United States v. Jacoby

Rob Jacoby (defendant) was president of the Sunrise Savings and Loan Association (Sunrise). Jacoby was indicted for fraud related to Sunrise’s concealment of the questionable financial condition of its borrowers. Dana Scheer was Sunrise’s outside counsel. One of Scheer’s tasks was helping Sunrise close loans. Scheer wrote a memorandum to the file stating that Jacoby authorized him to close certain loans even though Jacoby had “no surveys, appraisals, title commitments, utility letters, permits, [or] opinions of counsel,” and even though closing the loans would violate state law. At trial, Scheer declined to testify, asserting his Fifth Amendment right against self-incrimination. As a result, the prosecution (plaintiff) sought to introduce Scheer’s memorandum into evidence. Scheer’s paralegal and legal secretary testified that it was Scheer’s habit to dictate memoranda to file if anything needed to be explained regarding a closing. They testified that he would not write a memorandum for every closing but would write them “from time to time” and “more than occasionally.” They testified that he would dictate these memoranda around the time of the closing, as he did with the memorandum in this case. They also testified that it was the firm’s business practice to keep such memoranda in its firm files. The district court admitted the memorandum under the residual exception to the hearsay rule. Given this rationale for admission, the district court discussed but did not decide whether the memorandum would be admissible under Federal Rule of Evidence 803(6), the business-records exception to the hearsay rule. A jury convicted Jacoby, and he appealed.