On January 8, the United States Sentencing Commission approved two emergency amendments and also voted to publish for comment a number of new proposals. The emergency amendments respond to the directives in the (1) Sarbanes-Oxley Act of 2002 (corporate fraud amendment) and (2) the Bipartisan Campaign Reform Act of 2002 (campaign reform amendment).

The Corporate Fraud amendment will have an effective date of January 25, 2003. The Campaign Reform amendment does not have to be submitted to Congress until February 3, but the Commission may submit both amendments to Congress at the same time. In that case, the Campaign Reform amendment will also come into effect on January 25, 2003.

Both amendments are emergency amendments promulgated pursuant to a grant of emergency authority in the Sarbanes-Oxley and Campaign Reform legislation. The emergency amendments will remain in effect until November 1, 2003. They will be replaced by permanent amendments that the Commission will consider during its regular amendment cycle. Under the regular cycle, the Commission submits amendments to Congress on May 1, 2003, which become effective on November 1, 2003, unless Congress acts to disapprove them.

Low-level White Collar Offenses. For now, the corporate fraud emergency amendment did not change the loss table or the base offense level for low-level economic crimes. But the issue is not dead. DOJ was adamant that the Commission was "sending the wrong message" to white collar criminals and was undermining Congressional intent by not increasing penalties for low-level white collar offenses. When these amendments are repromulgated as permanent amendments in May, they may well provide increased loss table enhancements for offenses involving loss amounts as low as $100,000 or less

I. HIGHLIGHTS OF THE EMERGENCY AMENDMENTS

A. Corporate Fraud: The amendment is a six-part amendment. Four new provisions are added to U.S.S.G. § 2B1.1; the obstruction of justice guideline is amended; and new offenses created by the Act are addressed by making various changes to Appendix A and expanding the cross-reference in §2E5.3 (false statements re ERISA) to include fraud, obstrucion of justice and the various new offenses.

1) new loss table provisions:
§2B1.1(b)(1)(O): adds 28 levels if the loss is more than $200 million;
§2D1.1(b)(1)(P) adds 30 levels if the loss is more than $400 million;

2) multiple victims:
§ 2B1.1(b)(2)© provides a 6-level enhancement (2 more than currently) if the offense "involved 250 or more victims"

3) endangering solvency or financial security
§2B1.1(b)(12)(B)ii & iii: adds two new specific offense characteristics to §2B1.1(b)(12), which triggers a 4-level upward adjustment with a minimum offense level of 24 where the offense:
(i) substantially jeopardized the safety and soundness of a financial institution; [this is an existing provision]
(ii) substantially endangered the solvency or financial security of an organization that, at any time during the offense, (I) was a publicly traded company; (II) had 1,000 or more employees; or
(iii) substantially jeopardized the solvency or financial security of 100 or more victims

§2B1.1, comment. (n. 10), new commentary sets out a "non-exhaustive" list of factors for courts to consider in determining whether the offense endangered the solvency or financial security of a publicly traded company and other things

4) securities fraud enhancement
§2B1.1(b)(13): adds a 4-level enhancement if the offense "involved a violation of securities law and, at the time of the offense, the defendant was an officer or a director of a publicly traded company." new commentary provides that if this enhancement applies, the adjustment in 3B1.3 for abuse of position of trust or use of a special skill is not to be applied.

5) obstruction of justice
§2J1.2: increases the base offense level from 12 to 14; adds a new 2-level enhancement that applies where the offense involved the destruction of a substantial number of records, especially probative or essential evidence, or was otherwise extensive

B. Campaign Reform:

A new guideline, §2C1.8 was created for offenses that involve campaign finance violations. It has a base offense level 8.

There are specific offense characteristics at §2C1.8(b):
(1) an offense level increase from the loss table in §2B1.1 for transactions that exceed $5 thousand;
(2) a 2-level enhancement if the illegal transactions involved a foreign national or a 4-level enhancement if it involved a foreign government;
(3) a 2-level enhancement if the offense involved government funds or was committed for the purpose of obtaining a non-monetary Federal benefit
(4) a 2-level enhancement if the defendant engaged in more than 30 illegal transactions; and
(5) a 4-level enhancement if the offense involved a transaction made or obtained through intimidation, threats or coercion.

The guideline also includes a cross-reference to the bribery and gratuity guideline. The new guideline, which is to be grouped under §3D1.2(d), the section for offenses that aggregate harm, will trigger the "same course of conduct" and "common scheme or plan" provisions in the relevant conduct guideline.

II. APPROVED FOR PUBLICATION. Various proposals were approved to be published. Public comment will be due 60 days after publication in the Federal Register. They will be voted on in April and if submitted to Congress, will take effect on November 1 unless disapproved by Congress. Here are some of them:

A. Oxycodone, §2D1.1: Provides for using Oxycodone (actual) in determining the base offense level in a manner similar to the guidelines treatment of "actual" PCP, Amphetamine, and Meth. But also increases the marijuana equivalency for oxycodone approximately 10 fold.

B. Body Armor Enhancement, §3A1.5: New upward adjustment [2, 4 or 6 levels] for the use of body armor in offenses involving drug trafficking or crimes of violence.

C. The Commission also published "Issues for Comments" regarding offenses involving: 1. Assaults and Threats against federal judges & other federal officials; and 2. Cybercrime

By the way, if you are a Criminal Justice Act attorney, you can call the "hotline " (800.788.9908) for information about, and research assistance on, all aspects of federal criminal law and procedure. It is free to federal defenders and CJA attorneys and sponsored by the Defender Services Training Branch of the Federal Defenders Organization, which was established by the Judicial Conference Committee on Defender Services to provide training and resource support to attorneys appointed under the Criminal Justice Act.

You can read Carmen's excellent section-by-section analysis of the November, 2002 Sentencing Guideline Amendments here.