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United States v. Stein

October 15, 2007

UNITED STATES OF AMERICA,
v.
JEFFREY STEIN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Lewis A. Kaplan, District Judge.

MEMORANDUM AND ORDER

The four remaining defendants and the government move in limine for various evidentiary determinations.

I. Defendants' Motion

A. Testimonial Co-conspirator Declarations

Defendants first seek a determination that previous sworn testimony of defendants in this case -- including testimony at depositions, before a Senate subcommittee and before the IRS -- that might qualify as non-hearsay under Fed. R. Evid. 801(d)(2)(E)*fn1 -- is inadmissible unless the declarants are available for cross-examination because it would violate the Confrontation Clause.

A testimonial statement made in furtherance of a conspiracy triggers the Sixth Amendment right of confrontation, but may be admissible over Confrontation Clause objection, depending upon the objects of the conspiracy.*fn2 This includes truthful statements designed to lend credence to false statements intended to mislead.*fn3 Nevertheless, as the parties have not provided the Court with the precise statements to which their motion relates, it is impossible to reach any definitive conclusions. This branch of defendants' motion therefore is denied without prejudice to renewal at trial.

B. E-mails Offered as Business Records

Defendants seek a determination that e-mails are not automatically admissible as business records under Fed. R. Evid. 803(6). The government agrees in principle, but the parties disagree as to the standard to be applied.

Rule 803(6) renders admissible for its truth a record made at or near the time by a person with knowledge if the record was "kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum." The defendants erroneously argue that the government must "show[] that the e-mails at issue were created pursuant to established company procedures for the systematic or routine making of company records."*fn4 Such a specific showing is not required, as regularity of making such records and of the business activity is all that is required.*fn5 Although the phrase "business duty" appears frequently in Rule 803(6) cases, the defendants read the phrase too narrowly. The phrase "business duty" is used interchangeably with phrases such as "[being] part of a business routine"*fn6 or "[acting] in the regular course"*fn7 to describe the requirement that the declarant be someone inside the business, not a third party.*fn8

Once again, it is impossible to determine in the abstract which of the documents defendants have in mind satisfy the Rule and which do not. Nor is it possible to pass to an appropriately informed consideration of whether the circumstances of particular documents indicate a lack of trustworthiness. This branch of defendants' motion therefore also is denied without prejudice to renewal at trial.

C. IRS Litigation Documents and Closing Agreements Offered as Public Records

The defendants argue that certain IRS documents, including Revenue Agent Reports ("RARs") and Closing Agreements, are not admissible over hearsay objection under Rule 803(8)(B) because they include "matters observed by police officers and other law enforcement personnel." The defendants argue also that Closing Agreements must be excluded under Rule 408.

1. Public Records

Whether the criminal case exception of Rule 803(8)(B) applies to RARs and Closing Agreements will depend upon whether IRS agents are "other law enforcement personnel" within the meaning of the rule.

The Second Circuit "construe[s] 'other law enforcement personnel' to include, at the least, any officer or employee of a governmental agency which has law enforcement responsibilities."*fn9 It held in United States v. Ruffin that "IRS personnel who gather data and information and commit that information to records which are routinely used in criminal prosecutions are performing what can legitimately be characterized as a law enforcement function."*fn10

This holding is in some tension with United States v. Rosa*fn11 and United States v. Felix,*fn12 where the Circuit held that medical examiner reports are not excluded by the criminal case exception of Rule 803(8)(B). But Rosa and Felix do not abrogate Ruffin. Rather, they seem to rely on a conclusion that a medical examiner's report is not an observation of law enforcement personnel because it is routine and non-adversarial.*fn13

The government does not contest that the RARs and Closing Agreements are "adversarial by nature,"*fn14 but it argues that the specific pieces of information that it seeks to offer, via a Rule 1006 summary, are "precisely the ...


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