## Facts

- Sunrise Savings and Loan Association in South Florida faced major losses tied to two large borrowers, William Frederick and Thomas Moye.
- Robert C. Jacoby, Sunrise’s president and board chairman, and Thomas Skubal, a vice-president of Sunrise Mortgage Corporation (a Sunrise subsidiary), were accused of participating in transactions meant to conceal the borrowers’ worsening financial condition and related risks to Sunrise.
- From January 1983 to July 1985, the scheme included facilitating unauthorized overdrafts for Frederick and Moye that were not approved by Sunrise’s board and were not disclosed to state and federal regulators.
- The conduct also involved misapplication of institution funds and concealment of delinquencies through false statements and false entries in loan-related records.
- A federal grand jury indicted Jacoby and Skubal (among others) on multiple counts; after a joint trial (with a co-defendant later severed due to a medical emergency), a jury convicted Jacoby and Skubal on most counts.
- A key piece of evidence was a memorandum by Sunrise’s outside counsel, Dana Scheer, documenting that Jacoby authorized closing loans without required safeguards and despite legal concerns; Scheer was unavailable at trial after invoking the Fifth Amendment.

## Issues

1. Whether the district court erred in admitting Scheer’s memorandum over hearsay and Confrontation Clause objections, including under the residual hearsay exception and related reliability theories (business records, recorded recollection, and habit evidence).
2. Whether alleged prosecutorial misconduct required reversal because it rendered the trial fundamentally unfair or likely affected the verdict.
3. Whether denial of severance in the joint trial was an abuse of discretion under Federal Rule of Criminal Procedure 14 due to claimed prejudice.
4. Whether the evidence was sufficient to support Skubal’s convictions under the applicable standard of review.
5. Whether the jury instructions on one charged offense mis-stated the law or misled the jury, requiring reversal.

## Decision

- The Eleventh Circuit affirmed the convictions and sentences of Jacoby and Skubal.
- The court upheld admission of Scheer’s memorandum, finding adequate guarantees of reliability and no Confrontation Clause violation.
- The court rejected claims of prosecutorial misconduct as non-reversible under due process and prejudice standards.
- The court held the district court did not abuse its discretion in denying severance because defendants failed to show compelling prejudice.
- The court found the evidence sufficient for Skubal’s convictions when viewed in the light most favorable to the government.
- The court held the jury instructions, read as a whole, were not erroneous or misleading.

## Legal Principles

- A hearsay statement may be admitted under the residual exception (then Fed. R. Evid. 804(b)(5)) when the declarant is unavailable and the statement has equivalent circumstantial guarantees of trustworthiness, including support from timing, professional duty, routine retention, and corroboration.
- Testimony about a regular practice of preparing and keeping memoranda can support reliability and may relate to analyses under business-record concepts (Fed. R. Evid. 803(6)), recorded recollection (Fed. R. Evid. 803(5)), and habit (Fed. R. Evid. 406), even if the trial court admits the evidence under a different hearsay route.
- Admission of an unavailable declarant’s out-of-court statement does not violate the Confrontation Clause where the statement bears sufficient indicia of reliability.
- Prosecutorial misconduct warrants reversal only if it renders the trial fundamentally unfair or creates a reasonable probability of affecting the verdict when assessed in context.
- Severance is discretionary under Fed. R. Crim. P. 14; joint trials are favored for defendants charged in a common scheme, and reversal requires a showing of compelling prejudice.
- On sufficiency review, a conviction stands if, viewing the evidence in the government’s favor, a rational jury could find each element beyond a reasonable doubt.
- Jury instructions are evaluated as a whole; minor ambiguity is not reversible absent a misleading statement of law or prejudicial error.

## Conclusion

The Eleventh Circuit upheld Sunrise officers’ convictions arising from concealed overdrafts and falsified loan records, ruling that a lawyer’s contemporaneous memorandum could be admitted based on strong reliability indicia and that the defendants failed to show reversible misconduct, severance error, evidentiary insufficiency, or instructional error.


United States v. Jacoby, 955 F.2d 1527 (11th Cir. 1992)