Eleventh Circuit Determines When Calculating Money Laundering Adjusted Offense Levels: Consider Only Behavior Associated With the Laundering, Not the Underlying Offense

In United States v. Salgado, No. 12-15691 (March 14, 2014), the Eleventh Circuit clarified a rarely-explored nuance in the United States Sentencing Guidelines (“the guidelines”) as applied to multi-count convictions involving money laundering charges. The appellant claimed the district court erred when calculating the adjusted offense level of his money laundering conviction by considering his role in a drug conspiracy that generated the money. The Eleventh Circuit agreed, and remanded for resentencing.

The confusion arose because in a typical application of the guidelines, all of the convictions are grouped together as “underlying offense[s]” involved in the multi-count conviction. U.S.S.G. §2S1.1 cmt. n.6. At that point, the presentence report would determine the base offense level and adjust it by looking to evidence from all of the convictions involved. U.S.S.G. §2S1.1(a)(1) cmt. n.2(A). That is precisely the process the district court followed here, and if the multi-count convictions at issue were exclusively drug crimes, it would have yielded the appropriate result.

However, because the offense level calculation is different for multi-count convictions involving money laundering, the district court erred. That is because U.S.S.G. § 1B1.5(c) specifies that if an offense level is calculated by reference to another offense, the adjustments are also determined by the guidelines for that other offense, “except as otherwise provided.” And where money laundering is involved, the guidelines “otherwise provide[].” Application Note 2(C) of U.S.S.G. § 2S1.1. As a result, a role enhancement to the offense level of a money laundering conviction can only be based on conduct from the laundering conviction itself, and not the underlying offense.

Because conduct relating to the underlying offense cannot enhance the money laundering offense level, the presentence report calculation is also changed. To prevent a defendant from receiving a lower overall offense level, the guidelines demand a more extensive calculation in the presentence report. U.S.S.G. § 3D1.3(a) cmt. n.2. Once the convictions are grouped together, the presentence report should specify which of the individual convictions in the grouping would yield the highest adjusted offense individually. Therefore, if the underlying offenses—which can be enhanced with conduct involving the money laundering—yield a higher offense level, that will be the level that is applied at sentencing. Because the district court here failed to follow the process outlined in §3D1.3(a) cmnt. n.2, the case was remanded for a calculation of the appropriate offense level.

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