United States v. Kalu
2015 U.S. App. LEXIS 11145
| 10th Cir. | 2015Background
- Kizzy Kalu recruited foreign nurses (primarily from the Philippines), arranged H-1B visa petitions listing them as Adam University (AU) nurse instructors/supervisors, but placed them to work as ordinary nurses in Colorado nursing homes and pocketed a portion of wages.
- Visa petitions falsely represented employer, job duties, and $72,000 annual salaries; Kalu did not notify DHS when AU ceased meaningful operations and instructed nurses to hide separate employment contracts from consular officers.
- Kalu charged fees to procure visas, threatened nurses with visa revocation, deportation, or $25,000 penalties if they refused his demands, and retained wage differentials (homes paid FHPG $35/hr; nurses got $20/hr).
- Federal grand jury returned a 95-count superseding indictment alleging mail fraud, encouraging/inducing aliens in violation of 8 U.S.C. § 1324, visa fraud, forced labor (18 U.S.C. § 1589), trafficking in forced labor, and money laundering; jury convicted Kalu on 89 counts.
- District court sentenced Kalu to concurrent terms (130 and 120 months), ordered forfeiture of $475,592.94, and restitution of $3,790,338.55; Kalu appealed jury instructions and restitution award.
- Tenth Circuit affirmed: found some jury-instruction errors but not plain-error reversible, and upheld the restitution calculation as a reasonable estimate of victims’ loss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mail fraud mens rea: whether specific intent to defraud is an essential element of 18 U.S.C. § 1341 | Kalu: jury should have been instructed that specific intent to defraud is required | Government: statute has overlapping phrases; instruction as given was sufficient | Court: intent to defraud is an element; omission was error and plain, but harmless under plain-error review given overwhelming evidence of intent; convictions affirmed |
| Constructive amendment via mail-fraud instruction | Kalu: indictment charged "devised or intended to devise" scheme; instruction allowed conviction for mere participation, thus amending indictment | Government: Tenth Circuit precedent permits conviction for participation if intent present; indictment and instruction put defendant on notice | Court: no constructive amendment—participation with intent falls within charged scheme; no reversible error |
| Mens rea for 8 U.S.C. § 1324(a)(1)(A)(iv): knowledge or reckless disregard vs negligence ("should have known") | Kalu: jury was instructed using negligence standard ("should have known"), lowering required mens rea | Government: argued awareness/willfulness sufficed; instruction not plainly erroneous | Court: statute requires knowledge or reckless disregard; use of negligence standard was plain error but harmless because record demonstrated actual knowledge; conviction affirmed |
| Forced labor: definition of "serious harm"—whether instruction improperly used "cause" instead of "compel" | Kalu: instruction defined "serious harm" as harm that would "cause" a reasonable person to perform labor, which is broader than statutory "compel" and lowers burden | Government: overall instructions required involuntariness and consideration of surrounding circumstances; no prejudice | Court: no plain error—no authority showing "cause" vs "compel" difference renders instruction erroneous; jury properly instructed as a whole |
| Restitution amount under MVRA ($3,790,338.55) | Kalu: restitution improperly based on $72,000 AU job offers and assumed full three-year employment; speculative and inconsistent with other salary representations | Government: visa petitions promising $72,000 are objective bases for victims’ lost-earnings expectations; district court subtracted actual earnings and reasonably estimated losses | Court: restitution review showed discretion was properly exercised; estimate rooted in loss caused by false representations was reasonable and not speculative; award affirmed |
Key Cases Cited
- Loughrin v. United States, 573 U.S. 351 (2014) (mail-fraud statute construed as describing a single offense—use of the mails to advance a scheme to defraud)
- Cleveland v. United States, 531 U.S. 12 (2000) (limits on reading §1341 as creating two independent offenses; construes scope of mail-fraud language)
- McNally v. United States, 483 U.S. 350 (1987) (historical limitation on mail/wire fraud scope emphasized in later Supreme Court decisions)
- United States v. Welch, 327 F.3d 1081 (10th Cir. 2003) (elements of mail fraud include scheme, specific intent to defraud, and use of mails)
- United States v. Barajas-Chavez, 162 F.3d 1285 (10th Cir. 1998) (§1324 requires knowledge or reckless disregard of alien’s unlawful status)
- United States v. Prows, 118 F.3d 686 (10th Cir. 1997) (defendant may be convicted under mail-fraud statute as a participant in another’s scheme if intent to defraud is shown)