Yes, the jury can see the letters. By lying about what his lawyer advised, Jacobs gave up his right to keep that specific advice private. The court explained that it's unfair to use the idea of a lawyer's approval to trick people and then hide the truth in court. The court also agreed the letters were not privileged for another reason: Jacobs had already started the scam (getting fake IDs) before he even asked his lawyer. This showed he wasn't looking for honest advice to follow the law; he was trying to get cover for a crime he was already committing. The attorney-client privilege is meant to encourage honest legal advice, not to help people commit crimes.

Yes, Jacobs' scam did put banks at risk of losing money, even if it was a small risk, because the fake drafts could have tricked the banks into thinking debts were paid when they really weren't. It was fair to base his punishment on the amount he was trying to steal, not just what was actually stolen. The letters from his lawyer could be used as evidence because Jacobs lied about what they said to keep the scam going. And based on the evidence, it was okay to tell the jury they could find Jacobs guilty if he avoided finding out for sure that the scam was illegal.

A party seeking "to invoke the crime-fraud exception must demonstrate that there is a factual basis for a showing of probable cause to believe that a fraud or crime has been committed and that the communications in question were in furtherance of the fraud or crime."

The "factual basis must strike `a prudent person'as constituting `a reasonable basis to suspect the perpetration or attempted perpetration of a crime or fraud, and that the communications were in furtherance thereof.'"

"The crime-fraud exception removes the privilege from those attorney-client communications that are related to client communications in furtherance of contemplated or ongoing criminal or fraudulent conduct."

An inaccurate statement of a privileged communication waives the privilege with respect to that communication

With strong emphasis on intent, the crime-fraud exception applies `only when there is probable cause to believe that the communications with counsel were intended in some way to facilitate or to conceal the criminal activity.'It is therefore relevant to show that the wrong-doer had set upon a criminal course before consulting counsel

The bank fraud statute is designed to protect financial institutions and requires as an element the " `intent to victimize the institution by exposing it to actual or potential loss.'"

—concluding defendant contemplated actual harm when scheme exposed bank to risk of loss that was "rather remote

"[I] f and when there has been an in camera review, the district court exercises its discretion again to determine whether the facts are such that the exception applies."

In Carboni, the Second Circuit held that the district court properly sentenced the defendant to fifteen months imprisonment based on intended loss because "one is presumed to intend the natural and `probable'consequences of one's acts. "

Yes, a client waives the privilege with respect to a specific communication by misstating its contents to third parties. While the 'fairness doctrine' that waives privilege over an entire subject matter is generally limited to disclosures in judicial proceedings, the privilege is waived for the specific matters 'actually disclosed' extrajudicially. Here, Jacobs disclosed the substance of his attorney's two letters, albeit incorrectly, by telling customers his attorney had approved the scheme. This inaccurate statement of a privileged communication waives the privilege for that communication, allowing the letters to be admitted to correct the misrepresentation. Furthermore, the court affirmed the district court's application of the crime-fraud exception. The evidence showed Jacobs had already formed an intent to commit fraud before consulting his attorney (by obtaining false IDs and agreeing to host a seminar). He then used the communications to lend credibility to the scheme, thus furthering the fraud. The privilege does not protect communications made for the purpose of getting advice for the commission of an ongoing fraud.

Yes, Jacobs' actions did expose banks to a risk of loss as required by the bank fraud statute because the submission of worthless certified drafts created a risk that the bank would honor the draft, return evidence of the debt, and discharge the debt, even if that risk was remote. The calculation of intended loss for sentencing purposes was correct because the conspirators intended to inflict a loss amounting to the face value of the certified drafts on the banks. The crime-fraud exception applied to the attorney-client privileged letters because there was probable cause to believe that the communications were in furtherance of the fraudulent scheme, as Jacobs had misrepresented their contents to further the DEP. The jury instruction on conscious avoidance was justified due to evidence suggesting Jacobs was aware of the high probability of the DEP's illegality but avoided confirming that fact.

United States of America v. Donald E. Jacobs

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