AMENDMENT 806

Amendment: Section 2B1.1(b) is amended by redesignating paragraphs (13) through (19) as paragraphs (14) through (20), respectively; and by inserting the following new paragraph (13):

“(13) If the defendant was convicted under 42 U.S.C. § 408(a), § 1011(a), or § 1383a(a) and the statutory maximum term of ten years’ imprisonment applies, increase by 4 levels. If the resulting offense level is less than 12, increase to level 12.”;

and in paragraph (17) (as so redesignated) by striking “subsections (b)(2) and (b)(16)(B)” and inserting “subsections (b)(2) and (b)(17)(B)”.

The Commentary to §2B1.1 captioned “Application Notes” is amended—

by redesignating Notes 11 through 20 as Notes 12 through 21, respectively; and by inserting the following new Note 11:

“11. Interaction of Subsection (b)(13) and §3B1.3 (Abuse of Position of Trust or Use of Special Skill).—If subsection (b)(13) applies, do not apply §3B1.3.”;

in Note 12 (as so redesignated) by striking “(b)(14)” both places such term appears and inserting “(b)(15)”;

in Note 13 (as so redesignated) by striking “(b)(16)(A)” both places such term appears and inserting “(b)(17)(A)”;

in Note 14 (as so redesignated) by striking “(b)(16)(B)” and inserting “(b)(17)(B)”; by striking “(b)(16)(B)(i)” and inserting “(b)(17)(B)(i)”; and by striking “(b)(16)(B)(ii)” and inserting “(b)(17)(B)(ii)”;

in Note 15 (as so redesignated) by striking “(b)(18)” both places such term appears and inserting “(b)(19)”; by striking “(b)(18)(A)(iii)” both places such term appears and inserting “(b)(19)(A)(iii)”; and by striking “(b)(16)(B)” both places such term appears and inserting “(b)(17)(B)”;

in Note 16 (as so redesignated) by striking “(b)(19)” each place such term appears and inserting “(b)(20)”;

and in Note 21(B) (as so redesignated) by striking “(b)(18)(A)(iii)” and inserting “(b)(19)(A)(iii)”.

The Commentary to §2B1.1 captioned “Background” is amended by striking “(b)(13)” and inserting “(b)(14)”; by striking “(b)(15)(B)” and inserting “(b)(16)(B)”; by striking “(b)(16)(A)” and inserting “(b)(17)(A)”; by striking “(b)(16)(B)(i)” and inserting “(b)(17)(B)(i)”; by striking “Subsection (b)(17) implements the directive in section 209” and inserting “Subsection (b)(18) implements the directive in section 209”; by striking “Subsection (b)(18) implements the directive in section 225(b)” and inserting “Subsection (b)(19) implements the directive in section 225(b)”; and by striking “(b)(18)(B)” and inserting “(b)(19)(B)”.

Appendix A (Statutory Index) is amended in the line referenced to 42 U.S.C. § 408 by inserting “, 2X1.1” at the end; in the line referenced to 42 U.S.C. § 1011 by inserting “, 2X1.1” at the end; and in the line referenced to 42 U.S.C. § 1383a(a) by inserting “, 2X1.1” at the end.

Reason for Amendment: This amendment responds to the Bipartisan Budget Act of 2015 (“the Act”), Pub. L. 114–74 (Nov. 2, 2015), which made numerous changes to the statutes governing Social Security fraud offenses at 42 U.S.C. §§ 408, 1011, and 1383a. The Act added new subsections criminalizing conspiracy to commit fraud for selected substantive offenses already proscribed in Title 42 and added an increased statutory penalty provision for certain persons who commit fraud offenses under the relevant Social Security programs.

In response to these statutory changes, the amendment makes changes to both §2B1.1 (Theft, Property Destruction, and Fraud) and Appendix A (Statutory Index). The amendment to §2B1.1 addresses the increased penalty provisions of the Act by adding a new specific offense characteristic with a 4-level enhancement and a minimum offense level of 12 for those defendants subject to a 10-year statutory maximum, and adds commentary precluding the application of an adjustment under §3B1.3 (Abuse of Position of Trust or Use of Special Skill) when the new enhancement applies. The amendment to Appendix A references the new conspiracy subsections to the appropriate guidelines.

First, the amendment adds a specific offense characteristic to §2B1.1 in response to the enhanced penalty provisions of the Act. The new enhancement provides for a 4-level increase, as well as a minimum offense level of 12, for those defendants convicted under the relevant statutes and subject to the 10-year statutory maximum. The enhancement reflects both Congress’s and the Commission’s determination regarding the seriousness of these offenses, and further reflects the difficulty in calculating the true harm caused by such defendants, including the harm to the integrity and financial strength of the Social Security program and to legitimate Social Security program benefit recipients who face delays as a result of the review of claims submitted in these cases. The Commission was also persuaded in its determination by the significant administrative efforts and costs resulting from the regulatory requirement that the Social Security Administration review and redetermine the benefit eligibility for every benefit recipient associated with the defendant, whether part of the fraudulent conduct or not. The new enhancement reflects the increased harm caused by these types of cases compared to those types of fraud sentenced under §2B1.1 for which the loss table more appropriately reflects the severity of the offense.

Similar to other minimum offense levels in §2B1.1, the minimum offense level is intended to account for the difficulty in calculating the amount of loss, as well as the unique and non-monetary harms associated with offenses sentenced under the Act. As previously explained in similar contexts, “[t]he Commission frequently adopts a minimum offense level in circumstances in which, as in these cases, loss as calculated by the guidelines is difficult to compute or does not adequately account for the harm caused by the offense.” USSG App. C, Amendment 719 (effective Nov. 1, 2008).

In establishing the 4-level increase, the Commission also added commentary precluding the application of an adjustment under §3B1.3 to those defendants who are subject to the Act’s increased statutory maximum penalty. In the Act, Congress specifically defined positions of trust in the context of Social Security fraud by subjecting to the increased statutory maximum penalties those defendants who were:

a person who receives a fee or other income for services performed in connection with any determination with respect to benefits under this subchapter (including a claimant representative, translator, or current or former employee of the Social Security Administration), or who is a physician or other health care provider who submits, or causes the submission of, medical or other evidence in connection with any such determination . . . .

The Commission precluded application of §3B1.3 to these defendants because the new 4-level enhancement fully accounts for their special position. Addressing the abuse of special position in this manner will avoid uncertainty, prolonged sentencing hearings, and appeals regarding application of the abuse of trust adjustment to offenders subject to the increased statutory maximum penalties of the Act.

Second, the amendment amends Appendix A to reference the new conspiracy offenses under 42 U.S.C. §§ 408, 1011, and 1383a to §2X1.1 (Attempt, Solicitation, or Conspiracy (Not Covered by a Specific Offense Guideline)). The Commission determined that referencing these conspiracy provisions to §2X1.1, as well as the guideline referenced in the statutory index for the substantive offense, is consistent with the instructions at §1B1.2 (Applicable Guidelines).

Effective Date: The effective date of this amendment is November 1, 2018.