United States v. Kerley

United States Court of Appeals for the Sixth Circuit · 2015 · Evidence

784 F.3d 327 (6th Cir.)

Updated August 22, 2026

EvidenceRule 701lay opinionparticularized knowledgeunderwriting testimonymortgage fraudsecondary-evidence summariesRule 1006

Facts

Whaley proposed using straw buyers to extract equity from cabins he and his sister had built, while mortgage broker Bevins submitted loan applications falsely inflating borrowers’ finances and falsely stating they would bring their own funds to closing. At Whaley’s direction, all closings were handled by Kerley’s title company, and Kerley signed HUD-1 forms representing that borrowers had brought their own funds even though they had not, while approving methods to disguise that fact. At trial, the government introduced testimony from SunTrust and Citizens employees about how those lenders would have treated the loans had they known the truth, as well as summary exhibits and summary-witness testimony synthesizing the transaction documents. Whaley also sought to use his own pre-indictment statement to law enforcement to support an advice-of-counsel theory, and Kerley challenged his money-laundering conviction tied to the Peggy Lane transaction and his sentencing loss and restitution calculations.

Issue

Whether the district court improperly admitted lender-employee testimony as lay opinion and admitted summary exhibits and summary-witness testimony. Whether exclusion of Whaley’s own pre-indictment statement violated his constitutional right to present a defense, whether the evidence was sufficient as to Whaley’s fraudulent intent and Kerley’s money-laundering liability, and whether Kerley’s sentence was procedurally or substantively unreasonable.

Rule

A witness may testify under Rule 701 when the opinion is rationally based on the witness’s perception, helpful, and not based on specialized knowledge within Rule 702; testimony grounded in particularized knowledge gained through employment with a business may qualify as lay opinion even if based on after-the-fact review of records and even if the witness was not personally involved in the specific transactions. Secondary-evidence summaries are admissible when they accurately and reliably synthesize complex admitted evidence and assist the jury, especially with a limiting instruction. A defendant has no constitutional right to introduce his own inadmissible hearsay, and Rule 106 does not make otherwise inadmissible evidence admissible.

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

One of 10 multiple-choice questions for this case. Pick an answer to see why.

In a federal fraud trial in Cincinnati, a lender calls Maya Torres, its current underwriting director. She worked in the lender’s underwriting department during the relevant years, regularly applied that lender’s internal loan policies then, and reviewed archived files before testifying. She was not the underwriter assigned to the disputed loans.

Torres proposes to testify that, if the lender had known the borrowers’ down-payment funds were secretly advanced by the seller, the lender would not have approved or funded the loans. Is the testimony most likely admissible?

Explanation. The testimony is admissible under Rule 701 if it is rationally based on the witness’s perception, helpful, and not based on Rule 702-type specialized knowledge. The majority held that a business employee may give lay opinion grounded in particularized knowledge gained through employment, even after reviewing records after the fact and even without personal involvement in the specific transactions. Here Torres is applying her firsthand, job-based knowledge of her lender’s own policies, not offering a generalized expert treatise. (Derived from United States v. Kerley (n.d.).)