Opinion ID: 529953
Heading Depth: 3
Heading Rank: 1

Heading: The Business Records Exception

Text: 73 The business record exception to the hearsay rule requires that the witness who lays the foundation for the admission of the evidence testify that: (1) the declarant in the records had knowledge to make accurate statements; (2) that the declarant recorded the statements contemporaneously with the actions which were the subject of the reports; (3) that the declarant made the record in the regular course of the business activity; and (4) that such records were regularly kept by the business. 17 74 It is clear that neither witness called by the government had any knowledge as to the accuracy of the information on which the FCCB/FFCM documents was based or as to the knowledge of the persons who prepared the records. Neither Burns nor Aderhold knew that the commodities trades reported in the FCCB/FFCM statements were made, nor did they know whether the individual sending reports of the trades to CIS/ADP had such knowledge. Consequently, neither Burns nor Aderhold was a qualified witness with respect to the manner in which FCCB/FFCM maintained or compiled its records and, thus, neither provided the necessary foundation for the admission of these documents. 75 We recognize that documents may be admitted under the business record exception to the hearsay rule when circumstantial evidence provides the necessary foundation. See In re Japanese Electronic Products Litigation, 723 F.2d at 288. And, although the government maintains that the NC Bank records that verify the dates and amounts of deposits and receipts with FCCB/FFCM serve to provide circumstantial evidence for such a foundation, the NC Bank records do not verify significant portions of these documents--that is, the remaining value of the commodities investment is not independently verified by the NC Bank records. Thus, we conclude that the government failed to lay the proper foundation for the admission of the FCCB/FFCM statements not contained in the NC Bank files. 18 76 The government contends that the early FCCB records found in the NC Bank files were admissible as NC Bank records. See brief of appellee at 26-27. To the very limited extent that these documents confirm data transmitted between NC Bank and FCCB, we agree. In other words, these documents may be considered NC Bank records to the extent that they confirm the transfer of funds between NC Bank and FCCB. With respect to the contemporaneous value of the FCCB investment, however, the records are inadmissible inasmuch as the government has failed to establish a proper foundation for their admission. 19 Clearly, NC Bank had no independent knowledge of the value of these investments on the dates shown in the record nor did it know how the person who prepared the records obtained his knowledge of them. 77 We also note that Furst raised an additional objection to the admission of these documents under the business record exception. See Trial Transcript of Jan. 10, 1989, at 91-92. He contended that inasmuch as FCCB/FFCM has been subject to federal investigation for its practices, that the surrounding circumstances suggest that its documents lack the requisite trustworthiness. Under our analysis, this contention is moot except to the extent that it would bar the admission of those records contained in NC Bank's files for the limited purpose of confirming the transfers between NC Bank and FCCB. It is clear, however, that the FCCB records are sufficiently trustworthy when so limited in time and use since they merely confirm NC Bank's other records. 78 Thus, we conclude that the district court erred in admitting, under Fed.R.Evid. 803(6), the FCCB/FFCM statements not contained in NC Bank's files and in admitting even those statements found in NC Bank's files to the extent the statements contained any data other than confirmations of transactions with NC Bank.