USA v. Jiten Nanda

Filing

PUBLISHED OPINION FILED. [16-11135 Affirmed] Judge: CES, Judge: EHJ, Judge: EBC. Mandate pull date is 08/31/2017 for Appellants Atul Nanda and Jiten Jay Nanda [16-11135]

Case: 16-11135

Document: 00514111525

Page: 1

Date Filed: 08/10/2017

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 16-11135

United States Court of Appeals
Fifth Circuit

FILED
August 10, 2017

UNITED STATES OF AMERICA,

Lyle W. Cayce
Clerk

Plaintiff - Appellee
v.
JITEN JAY NANDA; ATUL NANDA,
Defendants - Appellants

Appeals from the United States District Court
for the Northern District of Texas
Before STEWART, Chief Judge, and JONES and CLEMENT, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
Two brothers, Atul and Jiten “Jay” Nanda (together, “the Nandas”), were
indicted, tried jointly by jury, and convicted of various charges stemming from
a conspiracy to fraudulently procure H-1B visas. The Nandas jointly appeal
their convictions and sentences, raising a number of issues. Because we
conclude that the Nandas have not established any reversible error, we
AFFIRM their respective convictions and sentences.
I
The Nandas owned and operated Dibon Solutions (“Dibon”), an
information technology consulting company based in Texas. Dibon was
essentially a staffing company that recruited primarily Indian nationals with

Case: 16-11135

Document: 00514111525

Page: 2

Date Filed: 08/10/2017

No. 16-11135
computer expertise to come to the United States and work for Dibon to fulfill
the computer needs of Dibon’s clients. Dibon employed about 200 consultants,
most of whom were in the United States on H-1B visas.
The H-1B visa program is designed to allow businesses in the United
States to temporarily employ foreign workers with specialized expertise on
American soil in order to fulfill specific needs of the employer. To obtain an H1B visa, an employer must first obtain approval from the U.S. Department of
Labor (“DoL”) by filing a Labor Condition Application (“LCA”). The LCA
requires an employer to represent that it intends to employ a particular foreign
worker for a specific position for a given period of time. The employer must also
state the rate of pay, the work location, and whether the given position is fulltime. The employer further promises to pay all fees arising out of the visa
application process, and to pay workers for any non-productive time once they
have procured a visa. After approval from the DoL, the employer must then
file a Petition for a Nonimmigrant Worker (“I-129”) with U.S. Citizenship and
Immigration Services (“CIS”). The I-129 requires much of the same
information as the LCA, as well as further biographical information regarding
the specific prospective visa applicant.
After CIS approves the petition, the worker can apply for an H-1B visa
at a U.S. consulate or embassy in her home country. Once she obtains the visa,
the worker possesses lawful nonimmigrant status and may reside in the
United States and work for the sponsoring employer until either the visa
expires or her employment with the sponsoring employer is terminated. The
employer is required to begin paying the visa holder once she enters into
employment or within 30 days of her admission to the United States,
whichever is sooner. If the worker’s employment is terminated before her visa
expires, the employer must notify CIS and pay for her return to her home
country.
2

Case: 16-11135

Document: 00514111525

Page: 3

Date Filed: 08/10/2017

No. 16-11135
The representations that the sponsoring employer makes on the LCA
and I-129—that it already has a specific open position for the visa applicant,
that it will pay all visa fees, that it will pay the employee within 30 days of
admission to the U.S. regardless of employment, etc.—are designed in part to
prevent employers from fraudulently taking advantage of the H-1B system by
engaging in a scheme called “benching.” Benching occurs when an
unscrupulous employer uses H-1B visas to recruit foreign workers not to fill a
specific position at the company itself, but rather to create a pool of relatively
inexpensive skilled labor that can then be used on an as-needed basis to fulfill
the needs of third-party clients. When the visa holder is not working—i.e. “on
the bench”—the employer requires her to pay her own way in contravention of
the express visa requirements. The employer is thus able to procure skilled
labor on the cheap with little overhead, but takes a cut of the standard rates
its visa-holding employees bill out to third-party clients.
The Nandas’ fraudulent scheme was a quintessential case of benching.
Dibon regularly sponsored H-1B applicants and represented to the DoL and
CIS that the applicants would work directly for Dibon at its headquarters in
Carrollton, Texas. Dibon further represented that it would pay all visa fees and
pay the applicants for all non-productive time 30 days after their arrival.
Contrary to those representations, however, Dibon in fact benched the workers
and required them to pay their own way until they could be placed at a thirdparty client to provide technology consulting services—with Dibon taking a cut
of any money earned. The fraudulent scheme, which continued from 2005—
2011, netted Dibon at least hundreds of thousands of dollars.
In 2014, the Nandas and others were indicted on charges stemming from
their benching scheme. Several Dibon employees pleaded guilty and
cooperated with the Government’s prosecution of the Nandas. The Nandas
were tried by jury and found guilty of: one count of conspiracy to commit visa
3

Case: 16-11135

Document: 00514111525

Page: 4

Date Filed: 08/10/2017

No. 16-11135
fraud in violation 18 U.S.C. § 371 and 18 U.S.C. § 1546 (a); one count of
conspiracy to harbor illegal aliens in violation of 8 U.S.C. §§ 1324(a)(1)(A)(v)(I)
and 1324(a)(1)(B)(i); and two counts of wire fraud in violation of 18
U.S.C. § 1343 and 18 U.S.C. § 2. The district court sentenced each brother to
87 months’ imprisonment, three years of supervised release, and restitution.
II
The Nandas raise myriad issues on appeal, challenging aspects of the
trial’s procedure and substance as well as their respective sentences. We
address each issue in turn.
A. Bruton Challenge
During the Nandas’ trial, the Government entered into evidence a letter
Jay wrote to the DoL after he had left Dibon. In the letter, Jay confessed that
“Dibon has submitted incomplete and false documentation . . . [and] continues
to violate all the wage and hour conditions of the H-1B visa program including
benching, no pay, LCAs, taking monies for visa[s] and running payroll for H1B immigrants.” Jay further wrote that Dibon had “not paid back wages to the
tune of millions to non immigrant H-1B workers.”
Atul’s counsel vigorously objected to the letter’s entry into evidence,
arguing that its admission would violate Atul’s Sixth Amendment right of
confrontation under Bruton v. United States, 391 U.S. 123 (1968). In Bruton,
the Supreme Court held that admission of a codefendant’s confession at a joint
trial where that codefendant does not take the stand violates the other
defendant’s Sixth Amendment right of confrontation. Id. at 127–28. The Court
later qualified Bruton’s scope in Richardson v. Marsh, 481 U.S. 200 (1987).
Richardson explained that Bruton created a “narrow exception,” and held that
admission of a confession did not violate the Sixth Amendment where “the
confession was not incriminating on its face, and became so only when linked
with evidence introduced later at trial.” Id. at 207, 208. The Court further
4

Case: 16-11135

Document: 00514111525

Page: 5

Date Filed: 08/10/2017

No. 16-11135
explained that, where the codefendant’s confession does not directly reference
the defendant, a limiting instruction to the jury will further help mitigate
against any confrontation issues. See id. at 208; see also United States v. Jobe,
101 F.3d 1046, 1067 (5th Cir. 1996) (“[T]he admission of a nontestifying
defendant’s confession is permissible if the trial court gives a proper limiting
instruction.”). Thus, under Richardson, “an indirect reference to a co-defendant
is not enough to bring a statement within the proscription of Bruton.” United
States v. Restrepo, 994 F.2d 173, 187 (5th Cir. 1993). “Bruton is not violated
unless [the codefendant’s] statement directly alludes to [the defendant] . . . .”
Id. at 186; see also United States v. Webster, 734 F.2d 1048, 1054 n.6 (5th Cir.
1984) (“[T]his Court has held consistently that the Bruton rule is not violated
unless a co-defendant’s statement directly alludes to the complaining
defendant. . . . This is true, even if the evidence makes it apparent that the
defendant was implicated by some indirect references.”).
The district court conducted an extensive hearing on the letter’s
admissibility. It ultimately concluded that, because the reference to “Dibon” in
the letter could have referred to a number of different Dibon employees and
not to Atul specifically, a limiting instruction would be satisfactory to avoid
any Sixth Amendment concerns. Accordingly, the district court admitted the
letter and expressly instructed the jury three times not to consider any of its
contents in regard to Atul. There is no allegation that the Government
attempted to use the letter against Atul at any point during the trial.
Because Atul preserved his Bruton objection below, we review the
admission of the letter for abuse of discretion, subject also to harmless error
analysis. See United States v. Powell, 732 F.3d 361, 376 (5th Cir. 2013); United
States v. Walker, 148 F.3d 518, 522 (5th Cir. 1998), abrogated on other grounds
by Texas v. Cobb, 532 U.S. 162 (2001).
5

Case: 16-11135

Document: 00514111525

Page: 6

Date Filed: 08/10/2017

No. 16-11135
We agree with the district court: the letter did not “directly allude” to
Atul, and so admitting it did not violate his Sixth Amendment right of
confrontation. Restrepo, 994 F.2d at 187. Atul contends that the reference to
“Dibon” was in effect a direct allusion to him personally, because the
Government repeatedly stressed that Jay and Atul were the central figures in
Dibon’s operation. But there were a number of other Dibon employees involved
in the benching scheme; “Dibon” in the letter could have referred to any of
them. Atul’s argument would require us to “link” the letter “with evidence
introduced later at trial”—precisely what the Supreme Court instructed not to
do in Richardson. Richardson, 481 U.S. at 208. Accordingly, admitting the
letter did not violate Atul’s rights.
We note further that, even were we to conclude that admitting the letter
was error, such error would be harmless. The other evidence against Atul
presented at trial was overwhelming, and included testimony from multiple
Dibon employees directly implicating Atul in the benching scheme. “It is well
established that a Bruton error may be considered harmless when,
disregarding the co-defendant’s confession, there is otherwise ample evidence
against a defendant.” Powell, 732 F.3d at 379. That is true here.
B. Wire Fraud Charge
The Nandas contend that the superseding indictment did not properly
charge that a specific fraudulent wire communication was undertaken for the
purpose of executing a scheme to obtain property or money. Instead, they
argue, the wire fraud counts charged only that they schemed to make
misrepresentations to the Government in order to fraudulently obtain H-1B
visas. Relying on Cleveland v. United States, 531 U.S. 12 (2000), the Nandas
maintain that visas are not “property” or “money” within the meaning of the
wire fraud statute.
6

Case: 16-11135

Document: 00514111525

Page: 7

Date Filed: 08/10/2017

No. 16-11135
The Nandas attempt to cast this argument as a sufficiency of the
evidence challenge, but it is not. It is rather a legal argument about the proper
interpretation and application of the wire fraud statute. As such, because the
Nandas failed to raise this contention below, it is reviewed for plain error on
appeal. See United States v. Walker, 596 F. App’x 302, 310–11 (5th Cir. 2015)
(holding that statutory arguments raised for the first time on appeal, though
presented as sufficiency of the evidence arguments, were not preserved by
motion for acquittal in the trial court); United States v. Kelley, 481 F. App’x
111, 113 (5th Cir. 2012) (holding that legal argument raised for the first time
on appeal, though “couched in terms of sufficiency,” should be reviewed for
plain error).
It is far from clear that there was any error in the wire fraud charges, let
alone plain error. The wire fraud counts explicitly charged the Nandas with
“executing the foregoing scheme and artifice to defraud, and to obtain money,
by means of false pretenses, [etc.].” The Nandas argue that this express charge
was still ambiguous, because it did not clarify the source of the money—
whether from the visa applicants themselves or by capitalizing on the
fraudulent visas in another manner. But the concession that the charging
language is at the very least ambiguous is tantamount to an admission that
any supposed error was not plain. And that concession is fatal at the second
prong of plain error review. See Puckett v. United States, 556 U.S. 129, 135
(2009) (explaining that, on plain error review, “the legal error must be clear or
obvious, rather than subject to reasonable dispute”). Accordingly, the Nandas’
argument as to the wire fraud charges fails.
C. Special Unanimity Instruction
The Nandas argue that the district court erred by not giving the jury
special instructions to the effect that unanimity was required as to the specific
overt acts supporting a finding of guilty on the various charges. The Nandas
7

Case: 16-11135

Document: 00514111525

Page: 8

Date Filed: 08/10/2017

No. 16-11135
concede that they did not move for a special instruction or otherwise raise the
issue below, so this contention is reviewed for plain error. See United States v.
Razo-Leora, 961 F.2d 1140, 1147 (5th Cir. 1992) (“We review a failure to give
a special instruction on unanimity only under the narrow ‘plain error’
standard.”).
The district court did not err in its unanimity instruction. The jury
charge included the instructions that “all of you must agree” and “[y]our verdict
must be unanimous on each count of the Superseding Indictment.” We have
held that “a general unanimity instruction is ordinarily sufficient” in
conspiracy cases. United States v. Mason, 736 F.3d 682, 84 (5th Cir. 2013). The
district court did not err by not sua sponte giving the jury a specialized
unanimity

instruction

beyond

the

“ordinarily

sufficient”

unanimity

instructions it did properly give.
As for the wire fraud counts, the Nandas contend that the district court
should have instructed the jury that it had to be unanimous as to the specific
false statements in each particular wire charged in the superseding
indictment. This argument reflects a misunderstanding of the law. It is not a
particular false statement within a wire, but rather each particular wire that
contained a false statement, that constitutes an individual offense for purposes
of the wire fraud statute. Cf. United States v. McClelland, 868 F.2d 704, 706
(5th Cir. 1989) (explaining, in the analogous context of mail fraud, that “[e]ach
separate use of the mails to further a scheme to defraud is a separate offense”).
As such, there is no need to instruct a jury that it needs to be unanimous as to
a particular false statement within a given wire. See United States v. LaPlante,
714 F.3d 641, 647 (1st Cir. 2013) (“[T]he jury is not required to agree on the
means—the specific false statement—[Defendant] used to carry out her
fraudulent scheme.”).
8

Case: 16-11135

Document: 00514111525

Page: 9

Date Filed: 08/10/2017

No. 16-11135
D. Constructive Amendment of the Superseding Indictment
The Nandas argue that the Government’s evidence at trial constructively
amended the Superseding Indictment in violation of their Fifth Amendment
right to a grand jury indictment. See United States v. Griffin, 800 F.3d 198,
202 (5th Cir. 2015) (“[A]fter an indictment has been returned its charges may
not be broadened through amendment except by the grand jury itself.”)
(quoting Stirone v. United States, 361 U.S. 212, 215–16 (1960)). They contend
the Government constructively amended the Superseding Indictment by: (1)
introducing evidence of many visa petitions containing false statements, most
of which did not relate to persons named in the Superseding Indictment; and
(2) introducing evidence that the H-1B applications were falsified because the
Nandas did not pay for medical insurance during times when the workers were
not working.
“[A] constructive amendment occurs when the court ‘permits the
defendant to be convicted upon a factual basis that effectively modifies an
essential element of the offense charged’ or upon ‘a materially different theory
or set of facts than that which [the defendant] was charged.” United States v.
Chaker, 820 F.3d 204, 210 (5th Cir. 2016) (quoting United States v. McMillan,
600 F.3d 434, 451 (5th Cir. 2010) (alteration in original)). Because the Nandas
did not preserve the constructive amendment argument below, it is reviewed
for plain error.
We are not convinced that admitting the additional visa petitions and
medical insurance evidence was error. But we need not reach that issue
because, even granting arguendo that it was, the Nandas cannot establish that
it affected their substantial rights. We have previously found that a
constructive amendment does not affect defendants’ substantial rights under
plain error review where “[i]t is improbable that the jury would have concluded
that [the defendants] were innocent if only the evidence of which the
9

Case: 16-11135

Document: 00514111525

Page: 10

Date Filed: 08/10/2017

No. 16-11135
defendants now complain had been excluded.” United States v. Bohuchot, 625
F.3d 892, 900 (5th Cir. 2010). Here, even if the challenged evidence were
stripped away, the remaining evidence was still more than enough to convict
the Nandas. For example, four different former Dibon employees—all of whom
were

expressly

extensively

referenced

regarding

the

in

the

Nandas’

Superseding
benching

Indictment—testified
scheme

and

various

misrepresentations made to them and in their visa documents. Thus, because
it is “improbable” that the jury would have acquitted the Nandas absent the
challenged evidence, their argument fails at the third prong of plain error
review. See Puckett, 556 U.S. at 135 (“Third, the error must have affected the
appellant’s substantial rights, which in the ordinary case means he must
demonstrate that it affected the outcome of the district court proceedings.”)
(internal quotation marks omitted).
E. Sentencing Enhancement
The Presentence Investigation Report (“PSR”) recommended a two point
sentencing enhancement pursuant to U.S.S.G. §§ 2B1.1(b)(10)(B) and (C) for
committing a substantial portion of the alleged scheme from outside the United
States and for committing an offense involving sophisticated means of
concealment. The Nandas objected to the enhancement, arguing that there was
not sufficient evidence to show that a substantial portion of the fraud occurred
from outside the United States. The district court overruled the objection.
The parties dispute at length the proper interpretation of the phrase
“from outside the United States.” The Nandas argue that the word “from”
indicates that a substantial portion of the fraud itself must take place outside
the U.S. The Government, by contrast, argues that the enhancement “doesn’t
require that the fraud be committed from outside the United States.” For our

10

Case: 16-11135

Document: 00514111525

Page: 11

Date Filed: 08/10/2017

No. 16-11135
part, we have not yet had opportunity to address this particular sentencing
enhancement as applied to conspiracy charges, nor need we now. 1
We “may affirm the district court’s judgment on any basis supported by
the record.” United States v. Chacon, 742 F.3d 219, 220 (5th Cir. 2014). Here,
the PSR expressly included the sophisticated means prong as an alternate
ground for applying the sentencing enhancement. Indeed, the Nandas objected
to that portion of the PSR directly, and the probation officer’s response in the
Addendum to the PSR makes clear the ample record evidence supporting a
finding that they used sophisticated means to conceal their fraud. The
probation officer explained that, “the fraud schemes committed by the
defendant[s] were sophisticated and involved detailed information being
submitted to various Governmental agencies that had to match each other to
obtain the fraudulent visas.” The Nandas “also set up a ‘training center’ that
was used to launder the visa processing fees paid for by the victims.” Finally,
the Nandas “maintained apartments for the victims to live in while they were
benched.” This evidence is more than enough to support a finding that the
Nandas used sophisticated means to conceal their fraud. The district court
adopted these findings and conclusions. Thus, the record supports application
of the enhancement for the use of sophisticated means of concealment.
F. Loss Amount Calculation
The district court concluded that the actual loss from the Nandas’ fraud
was $600,000. Because that number was greater than $550,000, the Nandas’
base offense level under the sentencing guidelines was 29; had the number
been less than $550,000 their base offense level would have been 27. The

We did address the enhancement in United States v. Lawal, 235 F. App’x 320, 321
(5th Cir. 2007), but that short unpublished opinion did not pertain to conspiracy.
1

11

Case: 16-11135

Document: 00514111525

Page: 12

Date Filed: 08/10/2017

No. 16-11135
Nandas contend that the district court erred in its calculation; the Government
argues that the $600,000 number was easily supported by the record evidence.
We need not delve too deeply into the precise methodology the district
court used to reach that number, however, because any possible error in the
loss calculation was certainly harmless. This is so because the district court
repeatedly and explicitly explained that it would have imposed the same
sentence regardless of whether the loss amount was more or less than the key
$550,000 threshold. The district court noted, for example, “that the sentence
that the Court imposed would be the sentence that the Court would impose,
even if I sustained your objection that I have overruled and reduced the loss
amount two further levels. I would have been imposing the same sentence I
just did.” We have repeatedly held that, when a district court entertains
arguments as to the proper guidelines range and explicitly states that it would
have given the same sentence it did regardless, any error in the range
calculation is harmless. See, e.g., United States v. Richardson, 676 F.3d 491,
511 (5th Cir. 2012) (citing United States v. Duhon, 541 F.3d 391, 396 (5th Cir.
2008); United States v. Bonilla, 524 F.3d 647, 656 (5th Cir. 2008)) (“[A]
guidelines calculation error is harmless where the district court has considered
the correct guidelines range and has stated that it would impose the same
sentence even if that range applied.”). Because the district court explicitly
considered both guidelines ranges—i.e. with and without the additional two
points for a loss amount over $550,000—and expressly stated it would give the
same sentence either way, any error in the loss amount calculation was
harmless.
G. Sentencing Disparity
The Nandas argue that the district court did not properly consider
sentencing disparity—one of the factors outlined in 18 U.S.C. § 3553(a)—when
it sentenced both brothers. This argument borders on the frivolous. The district
12

Case: 16-11135

Document: 00514111525

Page: 13

Date Filed: 08/10/2017

No. 16-11135
court heard a full-throated argument from defense counsel regarding
sentencing disparity, and then indicated that it did not need to hear the
Government’s rebuttal argument. The obvious implication of this interchange
was that the district court did consider the issue of sentencing disparity, but
found the Nandas’ contentions unavailing.
III
The Nandas’ convictions and sentences are AFFIRMED.

13