1383a(b) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 1395nn(a) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 1395nn(c) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 1396h(a) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 1713 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 1760(g) by striking ", 2F1.1";

in the line referenced to 42 U.S.C. § 1761(o)(1) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 1761(o)(2) by striking ", 2F1.1";

in the line referenced to 42 U.S.C. § 3220(a) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 3220(b) by striking ", 2F1.1";

in the line referenced to 42 U.S.C. § 3426 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 3791 by striking ", 2F1.1";

in the line referenced to 42 U.S.C. § 3792 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 42 U.S.C. § 3795 by striking ", 2F1.1";

in the line referenced to 42 U.S.C. § 5157(a) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 45 U.S.C. § 359(a) by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 46 U.S.C. § 1276 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 49 U.S.C. § 121 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 49 U.S.C. § 11903 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 49 U.S.C. § 11904 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 49 U.S.C. § 14912 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 49 U.S.C. § 16102 by striking "2F1.1" and inserting "2B1.1";

by inserting after the line referenced to 49 U.S.C. § 16104 the following new line:

"49 U.S.C. § 30170 2B1.1";

by inserting after the line referenced to 49 U.S.C. § 46312 the following new line:

"49 U.S.C. § 46317(a) 2B1.1";

in the line referenced to 49 U.S.C. § 60123(d) by striking "2B1.3" and inserting "2B1.1";

in the line referenced to 49 U.S.C. § 80116 by striking "2F1.1" and inserting "2B1.1";

in the line referenced to 49 U.S.C. § 80501 by striking "2B1.3" and inserting "2B1.1"; and

in the line referenced to 49 U.S.C. App. § 1687(g) by striking "2B1.3" and inserting "2B1.1".

Reason for Amendment: This "Economic Crime Package" is a six-part amendment that is the result of Commission study of economic crime issues over a number of years. The major parts of the amendment are: (1) consolidation of the theft, property destruction, and fraud guidelines; (2) a revised, common loss table for the consolidated guideline, and a similar table for tax offenses; (3) a revised, common definition of loss for the consolidated guideline; (4) revisions to guidelines that refer to the loss table in the consolidated guideline; (5) technical and conforming amendments; and (6) amendments regarding tax loss.

Consolidation of Theft, Property Destruction, and Fraud; Miscellaneous Revisions

The first part of this amendment consolidates the guidelines for theft, §2B1.1 (Larceny, Embezzlement, and Other Forms of Theft; Receiving, Transporting, Transferring, Transmitting, or Possessing Stolen Property), property destruction, §2B1.3 (Property Damage or Destruction), and fraud, §2F1.1 (Fraud and Deceit; Forgery; Offenses Involving Altered or Counterfeit Instruments Other than Counterfeit Bearer Obligations of the United States) into one guideline, §2B1.1 (Theft, Property Destruction, and Fraud). Consolidation will provide similar treatment for similar offenses for which pecuniary harm is a major factor in determining the offense level and, therefore, decrease unwarranted sentencing disparity that may be caused by undue complexity in the guidelines. Consolidation addresses concerns raised over several years by probation officers, judges, and practitioners about the difficulties of determining for particular cases, whether to apply §2B1.1 or §2F1.1 and the disparate sentencing outcomes that can result depending on that decision. Commentators have noted that inasmuch as theft and fraud offenses are conceptually similar, there is no strong reason to sentence them differently.

The base offense level for the consolidated guideline is level 6. This maintains the base offense level for fraud offenses, but represents a two-level increase for theft and property destruction offenses, which prior to this amendment was level 4. The increase of two levels in the base offense levels for theft and property destruction offenses will have minimal impact for low-level theft offenses involving offenders in criminal history Category I or Category II. Commission analysis indicates that only a few defendants will move from Zone A (where probation without conditions of confinement is possible) to Zone B or Zone C, and those that are moved into a zone at higher offense levels in the Sentencing Table generally will have criminal history categories above Category I. As a result, the Commission decided against promulgating a two-level reduction for offenses involving loss amounts less than $2,000.

The amendment deletes the two-level enhancement for more than minimal planning previously at §§2B1.1(b)(4)(A) and 2F1.1(b)(2)(A). The two-fold reason for this change was to obviate the need for judicial fact-finding about this frequently occurring enhancement and to avoid the potential overlap between the more than minimal planning enhancement and the sophisticated means enhancement previously at §2F1.1(b)(6) and now, by this amendment, at §2B1.1(b)(8).

The amendment also eliminates the alternative prong of the more than minimal planning enhancement, at §2F1.1(b)(2)(B) prior to this amendment, which provided a two-level increase if the offense involved more than one victim. The amendment replaces this enhancement with a specific offense characteristic for offenses that involved large numbers of victims. This change addresses three concerns. First, as a result of the consolidation, the more-than-one-victim enhancement, if retained, would apply in cases that, prior to this amendment, were not subject to such an enhancement. Second, a two-level increase in every case involving more than one victim is arguably inconsistent with the approach in subsection (b)(2) of §3A1.1 (Hate Crime Motivation or Vulnerable Victim), which provides a two-level increase if the offense involved a large number of vulnerable victims. Third, in practice, the more than minimal planning enhancement was so closely linked with this enhancement that the decision to eliminate the former argues strongly for also eliminating the latter.

The amendment provides a two-level enhancement for offenses involving ten or more, but fewer than 50, victims, and a four-level increase for offenses involving 50 or more victims. This provision is designed to provide a measured increment that results in increased punishment for offenses involving larger numbers of victims. Its applicability to those cases in which victims, both individuals and organizations, sustain an actual loss under subsection (b)(1) or sustain bodily injury.

A special rule is provided for application of the victim enhancement for offenses involving United States mail because of (i) the unique proof problems often attendant to such offenses, (ii) the frequently significant, but difficult to quantify, non-monetary losses in such offenses, and (iii) the importance of maintaining the integrity of the United States mail.

In addition, the amendment moves the mass-marketing enhancement into the new victim-related specific offense characteristic, as an alternative to the two-level adjustment for more than ten, but fewer than 50, victims. The provision is retained to remain responsive to the congressional directive that led to its original promulgation and reflects the Commission’s expectation that most telemarketing cases, or similar mass-marketing cases, will have at least ten victims and, receive this enhancement. The mass-marketing alternative enhancement also will continue to apply in cases in which mass-marketing has been used to target a large number of persons, regardless of the number of persons who have sustained an actual loss or injury.

In addition, the amendment provides that if a victim enhancement applies, the enhancement under §3A1.1(b)(2) for "a large number of vulnerable victims" does not also apply because the more serious conduct already would have resulted in a higher penalty level.

In response to issues raised in a circuit conflict, the amendment revises the commentary related to subsection (b)(4)(B) of §2B1.1 to clarify the meaning of "person in the business of receiving and selling stolen property." The amendment addresses an issue that has arisen in case law regarding what conduct receives a defendant for the 4-level enhancement.

In determining the meaning of "in the business of", some circuits apply what has been termed the "fence test", under which the court must consider (1) if the stolen property was bought and sold, and (2) to what extent the stolen property transactions encouraged others to commit property crimes. Other circuits have adopted the "totality of the circumstances test" that focuses on the regularity and sophistication of the defendant's operation. Compare United States v. Esquivel, 919 F.2d 957 (5th Cir. 1990), with United States v. St. Cyr, 997 F.2d 698 (1st Cir. 1992). Under either test, courts consider the sophistication and regularity of the business as well as the control, volume, turnover, relationship with thieves, and connections with buyers. Although the factors considered by all of these circuits are similar, the approaches are different.

After consideration, the Commission adopted the totality of circumstances approach because it is more objective and more properly targets the conduct of the individual who is actually in the business of fencing. See United States v. St. Cyr, supra.

In addition, this amendment resolves a circuit conflict regarding the scope of the enhancement in the consolidated guideline for a misrepresentation that the defendant was acting on behalf of a charitable, educational, religious, or political organization, or a government agency. (Prior to this amendment, the enhancement was at subsection (b)(4)(A) of §2F1.1). The conflict concerns whether the misrepresentation enhancement applies only in cases in which the defendant does not have any authority to act on behalf of the covered organization or government agency or if it applies more broadly to cases in which the defendant has a legitimate connection to the covered organization or government agency, but misrepresents that the defendant is acting solely on behalf of that organization or agency. Compare, e.g., United States v. Marcum, 16 F.3d 599 (4th Cir. 1994) (enhancement appropriate even though defendant did not misrepresent his authority to act on behalf of the organization but rather only misrepresented that he was conducting an activity wholly on behalf of the organization), with United States v. Frazier, 53 F.3d 1105 (10th Cir. 1995) (application of the enhancement is limited to cases in which the defendant exploits the victim by claiming to have authority which in fact does not exist).

The amendment follows the broader view of the Fourth Circuit. It provides for application of the enhancement, now, by this amendment, at §2B1.1(b)(7)(A), if the defendant falsely represented that the defendant was acting to obtain a benefit for a covered organization or agency when, in fact, the defendant intended to divert all or part of that benefit (for example, for the defendant’s personal gain), regardless of whether the defendant actually was associated with the organization or government agency. The Commission determined that the enhancement was appropriate in such cases because the representation that the defendant was acting to obtain a benefit for the organization enables the defendant to commit the offense. In the case of an employee who also holds a position of trust, the amendment provides an application note instructing the court not to apply §3B1.3 (Abuse of Position of Trust or Use of Special Skill) if the same conduct forms the basis both for the enhancement and the adjustment in §3B1.3.

The amendment implements the directive in section 3 of the College Scholarship Fraud Prevention Act of 2000, Public Law 106–420, by providing an additional alternative enhancement that applies if the offense involves a misrepresentation to a consumer in connection with obtaining, providing, or furnishing financial assistance for an institution of higher education. The enhancement targets the provider of the financial assistance or scholarship services, not the individual applicant for such assistance or scholarship, consistent with the intent of the legislation.

This amendment makes two minor substantive changes to the enhancement for conscious or reckless risk of serious bodily injury, now, by this amendment, at subsection (b)(11)(A). First, it increases the minimum offense level from level 13 to level 14 to promote proportionality within this guideline. For example, within the theft and fraud guidelines prior to this amendment, there were other specific offense characteristics that had a higher floor offense level than the risk of bodily injury enhancement: (1) "chop shops" (level 14); (2) jeopardizing the solvency of a financial institution (level 24); and (3) personally receiving more than $1,000,000 from a financial institution (level 24). Second, it inserts "death" before the term "or serious bodily injury" to clarify that the risk of the greater harm also is covered. Including risk of death also provides consistency with similar provisions in other parts of the Guidelines Manual, where risk of death is always included with risk of serious bodily injury.

The amendment modifies the four-level increase and minimum offense level of level 24 for a defendant who personally derives more than $1,000,000 in gross receipts from an offense that affected a financial institution, now, by this amendment, at subsection (b)(12)(A). The amendment retains the minimum offense level but reduces the four-level enhancement to two levels because of the increased offense levels that will result from the loss table for the consolidated guideline. The two-level increase was retained because elimination of the enhancement entirely would not provide an appropriate punishment for those offenders involved with losses that are in the $1,000,000 to $2,500,000 range of loss.

The enhancement also was modified to address issues about what it means to "affect" a financial institution and how to apply the enhancement to a case in which there are more than one financial institution involved. Accordingly, the revised provision focuses on whether the defendant derived more than $1,000,000 in gross receipts from one or more financial institutions as a result of the offense.

The amendment includes a new cross reference (subsection (c)(3)) that is more generally applicable and intended to apply whenever a broadly applicable fraud statute is used to reach conduct that is addressed more specifically in another Chapter Two guideline. Prior to this amendment, the fraud guideline contained an application note that instructed the user to move to another, more appropriate Chapter Two guideline, under specified circumstances. Although this note was not a cross reference, but rather a reminder of the principles enunciated in §1B1.2, it operated like a cross reference in the sense that it required use of a different guideline.

This amendment also makes a minor revision (adding "in a broader form") to the background commentary regarding the implementation of the directive in section 2507 of Public Law 101–647, nullifying the effect of United States v. Tomasino, 206 F. 3d 739 (7th Cir. 2000).

Loss Tables

The amendment provides revised loss tables for this consolidated guideline and for the tax offense guidelines. A principle feature of the new tables is that they expand the previously existing one-level increments into two-level increments, thus increasing the range of losses that correspond to an individual increment, compressing the table, and reducing fact-finding. The new loss tables also provide substantial increases in penalties for moderate and higher loss amounts, even, for fraud and theft offenses, notwithstanding the elimination of the two-level enhancement for more than minimal planning. These higher penalty levels respond to comments received from the Department of Justice, the Criminal Law Committee of the Judicial Conference, and others, that the offenses sentenced under the guidelines consolidated by this amendment under-punish individuals involved with moderate and high loss amounts, relative to penalty levels for offenses of similar seriousness sentenced under other guidelines.

Some offenders accountable for relatively low dollar losses will receive slightly lower offense levels under the new loss table for the consolidated guideline because of (1) the elimination of the enhancement for more than minimal planning; (2) the change from one-level to two-level increments for increasing loss amounts; (3) the selection of the breakpoints for the loss increments (including $5,000 as the first loss amount that results in an increase); and (4) the slope chosen for the relationship between increases in loss amount and increases in offense level at the lower loss amounts. This amendment reflects a decision by the Commission that this effect on penalty levels at lower loss amounts is appropriate for several reasons: (1) the lower offense levels provide appropriate deterrence and punishment, generally, (2) at lower offense levels more defendants will be subject to the court’s ability to fashion sentencing alternatives as appropriate (see, e.g., §5C1.1 (Imposition of a Term of Imprisonment)); and (3) these penalty levels may facilitate the payment of restitution.

The loss table for the consolidated guideline provides the first of incremental increases for cases in which loss exceeds $5,000, rather than $2,000 provided previously in §2F1.1, or $100 provided previously in §2B1.1. The Commission believes this will reduce the fact-finding burden on courts for less serious offenses that are generally subject to greater sentencing flexibility because of the availability of alternatives to incarceration.

The amendment also provides a revised loss table in §2T4.1 (Tax Table) for tax offenses that ensures significantly higher penalty levels for offenses involving moderate and high tax loss in a similar manner and degree as the loss table for the consolidated guideline. The new table is designed to reflect more appropriately the seriousness of tax offenses and to maintain proportionality with the offenses sentenced under the consolidated guideline.

The tax loss table is similar to the loss table for the consolidated guideline, except it does not reduce generally any sentences for offenders involved with lower loss amounts. The tax table provides its first increment for loss at $2,000, rather than the $5,000 threshold under the consolidated guideline (and the $1,700 threshold under the tax loss table prior to this amendment). These differences are intended to avoid unintended decreases that would occur otherwise. The increases in the new tax loss table for offenders involved with lower loss amounts are intended to maintain the long-standing treatment of tax offenses relative to theft and fraud offenses.

Definition of Loss

This amendment provides a new definition of loss applicable to offenses previously sentenced under §§2B1.1, 2B1.3, and 2F1.1. The revised definition makes clarifying and substantive revisions to the definitions of loss previously in the commentary to §§2B1.1 and 2F1.1, resolves a number of circuit conflicts, addresses a variety of application issues, and promotes consistency in application.

Significantly, the new definition of loss retains the core rule that loss is the greater of actual and intended loss. The Commission concluded that, for cases in which intended loss is greater than actual loss, the intended loss is a more appropriate initial measure of the culpability of the offender. Conversely, in cases which the actual loss is greater, that amount is a more appropriate measure of the seriousness of the offense.

A definition is provided for intended loss that is consistent with the rule regarding the interaction of actual and intended loss.

The amendment includes a resolution of the circuit conflict relating to the meaning and application of intended loss.

The amendment resolves the conflict to provide that intended loss includes unlikely or impossible losses that are intended, because their inclusion better reflects the culpability of the offender. Compare United States v. Geevers, 226 F.3d 186 (3d Cir. 2000) (agreeing with the majority of circuits holding that impossibility is not in and of itself a limit on the intended loss for purposes of calculating sentences under the guidelines . . . impossibility does not require a sentencing court to lower its calculations of intended loss); and United States v. Coffman, 94 F.3d 330 (7th Cir. 1996) (rejecting the argument that a loss that cannot possibly occur cannot be intended); United States v. Koenig, 952 F.2d 267 (9th Cir. 1991) (holding that §2F1.1 only requires a calculation of intended loss and does not require a finding that the intentions were realistic); United States v. Klisser, 190 F. 3d 34, 36 (2d Cir. 1999) (same); United States v. Blitz, 151 F. 3d 1002, 1010 (9^th Cir. 1998) (same); United States v. Studevent, 116 F. 3d 1559, 1563 (D.C. Cir. 1997) (same); United States v. Wai-Keung, 115 F. 3d 874, 877 (11^th Cir. 1997) (same), with United States v. Galbraith, 20 F. 3d 1054, 1059 (10^th Cir. 1993) (because intended loss only includes losses that are possible, in an undercover sting operation the intended loss is zero); and United States v. Watkins, 994 F.2d 1192, 1196 (6th Cir. 1993) (holding that a limitation on the broad reach of the intended loss rule is that the intended loss must have been possible to be considered relevant).

Accordingly, concepts such as "economic reality" or "amounts put at risk" will no longer be considerations in the determination of intended loss. See United States v. Bonanno, 146 F.3d 502 (7th Cir. 1998) (holding that the relevant inquiry is how much the scheme put at risk); and United States v. Wells, 127 F. 3d 739 (8th Cir. 1997) (citing United States v. Morris, 18 F.3d 562 (8th Cir. 1994)) (holding that intended loss properly was measured by the possible loss the defendant intended, and did not hinge on actual or net loss).

This amendment also resolves differing circuit interpretations of the standard of causation applicable for actual loss, an issue that was not addressed expressly in the prior definition of actual loss. Various circuits recognized three arguably inconsistent standards for loss causation. First, §1B1.3 (Relevant Conduct) provides that a defendant is responsible for all losses – foreseen or unforeseen – that result from the defendant’s actions or that result from the foreseeable actions of co-participants. See United States v. Sarno, 73 F.3d 1470 (9th Cir. 1995) (holding that "[a] sentence calculated pursuant to the loss tables . . . is properly based on actual loss notwithstanding the fact that this loss may be greater than the intended, expected or foreseeable loss"), cert. denied, 518 U.S. 1020 (1996); and United States v. Lopreato, 83 F.3d 571 (2d Cir. 1996) (holding that in a bribery case, the defendant is responsible for all losses, foreseeable or not). A second view is premised on the fact that prior to this amendment commentary in §2F1.1 limited the loss amount to the value of the money, property, or services unlawfully taken. See United States v. Marlatt, 24 F.3d 1005 (7th Cir. 1994) (refusing to count foreseeable losses in loss figure because they did not represent the actual thing taken). A third view is that the commentary’s explicit inclusion of consequential damages in the loss determination for contract procurement and product substitution cases implies that only non-consequential or direct damages are included in other cases. See United States v. Thomas, 62 F.3d 1332 (11th Cir. 1995), cert. denied, 516 U.S. 1166 (1996) (only non-consequential or direct damages are included in loss). See also United States v. Daddona, 34 F.3d 163 (3d Cir.), cert. denied, 513 U.S. 1002 (1994) (holding that merely incidental or consequential damages may not be counted in computing loss); and United States v. Newman, 6 F.3d 623 (9th Cir. 1993) (holding that loss caused by the defendant arsonist was only the value of the property destroyed by the fire, not costs of putting out the fire).

The amendment defines "actual loss" as the "reasonably foreseeable pecuniary harm" that resulted from the offense. The amendment incorporates this causation standard that, at a minimum, requires factual causation (often called "but for" causation) and provides a rule for legal causation (i.e., guidance to courts regarding how to draw the line as to what losses should be included and excluded from the loss determination). Significantly, the application of this causation standard in the great variety of factual contexts in which it is expected to occur appropriately is entrusted to sentencing judges.

"Pecuniary harm" is defined in a manner that excludes emotional distress, harm to reputation, and other non-economic harm, in order to foreclose the laborious effort sometimes necessary to quantify non-economic harms (as in some tort proceedings, for example).

"Reasonably foreseeable pecuniary harm" is defined to include pecuniary harms that the defendant knew or, under the circumstances, reasonably should have known, was a potential result of the offense. The Commission determined that this standard better ensures the inclusion in loss of those harms that reflect the seriousness of the offense and the culpability of the offender.

The definition deletes the previous rule that, by negative implication, excludes consequential damages (except in specified cases), thus resolving a circuit conflict. Compare United States v. Izydore, 167 F.3d 213 (5th Cir. 1999) (the fact that the Commission prescribed consequential losses in only specific fraud cases, and not others, is strong evidence that consequential damages were omitted from the general loss definition by design rather than mistake), with United States v. Gottfried, 58 F.3d 648 (D.C. Cir. 1995) (holding that merely incidental or consequential damages may not be counted in computing loss). The Commission decided, however, not to use the term "consequential damages," or any similar civil law distinction between direct and indirect harms. Rather, the Commission determined that the reasonable foreseeability standard provides sufficient guidance to courts as to what type of harms are included in loss.

In addition, this amendment preserves the special provisions addressing loss in protected computer offenses and the inclusion of consequential damages in product substitution and contract procurement offenses; however, these special cases are re-characterized as rules of construction to avoid any negative implications regarding other types of offenses.

The amendment reflects a decision by the Commission that interest and similar costs shall be excluded from loss. However, the amendment provides that a departure may be warranted in the rare case in which exclusion of interest will under-punish the offender. Thus, the rule resolves the circuit split regarding whether "bargained for" interest may be included in loss. Compare United States v. Henderson, 19 F.3d 917 (5th Cir.), cert. denied, 513 U.S. 877 (1994) (holding that interest should be included if the victim had a reasonable expectation of receiving interest from the transaction); United States v. Gilberg, 75 F.3d 15 (1st Cir. 1996) (including in loss interest on fraudulently procured mortgage loan); and United States v. Sharma, 190 F.3d 220 (3d Cir. 1999) (holding that Application Note 8 of §2F1.1 requires the exclusion of "opportunity cost" interest, but did not intend to exclude bargained-for interest), with United States v. Hoyle, 33 F.3d 415 (4th Cir. 1994), cert. denied, 513 U.S. 1133 (1995) (excluding interest from the determination of loss for sentencing purposes); and United States v. Guthrie, 144 F.3d 1006 (6th Cir. 1998) (holding that when the defendant concealed assets in a bankruptcy proceeding, the lower court’s determination that loss to creditors included interest was erroneous). This rule is consistent with the general purpose of the loss determination to serve as a rough measurement of the seriousness of the offense and culpability of the offender and avoids unnecessary litigation regarding the amount of interest to be included.

The loss definition also excludes from loss certain costs incurred by the government and victims in connection with criminal investigation and prosecution of the offense. Such losses are likely to occur in a broad range of cases, would present a fact-finding burden in those cases, and would not contribute to the ability of loss to perform its essential function.

The loss definition also provides for the exclusion from loss of certain economic benefits transferred to victims, to be measured at the time of detection. This provision codifies the "net loss" approach that has developed in the case law, with some modifications made for policy reasons. This crediting approach is adopted because the seriousness of the offense and the culpability of a defendant is better determined by using a net approach. This approach recognizes that the offender who transfers something of value to the victim(s) generally is committing a less serious offense than an offender who does not.

The amendment adopts "time of detection" as the most appropriate and least burdensome time for measuring the value of the transferred benefits. The Commission determined that valuing such benefits at the time of transfer would be especially problematic in cases in which the offender misrepresented the value of an item that is difficult to value. Although the time of detection standard will allow some fluctuation in value which may inure to the defendant’s benefit or detriment, the Commission determined that, because the time of detection is closer in time to the sentencing and occurs at a point when the authorities are aware of the criminality, its use generally would make it easier to determine a more accurate value of the benefit.

The definition of "time of detection" was adopted because there may be situations in which it is difficult to prove that the defendant knew the offense was detected even if it was already discovered. In addition, the words "about to be detected" are included to cover those situations in which the offense is not yet detected, but the defendant knows it is about to be detected. In such a case, it would be inappropriate to credit the defendant with benefits transferred to the victim after that defendant’s awareness.

The definition of "loss" also provides special rules for certain schemes. One rule includes in loss (and excludes from crediting) the benefits received by victims of persons fraudulently providing professional services. This rule reverses case law that has allowed crediting (or exclusion from loss) in cases in which services were provided by persons posing as attorneys and medical personnel. See United States v. Maurello, 76 F.3d 1304 (3d Cir. 1996) (calculating loss by subtracting the value of satisfactory legal services from amount of fees paid to a person posing as a lawyer); and United States v. Reddeck, 22 F.3d 1504 (10th Cir. 1994) (reducing loss by the value of education received from a sham university). The Commission determined that the seriousness of these offenses and the culpability of these offenders is best reflected by a loss determination that does not credit the value of the unlicensed benefits provided. In addition, this provision eliminates the additional burden that would be imposed on courts if required to determine the value of these benefits.

Similarly, the definition of loss provides a special rule that includes in loss (and excludes from crediting) the value of items that were falsely represented as approved by a regulatory agency, for which regulatory approval was obtained by fraud, or for which regulatory approval was required but not obtained. The Commission determined that the seriousness of these offenses and the culpability of these offenders is best reflected by a loss determination that does not credit the value of these items. This decision reflects the importance of the regulatory approval process to public health, safety, and confidence.

Regarding investment schemes, the amendment resolves a circuit conflict regarding whether and how to credit payments made to victims. Compare United States v. Mucciante, 21 F.3d 1228 (2nd Cir. 1994) (under the Guidelines, loss includes the value of all property taken, even though all or part of it was returned.); United States v. Deavours, 219 F.3d 400 (5th Cir. 2000) (intended loss is not reduced by any sums returned to investors); and United States v. Loayza, 107 F.3d 257 (4th Cir.1997) (declining to follow the approach of net loss and holding defendants responsible for the value of all property taken, even though all or a part is returned), with United States v. Holiusa, 13 F.3d 1043 (7th Cir.1994) (holding that only the net loss should be included in loss, thus allowing a credit for returned interest), and United States v. Orton, 73 F.3d 331 (11th Cir. 1996) (only payments made to losing investors should be credited, not payments to investors who made a profit).

This amendment adopts the approach of the Eleventh Circuit that excludes the gain to any individual investor in the scheme from being used to offset the loss to other individual investors because any gain realized by an individual investor is designed to lure others into the fraudulent scheme. See United States v. Orton, supra.

The definition retains the rule providing for the use of gain when loss cannot reasonably be determined. It clarifies that there must be a loss for gain to be considered. In doing so, the Commission resolved another circuit conflict. Compare United States v. Robie, 166 F.3d 444 (2d Cir. 1999) (holding that use of defendant’s gain for purposes of subsection (b)(1) is improper if there is no economic loss to the victim), with United States v. Haas, 171 F.3d 259 (5th Cir. 1999) (stating that "if the loss is either incalculable or zero, the district court must determine the §2F1.1 sentence enhancement by estimating the gain to the defendant as a result of his fraud"). The Commission decided not to expand the use of gain to situations in which loss can be determined but the gain is greater than the loss because such instances should occur infrequently, the efficiency of the criminal operation as reflected in the amount of gain ordinarily should not determine the penalty level, and the traditional use of loss is generally adequate.

The amendment revises the special rule on determining loss in cases involving diversion of government program benefits to resolve another circuit conflict. The revision is intended to clarify that loss in such cases only includes amounts that were diverted from intended recipients or uses, not benefits received or used by authorized persons. In other words, even if such benefits flowed through an unauthorized intermediary, as long as they went to intended recipients for intended uses, the amount of those benefits should not be included in loss. Compare United States v. Henry, 164 F.3d 1304 (10th Cir. 1999) (holding that loss includes the value of gross benefits paid, rather than the value of benefits improperly received or diverted in determining the loss), with United States v. Peters, 59 F.3d 732 (8th Cir. 1995) (determining that loss is the value of benefits diverted from intended recipients); and United States v. Barnes, 117 F.3d 328 (7th Cir. 1997) (holding that the sentence is calculated only on the value of the government benefits diverted from intended recipients or users). This net loss approach is more consistent with general rules for determining loss.

Referring Guidelines for Theft and Fraud

The amendment includes revisions to the guidelines that, prior to this amendment, referred to the loss tables in §2B1.1 or §2F1.1. Pursuant to this amendment, these guidelines will refer to the loss tables in the consolidated guideline. Prior to this amendment, the referring guidelines used the tables in §§2B1.1 and 2F1.1, which provided the first loss increment for losses in excess of $2,000. Because the consolidated loss table provides the first loss increment for losses in excess of $5,000, the referring guidelines are amended to provide a one-level increase in a case in which the loss is more than $2,000, but did not exceed $5,000. This increase is provided to avoid a one-level decrease that would otherwise occur for an offense involving losses of more than $2,000 but not more than $5,000.

Two referring guidelines (§§2B2.1 (Burglary of a Residence or a Structure Other than a Residence) and 2B3.1 (Robbery)) that use the definition of loss previously in §2B1.1 will retain that definition of loss rather than the new loss definition in the consolidated guideline. The existing definition has not proven problematic for cases sentenced under these guidelines.

Technical and Conforming Amendments

The amendment includes a number of technical and conforming amendments, most of which are necessitated by the consolidation and the deletion of the more than minimal planning enhancement.

Computing Tax Loss

This amendment addresses several issues related to tax loss. It addresses a circuit conflict regarding how tax loss under §2T1.1 (Tax Evasion) is computed for cases that involve a defendant’s under-reporting of income on both individual and corporate tax returns. Such a case often arises when (1) the defendant fails to report, and pay corporate income taxes on, income earned by the corporation; (2) the defendant diverts that unreported corporate income for the defendant’s personal use; and (3) the defendant fails to report, and to pay personal income taxes on, that diverted income. The amendment provides that the amount of the federal tax loss is the sum of the federal income tax due from the corporation and the amount of federal income tax due from the individual.

The amendment thereby resolves a circuit conflict as to the methodology used to calculate tax loss in cases involving a corporate diversion. Two circuits use a sequential method to aggregate the tax loss. Under this method, the court determines the corporate federal income tax that would have been due, subtracts that amount from the amount diverted to the defendant personally, then determines the personal federal income tax that would have been due on the reduced diverted amount. See United States v. Harvey, 996 F.2d 919 (7th Cir. 1993); and United States v. Martinez-Rios, 143 F.3d 662 (2d Cir. 1998). The Commission adopted the alternative method used in United States v. Cseplo, 42 F.3d 360 (6th Cir. 1994), in which the court determines the corporate federal income tax due on the diverted amount, and adds that amount to the personal federal income tax due on the total amount diverted. This clarifies the prior rule in Application Note 7 of §2T1.1 that "if the offense involves both individual and corporate tax returns, the tax loss is the aggregate tax loss from the offenses taken together" and reflects the Commission’s conclusion that, in cases of corporate diversions, the method for computing total tax loss adopted by the Sixth Circuit in Cseplo more accurately reflects the seriousness of the total harm caused by these offenses than would be reflected by the alternative method.

In evasion-of-payment tax cases, the Commission amended the definition of "tax loss" to include interest and penalties because, in contrast to evasion-of-assessment tax cases, such amounts appropriately are included in tax loss for such cases. This amendment limits the inclusion of interest or penalties to willful evasion of payment cases under 26 U.S.C. § 7201 and willful failure to pay cases under 26 U.S.C. § 7203. The nature of these cases is such that the interest and penalties often greatly exceed the assessed tax amount constituting the bulk of the harm associated with these offenses.

This amendment also revises the sophisticated concealment enhancement in subsection (b)(2) of §§2T1.1 (Tax Evasion) and 2T1.4 (Aiding, Assisting, Procuring, Counseling, or Advising Tax Fraud) to conform to the sophisticated means enhancement in the consolidated guideline, including imposition of a minimum offense level of level 12. This revision is appropriate inasmuch as certain tax offenses can be committed using sophisticated means in addition to being concealed in a sophisticated manner. Indeed, tax offenses committed in a sophisticated manner are more serious offenses, and reflect a greater culpability on the part of the offender (just as a tax offense concealed in a sophisticated manner reflects greater culpability). Consequently, this revision will allow the enhancement to apply to a somewhat greater range of tax offenses than the previously existing sophisticated concealment enhancement.

In addition, the amendment revises "offshore bank accounts" by substituting "financial" for "bank", to ensure that the enhancement applies to conduct involving similar kinds of accounts, consistent with language in §2S1.1 (Laundering of Monetary Instruments; Engaging in Monetary Transactions in Property Derived from Unlawful Activity). A similar revision is made in §2B1.1.

Effective Date: The effective date of this amendment is November 1, 2001.

	Loss (Apply the Greatest)	Increase in Level

(A)	$100 or less	no increase
(B)	More than $100	add 1
(C)	More than $1,000	add 2
(D)	More than $2,000	add 3
(E)	More than $5,000	add 4
(F)	More than $10,000	add 5
(G)	More than $20,000	add 6
(H)	More than $40,000	add 7
(I)	More than $70,000	add 8
(J)	More than $120,000	add 9
(K)	More than $200,000	add 10
(L)	More than $350,000	add 11
(M)	More than $500,000	add 12
(N)	More than $800,000	add 13
(O)	More than $1,500,000	add 14
(P)	More than $2,500,000	add 15
(Q)	More than $5,000,000	add 16
(R)	More than $10,000,000	add 17
(S)	More than $20,000,000	add 18
(T)	More than $40,000,000	add 19
(U)	More than $80,000,000	add 20.

	Loss (Apply the Greatest)	Increase in Level

(A)	$2,000 or less	no increase
(B)	More than $2,000	add 1
(C)	More than $5,000	add 2
(D)	More than $10,000	add 3
(E)	More than $20,000	add 4
(F)	More than $40,000	add 5
(G)	More than $70,000	add 6
(H)	More than $120,000	add 7
(I)	More than $200,000	add 8
(J)	More than $350,000	add 9
(K)	More than $500,000	add 10
(L)	More than $800,000	add 11
(M)	More than $1,500,000	add 12
(N)	More than $2,500,000	add 13
(O)	More than $5,000,000	add 14
(P)	More than $10,000,000	add 15
(Q)	More than $20,000,000	add 16
(R)	More than $40,000,000	add 17
(S)	More than $80,000,000	add 18.

	"Tax Loss (Apply the Greatest)	Offense Level

(A)	$1,700 or less	6
(B)	More than $1,700	7
(C)	More than $3,000	8
(D)	More than $5,000	9
(E)	More than $8,000	10
(F)	More than $13,500	11
(G)	More than $23,500	12
(H)	More than $40,000	13
(I)	More than $70,000	14
(J)	More than $120,000	15
(K)	More than $200,000	16
(L)	More than $325,000	17
(M)	More than $550,000	18
(N)	More than $950,000	19
(O)	More than $1,500,000	20
(P)	More than $2,500,000	21
(Q)	More than $5,000,000	22
(R)	More than $10,000,000	23
(S)	More than $20,000,000	24
(T)	More than $40,000,000	25
(U)	More than $80,000,000	26.",

	"Tax Loss (Apply the Greatest)	Offense Level

(A)	$2,000 or less	6
(B)	More than $2,000	8
(C)	More than $5,000	10
(D)	More than $12,500	12
(E)	More than $30,000	14
(F)	More than $80,000	16
(G)	More than $200,000	18
(H)	More than $400,000	20
(I)	More than $1,000,000	22
(J)	More than $2,500,000	24
(K)	More than $7,000,000	26
(L)	More than $20,000,000	28
(M)	More than $50,000,000	30
(N)	More than $100,000,000	32.".

Sign Up for Email Updates