United States v. Fred S. Pang
63 Fed. R. Serv. 1374, 93 A.F.T.R.2d (RIA) 1573, 362 F.3d 1187 (2004)
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Rule of Law:
Under the Federal Rules of Evidence, checks are self-authenticating commercial paper and non-hearsay verbal acts, whereas invoices are not self-authenticating and require extrinsic evidence for authentication but may be admissible against a party as a non-hearsay admission if the party created them.
Facts:
- Fred S. Pang was the owner and operator of Sin Ma Imports, a wholesale company.
- The government alleged that Pang failed to report all income derived from sales to several customers, including a company named Wo Lee Co.
- The government was unable to procure a representative from Wo Lee Co. to testify at Pang's trial.
- To prove the unreported income, the government sought to introduce original invoices issued by Pang's company, Sin Ma, to Wo Lee, along with the corresponding original cancelled checks written on Wo Lee's bank account.
- An IRS agent testified that the owner of Wo Lee Co. had provided him with these documents.
- The submitted invoices were identical to other invoices already admitted into evidence, matched carbonless copies from Pang's own records, bore sequential invoice numbers, and correlated dollar-for-dollar with the Wo Lee cancelled checks.
Procedural Posture:
- The United States charged Fred S. Pang in an information filed in the U.S. District Court (trial court).
- Pang filed a pre-trial motion to suppress statements, which the district court denied.
- At trial, Pang objected to the admission of the Wo Lee Co. invoices and cancelled checks on foundation and hearsay grounds.
- The district court overruled the objections and admitted the documents.
- A jury found Pang guilty on five counts of unlawful structuring of currency transactions, four counts of income tax evasion, and four counts of filing false tax returns.
- Pang, as appellant, appealed his conviction to the United States Court of Appeals for the Ninth Circuit.
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Issue:
Do commercial documents like checks and invoices require the same foundational evidence for admission at trial under the Federal Rules of Evidence?
Opinions:
Majority - Silverman, Circuit Judge
No. The court held that checks and invoices have different foundational requirements for admissibility. Checks, as a form of commercial paper, are self-authenticating under Federal Rule of Evidence 902(9) and do not require extrinsic evidence of authenticity. Furthermore, checks are considered non-hearsay 'verbal acts'—legally operative documents that create legal rights and obligations—and are thus not barred by the hearsay rule. In contrast, invoices are not commercial paper and are not self-authenticating. They must be authenticated through extrinsic evidence under Rule 901, which the government sufficiently provided through circumstantial proof (similarity to other invoices, sequential numbering, and correlation with checks). Finally, the invoices were admissible against Pang because, as documents created by his own company, they qualified as non-hearsay admissions by a party-opponent under Rule 801(d)(2).
Analysis:
This case provides a clear, practical application of evidentiary rules for common business records. It solidifies the distinction between self-authenticating documents under FRE 902 and those requiring authentication through circumstantial evidence under FRE 901. The decision is significant for prosecutors and civil litigators as it provides a roadmap for admitting crucial financial documents when a custodial witness is unavailable. It reinforces that while some documents like checks get an evidentiary free pass on authenticity, others like invoices require a foundational showing, which can be met through strong circumstantial links to other reliable evidence.
