The Tenth Circuit Court of Appeals issued its opinion in United States v. Kalu on Monday, June 29, 2015.
Kizzy Kalu recruited 41 foreign nurses to work in the United States under specialty H-1B visas, advising the nurses they would be nurse instructor/supervisors at Adam University. Instead, when they arrived in the United States, the nurses were placed in nursing homes, where they performed ordinary nursing duties. Kalu’s company, Advanced Training and Education for Foreign Healthcare Professionals Group, LLC (“FHPG”), placed the nurses in the nursing homes and although the nurses were typically paid $35/hour for their labor, FHPG paid the nurses only $20/hour and kept the rest of the money. If the nurses left their FHPG employment, Kalu would charge them $1,000 per month regardless of whether they were employed and would threaten them with deportation, visa revocation, and penalties if they did not pay Kalu’s monthly fee.
Kalu and the former president of AU were charged with a 132-count indictment. In Kalu’s superseding indictment, (1) Counts 1-22 charged mail fraud; (2) Counts 23-37 charged encouraging and inducing an alien; (3) Counts 38-40 charged visa fraud; (4) Counts 41-57 charged forced labor; (5) Counts 55-64 charged trafficking in forced labor; (6) Counts 65-95 charged money laundering. Kalu was eventually convicted on 89 of the 95 counts and sentenced to 130 months’ imprisonment for mail fraud, forced labor, trafficking in forced labor, and money laundering and concurrently sentenced to 120 months’ imprisonment for visa fraud and encouraging and inducing aliens. Kalu was also ordered to pay $475,592.94 in forfeiture and $3,790,338.55 in restitution to compensate the nurses for their losses. Kalu appealed, contending erroneous jury instructions required reversal and the restitution award was erroneously calculated.
The Tenth Circuit first evaluated Instruction 17, which discussed the elements of mail fraud. Kalu contended the trial court plainly erred by failing to instruct the jury that specific intent to defraud is an element of mail fraud. The Tenth Circuit agreed that the trial court plainly erred, but found that the error did not substantially affect the fairness of the proceedings because there was ample record evidence that Kalu misrepresented the details of the nurses’ employment and salaries to the nurses and to immigration officials, knew the statements he was making were false, and profited from the scheme. The Tenth Circuit held Kalu failed to make a showing that the outcome of the proceeding would have been different if the jury had been properly instructed.
Turning next to Kalu’s contention that the district court’s mail fraud instruction constructively amended the superseding indictment, the Tenth Circuit found no error. Kalu’s argument failed at the first prong of plain error review.
Kalu next alleged the instructions misstated the necessary mens rea for encouraging or inducing an alien. The district court’s instructions used a knowledge and negligence standard rather than a knowledge and recklessness standard, thus lowering the burden for convicting Kalu under the statute. The Tenth Circuit agreed with Kalu that the district court plainly erred in instructing the jury on knowledge and negligence rather than recklessness. Again, though, the Tenth Circuit found that the error did not substantially affect Kalu’s rights or the fairness of the proceeding, since Kalu failed to demonstrate a reasonable probability that the outcome would have been different if the jury were properly instructed because the prosecution presented ample evidence of Kalu’s actual knowledge at trial.
Kalu also contended that the instructions misrepresented the definition of “serious harm” by changing the word “compel” to “cause.” The Tenth Circuit found no error in this change, noting that ample evidence showed Kalu compelled the nurses to continue in their forced employment.
Finally, the Tenth Circuit evaluated the restitution award. The trial court calculated the restitution award by subtracting the amount the nurses were actually paid from the amount they were promised. The district court relied on the promised three-year term of employment in its calculations. The Tenth Circuit found no error in this method of calculation. Although Kalu argued he only promised the nurses “up to $72,000 annually,” when he completed their H-1B applications, he wrote they would be paid $72,000 annually, thereby promising them that amount. The Tenth Circuit also rejected Kalu’s argument that the nurses may have left their employment before the expiration of the three-year period, finding the nurses that left did so precisely because of Kalu’s misrepresentations.
The district court’s judgment was affirmed.