Federal Evidence Review

In bank fraud prosecution, DC Circuit concludes that the FRE 902(11) procedural certification of loan documents as business records in lieu of trial testimony did not violate the Confrontation Clause, in United States v. Adefehinti, 510 F.3d 319, 325-26 (D.C. Cir. Dec. 18, 2007) (Nos. 04-3080, 05-3046, 05-3055)

We recently noted that the Eighth Circuit, in United States v. Ali, 616 F.3d 745 (8th Cir. Aug. 5, 2010), held that Melendez-Diaz Does Not Apply To Business Records Certified By A Custodian Of Records Under FRE 803(6) and FRE 902(11). In Melendez-Diaz v. Massachusetts, the Supreme Court held that certificates of forensic analysis are “testimonial” and “the Sixth Amendment does not permit the prosecution to prove its case via ex parte out-of-court affidavits.” Melendez-Diaz v. Massachusetts, 557 U.S. __, 129 S. Ct. 2527 (2009). The analysis from a Confrontation Clause case decided before Melendez-Diaz actually lends further support for using this evidentiary procedure to admit business records by highlighting the procedural aspects of the certification rule.

In the case, five defendants were charged with bank fraud, racketeering and theft offenses based on a scheme to defraud banks. Under the scheme, the defendants purchased inexpensive properties with fraudulent identities or straw buyers and sold the properties to each other for inflated prices, using the bank loans for the purchase. At trial, hundreds of bank loan documents (including loan applications, sales contracts, promissory notes, verifications of deposit, verifications of employment and related bank documents) were admitted as bank records, under FRE 803(6), through certifications by custodians of record under FRE 902(11). The defense raised two objections: “first, that the custodians making the certificates lacked knowledge of the propositions they certified and that those propositions were altogether unsupported; second, that the assertions in the Rule 902(11) certificates constituted testimonial evidence within the meaning of Crawford v. Washington, 541 U.S. 36, 42-56 (2004), so that introduction of the loan documents via those certificates rather than by live testimony violated defendants’ rights under the Sixth Amendment’s Confrontation Clause.” Adefehinti, 510 F.3d at 324.

The DC Circuit affirmed the admission of the bank records under FRE 902(11). On the first issue, the personal knowledge of the person creating the business record was important and not the custodian certifying the business records. Adefehinti, 510 F.3d at 325-26 (citing United States v. Williams, 205 F.3d 23, 34 (2d Cir. 2000) (“‘The custodian need not have personal knowledge of the actual creation of the document’ to lay a proper foundation for the receipt. Here, the government laid a proper foundation for the cash advance receipt because Cyril Woung, the bank official who testified, was sufficiently familiar with the bank’s practice and testified that such receipts were made as part of that practice.”) (other citations omitted); see also United States v. Jakobetz, 955 F.2d 786, 800 (2d Cir. 1992) (toll receipt incorporated into a business’s records qualified as a business record, despite the fact that its custodian had no knowledge of the toll receipt’s preparation, because the receipt had been embedded in the company’s business records to allow such an inference of authenticity)). As the circuit explained: In this case, where the documents were “made” by the banks in the sense of being acquired, used and filed by them, the “knowledge” requirement is clearly satisfied if, as the certificates indicated, the persons in charge of the documents’ acquisition, use and filing had knowledge of the circumstances in which the acquisition, use and filing occurred. Adefehinti, 510 F.3d at 327.

On the second Confrontation Clause issue, the circuit rejected the defense argument that the FRE 902(11) certificates were substitutes for live testimonial trial testimony. The circuit noted that business records were not considered testimonial, including in the Crawford decision. Adefehinti, 510 F.3d at 327 (citing Crawford, 541 U.S. at 56 (“Most of the hearsay exceptions covered statements that by their nature were not testimonial — for example, business records or statements in furtherance of a conspiracy.”); United States v. Ellis, 460 F.3d 920, 927 (7th Cir. 2006) (Given the records themselves do not fall within the constitutional guarantee provided by the Confrontation Clause, it would be odd to hold that the foundational evidence authenticating the records do[es].”)).

The circuit noted that the business records hearsay rule established an avenue to consider records lacking trustworthiness and the certification rule was a “procedural device”:

"We note … that Rule 803(6) provides an explicit exception: otherwise qualifying documents are admissible 'unless the source of information or the method or circumstances of preparation indicate lack of trustworthiness.' Rule 902(11) provides a procedural device for applying this exception (and perhaps others) to certificates, requiring advance notice by a party planning to offer evidence via 902(11) certificates in order 'to provide an adverse party with a fair opportunity to challenge them.' In an appropriate case the challenge could presumably take the form of calling a certificate’s signatory to the stand. So hedged, the Rule 902(11) process seems a far cry from the threat of ex parte testimony that Crawford saw as underlying, and in part defining, the Confrontation Clause."

While the Adefehinti case pre-dated the Melendez-Diaz case, it did consider whether business records were testimonial under the Confrontation Clause. The analysis in the case provides further support for the proposition that FRE 902(11) certificates do not violate the Confrontation Clause bar against testimonial hearsay.