Hearsay is a statement made out of court and offered to prove the truth of the matter asserted.  Generally speaking, hearsay evidence is inadmissible during trial.  However, if the hearsay statement meets an exception, that statement can be admitted for its truth.  One of those exceptions is known as the exception for statements made by a co-conspirator.  Conspiracy is an agreement between two or more people to agree to commit acts that constitute a crime.

The co-conspirator exception to the hearsay rule requires: (1) the existence of a conspiracy between the declarant and the defendant must be demonstrated by a preponderance of the evidence, (2) the statements must be shown to have been made during the course of the conspiracy, and (3) they must have been made in furtherance of the common design. 

First, the prosecutor must have some evidence to show that a conspiracy actually existed between the person on trial and the person who made the statement.  Second, the prosecutor must show that the hearsay statement was made during the life of the conspiracy.  If the statement is made after the alleged crime has been committed and the conspiracy has ended, the court is not likely to admit the statement.  Lastly, the statement must be made in furtherance of the conspiracy.  For instance, the prosecutor must show that the statement helps the two people involved in the conspiracy further the crime through concealment or flight from the crime.