## Facts

- Hancho C. Kim was investigated for allegedly receiving funds from a South Korean intelligence official for use in bribing members of Congress, and for denying receipt of those funds to a federal grand jury.
- The government’s theory was that Kim received $600,000 in two cash deliveries from a Korean intelligence agent but did not bribe any official; instead, he allegedly converted the money to personal use.
- The government’s principal witness testified he delivered $300,000 to Kim on September 12, 1974, and $300,000 on June 6, 1975, acting under orders from a superior.
- The witness admitted serious credibility problems, including espionage activity, document forgery and a fabricated story to impede the investigation, inconsistencies with earlier statements, and potential benefits from cooperating.
- The government introduced evidence of Kim’s financial distress before the alleged payments and a marked improvement afterward, including substantial spending and repayments in cash.
- To show an alternative legitimate source of funds, the defense offered a telex from a Korean bank stating that Kim had withdrawn $400,000 in 1977 from funds deposited to his account in 1975.
- The telex was prepared by the bank solely in response to a government subpoena, was not a routine bank record, and was described as the first such telex the bank had produced.
- The district court excluded the telex as hearsay; the jury convicted Kim of conspiracy to defraud the United States and false declarations before the grand jury, and Kim appealed.

## Issues

1. Whether the district court erred by excluding the Korean bank telex as hearsay where the defense argued it qualified under the business-records exception (Fed. R. Evid. 803(6)) or the residual exception (then Fed. R. Evid. 803(24)).
2. Whether prosecutorial comments in closing argument were so improper and prejudicial as to require reversal.
3. Whether evidence concerning Kim’s tax returns and finances was irrelevant or unfairly prejudicial under Rules 401 and 403.
4. Whether the trial court abused its discretion by denying severance of the conspiracy count and the false-declaration count.

## Decision

- The court of appeals affirmed the convictions on all counts.
- It held the telex was properly excluded as hearsay because it was prepared for purposes of the investigation/litigation and was not a record made and kept in the bank’s regular course of business.
- It upheld the denial of admission under the residual hearsay exception because the telex lacked equivalent guarantees of trustworthiness.
- It concluded the prosecutor’s closing argument, viewed in context of the entire trial, did not warrant reversal.
- It held the tax and financial evidence was relevant to Kim’s financial condition and the source of funds, and its probative value was not substantially outweighed by unfair prejudice.
- It found no abuse of discretion in denying severance because the counts were related, the evidence overlapped, and limiting instructions supported a joint trial.

## Legal Principles

- A document is not admissible under Rule 803(6) merely because it comes from a business; it must be made and kept as part of a regularly conducted activity and as a regular practice of that activity.
- Records or summaries generated in response to a subpoena or for a specific investigation/trial may be excluded under Rule 803(6) because they lack the reliability associated with routine business recordkeeping.
- The residual hearsay exception (then Rule 803(24)) requires circumstantial guarantees of trustworthiness comparable to recognized exceptions; a litigation-driven retrospective summary may fail that standard.
- Claims of improper closing argument are assessed in context; reversal requires a showing that the remarks rendered the trial fundamentally unfair or substantially affected the verdict.
- Financial and tax evidence may be admissible under Rules 401 and 403 to show motive, opportunity, and the likelihood of an illicit source of funds, subject to the trial court’s balancing discretion.
- Denial of severance is reviewed for abuse of discretion; joint trial is proper where offenses are related and proof substantially overlaps, particularly when jury instructions reduce risk of spillover prejudice.

## Conclusion

The D.C. Circuit affirmed Kim’s conspiracy and perjury-related convictions, holding that a bank telex created solely to answer a subpoena was inadmissible hearsay not saved by the business-records or residual exceptions, and that the trial court did not commit reversible error in closing-argument rulings, admission of financial evidence, or denial of severance.


United States v. Kim, 595 F.2d 755 (D.C. Cir. 1979)