2005 Federal Sentencing Guidelines
Chapter 8 - PART C - FINES
§8C2.5. Culpability Score
(a) Start with 5 points and apply subsections
(b) through (g) below.
(b) Involvement in or Tolerance of
Criminal Activity
If more than one applies, use the greatest:
(1) If --
(A) the organization had 5,000 or more employees and
(i) an individual within high-level personnel of the organization
participated in, condoned, or was willfully ignorant of the offense;
or
(ii) tolerance of the offense by substantial authority personnel was
pervasive throughout the organization; or
(B) the unit of the organization within which the offense was committed
had 5,000 or more employees and
(i) an individual within high-level personnel of the unit participated
in, condoned, or was willfully ignorant of the offense; or
(ii) tolerance of the offense by substantial authority personnel was
pervasive throughout such unit,
add 5 points; or
(2) If --
(A) the organization had 1,000 or more employees and
(i) an individual within high-level personnel of the organization
participated in, condoned, or was willfully ignorant of the offense;
or
(ii) tolerance of the offense by substantial authority personnel was
pervasive throughout the organization; or
(B) the unit of the organization within which the offense was committed
had 1,000 or more employees and
(i) an individual within high-level personnel of the unit participated
in, condoned, or was willfully ignorant of the offense; or
(ii) tolerance of the offense by substantial authority personnel was
pervasive throughout such unit,
add 4 points; or
(3) If --
(A) the organization had 200 or more employees and
(i) an individual within high-level personnel of the organization
participated in, condoned, or was willfully ignorant of the offense; or
(ii) tolerance of the offense by substantial authority personnel was pervasive
throughout the organization; or
(B) the unit of the organization within which the offense was committed
had 200 or more employees and
(i) an individual within high-level personnel of the unit participated
in, condoned, or was willfully ignorant of the offense; or
(ii) tolerance of the offense by substantial authority personnel was
pervasive throughout such unit,
add 3 points; or
(4) If the organization had 50 or more employees and an individual within
substantial authority personnel participated in, condoned, or was willfully
ignorant of the offense, add 2 points;
or
(5) If the organization had 10 or more employees and an individual within
substantial authority personnel participated in, condoned, or was willfully
ignorant of the offense, add 1 point.
(c) Prior History
If more than one applies, use the greater:
(1) If the organization (or separately managed line of business) committed
any part of the instant offense less than 10 years after (A) a criminal adjudication
based on similar misconduct; or (B) civil or administrative adjudication(s)
based on two or more separate instances of similar misconduct, add 1 point;
or
(2) If the organization (or separately managed line of business) committed
any part of the instant offense less than 5 years after (A) a criminal adjudication
based on similar misconduct; or (B) civil or administrative adjudication(s)
based on two or more separate instances of similar misconduct, add 2 points.
(d) Violation of an Order
If more than one applies, use the greater:
(1) (A) If the commission of the instant offense violated a judicial order
or injunction, other than a violation of a condition of probation; or (B)
if the organization (or separately managed line of business) violated a condition
of probation by engaging in similar misconduct, i.e.,
misconduct similar to that for which it was placed on probation, add 2 points;
or
(2) If the commission of the instant offense violated a condition of probation,
add 1 point.
(e) Obstruction of Justice
If the organization willfully obstructed or impeded, attempted to obstruct
or impede, or aided, abetted, or encouraged obstruction of justice during the
investigation, prosecution, or sentencing of the instant offense, or, with
knowledge thereof, failed to take reasonable steps to prevent such obstruction
or impedance or attempted obstruction or impedance, add 3 points.
(f) Effective Compliance and Ethics
Program
(1) If the offense occurred even though the organization had in place at
the time of the offense an effective compliance and ethics program, as provided
in §8B2.1 (Effective Compliance and Ethics Program), subtract 3 points.
(2) Subsection (f)(1) shall not apply if, after becoming aware of an offense,
the organization unreasonably delayed reporting the offense to appropriate
governmental authorities.
(3) (A) Except as provided in subdivision (B), subsection (f)(1) shall
not apply if an individual within high-level personnel of the organization,
a person within high-level personnel of the unit of the organization within
which the offense was committed where the unit had 200 or more employees,
or an individual described in §8B2.1(b)(2)(B) or (C), participated
in, condoned, or was willfully ignorant of the offense.
(B) There is a rebuttable presumption, for purposes of subsection (f)(1),
that the organization did not have an effective compliance and ethics program
if an individual—
(i) within high-level personnel of a small organization; or
(ii) within substantial authority personnel, but not within high-level
personnel, of any organization, participated in, condoned, or was willfully
ignorant of, the offense.
(g) Self-Reporting, Cooperation,
and Acceptance of Responsibility If more than one applies, use the
greatest:
(1) If the organization (A) prior to an imminent threat of disclosure or
government investigation; and (B) within a reasonably prompt time after becoming
aware of the offense, reported the offense to appropriate governmental authorities,
fully cooperated in the investigation, and clearly demonstrated recognition
and affirmative acceptance of responsibility for its criminal conduct, subtract 5 points;
or
(2) If the organization fully cooperated in the investigation and clearly
demonstrated recognition and affirmative acceptance of responsibility for
its criminal conduct, subtract 2 points;
or
(3) If the organization clearly demonstrated recognition and affirmative
acceptance of responsibility for its criminal conduct, subtract 1 point.
Commentary
Application Notes:
1. Definitions.—For
purposes of this guideline, "condoned",
"prior criminal adjudication", "similar misconduct", "substantial authority
personnel", and "willfully ignorant of the offense"
have the meaning given those terms in Application Note 3 of the Commentary
to §8A1.2 (Application Instructions - Organizations).
"Small Organization", for purposes of subsection (f)(3), means an organization
that, at the time of the instant offense, had fewer than 200 employees.
2. For purposes of subsection (b), "unit of the organization"
means any reasonably distinct operational component of the organization. For
example, a large organization may have several large units such as divisions
or subsidiaries, as well as many smaller units such as specialized manufacturing,
marketing, or accounting operations within these larger units. For purposes
of this definition, all of these types of units are encompassed within the
term "unit of the organization."
3. "High-level personnel of the organization" is defined in the Commentary
to §8A1.2 (Application Instructions - Organizations). With respect to
a unit with 200 or more employees, "high-level personnel of a unit of the organization" means
agents within the unit who set the policy for or control that unit. For example,
if the managing agent of a unit with 200 employees participated in an offense,
three points would be added under subsection (b)(3); if that organization had
1,000 employees and the managing agent of the unit with 200 employees were
also within high-level personnel of the organization in its entirety, four
points (rather than three) would be added under subsection (b)(2).
4. Pervasiveness under subsection (b) will be case specific and depend on
the number, and degree of responsibility, of individuals within substantial
authority personnel who participated in, condoned, or were willfully ignorant
of the offense. Fewer individuals need to be involved for a finding of pervasiveness
if those individuals exercised a relatively high degree of authority. Pervasiveness
can occur either within an organization as a whole or within a unit of an organization.
For example, if an offense were committed in an organization with 1,000 employees
but the tolerance of the offense was pervasive only within a unit of the organization
with 200 employees (and no high-level personnel of the organization participated
in, condoned, or was willfully ignorant of the offense), three points would
be added under subsection (b)(3). If, in the same organization, tolerance of
the offense was pervasive throughout the organization as a whole, or an individual
within high-level personnel of the organization participated in the offense,
four points (rather than three) would be added under subsection (b)(2).
5. A "separately managed line of business," as used in subsections (c) and
(d), is a subpart of a for-profit organization that has its own management,
has a high degree of autonomy from higher managerial authority, and maintains
its own separate books of account. Corporate subsidiaries and divisions frequently
are separately managed lines of business. Under subsection (c), in determining
the prior history of an organization with separately managed lines of business,
only the prior conduct or criminal record of the separately managed line of
business involved in the instant offense is to be used. Under subsection (d),
in the context of an organization with separately managed lines of business,
in making the determination whether a violation of a condition of probation
involved engaging in similar misconduct, only the prior misconduct of the separately
managed line of business involved in the instant offense is to be considered.
6. Under subsection (c), in determining the prior history of an organization
or separately managed line of business, the conduct of the underlying economic
entity shall be considered without regard to its legal structure or ownership.
For example, if two companies merged and became separate divisions and separately
managed lines of business within the merged company, each division would retain
the prior history of its predecessor company. If a company reorganized and
became a new legal entity, the new company would retain the prior history of
the predecessor company. In contrast, if one company purchased the physical
assets but not the ongoing business of another company, the prior history of
the company selling the physical assets would not be transferred to the company
purchasing the assets. However, if an organization is acquired by another organization
in response to solicitations by appropriate federal government officials, the
prior history of the acquired organization shall not be attributed to the acquiring
organization.
7. Under subsections (c)(1)(B) and (c)(2)(B), the civil or administrative
adjudication(s) must have occurred within the specified period (ten or five
years) of the instant offense.
8. Adjust the culpability score for the factors listed in subsection (e)
whether or not the offense guideline incorporates that factor, or that factor
is inherent in the offense.
9. Subsection (e) applies where the obstruction is committed on behalf of
the organization; it does not apply where an individual or individuals have
attempted to conceal their misconduct from the organization. The Commentary
to §3C1.1 (Obstructing or Impeding the Administration of Justice) provides
guidance regarding the types of conduct that constitute obstruction.
10. Subsection (f)(2) contemplates that the organization will be allowed
a reasonable period of time to conduct an internal investigation. In addition,
no reporting is required by subsection (f)(2) if the organization reasonably
concluded, based on the information then available, that no offense had been
committed.
11. "Appropriate governmental authorities," as used in subsections (f) and
(g)(1), means the federal or state law enforcement, regulatory, or program
officials having jurisdiction over such matter. To qualify for a reduction
under subsection (g)(1), the report to appropriate governmental authorities
must be made under the direction of the organization.
12. To qualify for a reduction under subsection (g)(1) or (g)(2), cooperation
must be both timely and thorough. To be timely, the cooperation must begin
essentially at the same time as the organization is officially notified of
a criminal investigation. To be thorough, the cooperation should include the
disclosure of all pertinent information known by the organization. A prime
test of whether the organization has disclosed all pertinent information is
whether the information is sufficient for law enforcement personnel to identify
the nature and extent of the offense and the individual(s) responsible for
the criminal conduct. However, the cooperation to be measured is the cooperation
of the organization itself, not the cooperation of individuals within the organization.
If, because of the lack of cooperation of particular individual(s), neither
the organization nor law enforcement personnel are able to identify the culpable
individual(s) within the organization despite the organization’s efforts
to cooperate fully, the organization may still be given credit for full cooperation.
Waiver of attorney-client privilege and of work product protections is not
a prerequisite to a reduction in culpability score under subdivisions (1) and
(2) of subsection (g) unless such waiver is necessary in order to provide timely
and thorough disclosure of all pertinent information known to the organization.
13. Entry of a plea of guilty prior to the commencement of trial combined
with truthful admission of involvement in the offense and related conduct ordinarily
will constitute significant evidence of affirmative acceptance of responsibility
under subsection (g), unless outweighed by conduct of the organization that
is inconsistent with such acceptance of responsibility. This adjustment is
not intended to apply to an organization that puts the government to its burden
of proof at trial by denying the essential factual elements of guilt, is convicted,
and only then admits guilt and expresses remorse. Conviction by trial, however,
does not automatically preclude an organization from consideration for such
a reduction. In rare situations, an organization may clearly demonstrate an
acceptance of responsibility for its criminal conduct even though it exercises
its constitutional right to a trial. This may occur, for example, where an
organization goes to trial to assert and preserve issues that do not relate
to factual guilt (e.g., to
make a constitutional challenge to a statute or a challenge to the applicability
of a statute to its conduct). In each such instance, however, a determination
that an organization has accepted responsibility will be based primarily upon
pretrial statements and conduct.
14. In making a determination with respect to subsection (g), the court may
determine that the chief executive officer or highest ranking employee of an
organization should appear at sentencing in order to signify that the organization
has clearly demonstrated recognition and affirmative acceptance of responsibility.
Background: The increased
culpability scores under subsection (b) are based on three interrelated principles.
First, an organization is more culpable when individuals who manage the organization
or who have substantial discretion in acting for the organization participate
in, condone, or are willfully ignorant of criminal conduct. Second, as organizations
become larger and their managements become more professional, participation
in, condonation of, or willful ignorance of criminal conduct by such management
is increasingly a breach of trust or abuse of position. Third, as organizations
increase in size, the risk of criminal conduct beyond that reflected in the
instant offense also increases whenever management’s tolerance of that
offense is pervasive. Because of the continuum of sizes of organizations and
professionalization of management, subsection (b) gradually increases the culpability
score based upon the size of the organization and the level and extent of the
substantial authority personnel involvement.
Historical Note: Effective
November 1, 1991 (see Appendix
C, amendment 422). Amended effective November 1, 2004 (see Appendix
C, amendment 673).
