Comments Concerning Proposed Amendments to the United States Sentencing Guidelines
March 27, 2001

Introduction | Contents | 20.1 | 20.2 | 12.B | 12.F | 12.G | 12.G.1 | 12.G.2 | 12.G.3

Proposed Amendment 20: Money Laundering

2. Other Proposals

The Commission has noted that there may be cases in which "third-party" money launderers will receive a higher base offense level than the offender who committed the underlying offense. This can happen when the base offense level for the offender who committed the underlining offense is determined with reference to the amount of the loss but the based offense level for the "third party" launderer is determined with reference to the gross amount of laundered funds. The Commission has suggested three alternatives to deal with this type of case: allow a downward departure; create a specific rule that the offense level be determined by the lesser of the amount of the laundered funds or the amount of the loss; or do nothing. In our view, the preferable alternative is to create a specific rule that the offense level is determined with reference to the amount of the laundered funds or the amount of the loss, whichever is less. The codification of such a rule will promote certainty and uniformity.

The Commission has invited comments on the following enhancements: (1) whether the proposed enhancement for sophisticated concealment should apply to all forms of concealment; (2) whether there should be an enhancement if a defendant launders funds with the intent to engage in conduct constituting a violation of §7201 or §7206 of the Internal Revenue Code; and (3) whether there should be an enhancement if a defendant is a "direct" money launderer, no other enhancement applies and the value of the laundered funds is greater than $10,000.

These enhancements ensure that there will be an upward adjustment virtually every time a defendant’s conduct happens to fall within the definition of money laundering regardless of whether the crime is the aggravated type of conduct that Congress originally intended to combat with the money laundering statutes. This is contrary to the overall thrust of the current amendments which were designed to avoid disproportionate sentences in ordinary fraud cases that also happen to violate the money laundering statutes. Accordingly, we believe it is appropriate to limit enhancements to only those cases which involve additional aggravating money laundering conduct.

We have chosen not to comment on the following issues: (1) whether application of §2S1.1(a)(1) should be expanded to include offenders who otherwise would be accountable for the underlying offense solely on the basis of §1B1.3(a)(1)(B); (2) whether eligibility for an enhancement under §2S1.1(b)(2)(A) should be expanded to include "direct" money launderers who launder the criminally derived proceeds of others in addition to their own criminally derived proceeds; (3) whether there should be a downward adjustment for defendants who are convicted under 18 U.S.C. §1957 who did not commit the underlying offense and to whom no other enhancement applies; (4) whether a conviction for money laundering should be grouped with a conviction for the underlying offense; and (5) whether a conviction under 18 U.S.C. §1960 is more appropriately referenced under §2T2.2 or §2S1.3.

Introduction | Contents | 20.1 | 20.2 | 12.B | 12.F | 12.G | 12.G.1 | 12.G.2 | 12.G.3