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State v Arua [1995] PGNC 14; N1315 (30 March 1995)

Unreported National Court Decisions

N1315

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]

CR NO 223 OF 1993
THE STATE
v
AKO ARUA

Waigani

Brown J
16-17 March 1995
21-23 March 1995
30 March 1995

CRIMINAL LAW - Sentence - Dishonesty offence by loans officer in a position of trust - Appropriate tariff following long trial - No appreciation by offender of the criminality of the offence - no remorse - Application of guidelines in Wellington Balawa.

Cases Cited:

Wellington Balawa v The State [1988-89] PNGLR 496

The facts appear from the judgment.

Counsel:

Mr Kaluwin for the State

Mr R Vaea for the Accused

REASONS ON SENTENCE

30 March 1995

BROWN J: Ako Arua was convicted after a trial lasting 5 days of one count of conspiracy to defraud and one count of misappropriating K3,800, money belonging to the Savings and Loan Society. I was satisfied that he concocted a plot with the co-conspirator John Ovia, to prepare and lodge false loan application documents in the name of a genuine member, who could not reasonably have known of the fraud for he was teaching and living at a distance from Port Moresby and secondly, the Society did not send statements of account to members, as a matter of course so that the likelihood of detection was slight. The applications, which breached the guidelines in a number of material aspects, were initially processed by Ako Arua, who was then a loans officers with the Society. He would then recommend their approval by the Branch manager, and the Board would, it seems, rely on the fact of the previous approvals, to “rubber stamp” the applications, whereupon cheques would be drawn in favour of the member or a particular institution for the benefit of the “member”. Ako Arua would then collect the cheques on the “member’s” behalf, before facilitating their encashment by “identifying” the “member” for the benefit of the bank or business chosen to that purpose.

This practice worked over a period of some 2 years involving ten false loan applications, by which time, K3800 was taken.

The fraud eventually ended when another staff member of the Society recognised the “member” with Ako Arua as John Ovia, while John was in the offices of the Society pretending to be the “member” for the purposes of another fraudulent loan application.

The amount of K3800 has been taken over a period of 2 years from early December 1989 to August 1992. He has been awaiting trial since August 1992 when the investigation recommend referral to the fraud section of the police. John Ovia a co-conspirator, was sentenced 27/28 January 1994 - (plea on 9 counts of forging and uttering false loan applications and 1 count of misappropriation) to a total period in prison of 3 years, but 12 months suspended if K3300 repaid in full. This was done.

Ako Arua was in a position of trust and influence as a loans officer with the Society. Despite the failure to comply with the procedural conditions for loan applications, (no pay slip, no documentation to support application, no real identification, multiple loans within minimum period) he was able to influence the Society Branch Manager to recommend approval. This course of action was pursued for 2 years until the co-conspirator John Ovia was recognised by another officer. Consequently Ako Arua is deserving of greater censure, for he persistently defrauded the Society, his employer.

As I say this fraud was perpetrated over a 2 year period and may have remained undetected because of Ako Arua's practice of not having the “member” collect the cheques and avoiding where possible, the chance of recognition of the co-conspirator, John Ovia.

The money appears to have been used for personal effects, K10 to K20 here and there and on one occasion K400 for parts for a motor vehicle. Presumably the parts were purchased from Ela Motors.

THE EFFECT UPON THE VICTIM

The society will need to tighten up its checks on such loan approvals. Since a member’s statement of account is not sent as a matter of course, this type of offence may go undetected for a period of time, until some other cause brings it into the open. If a member received a statement of account, then he would quickly see if any unauthorised dealings had taken place on his account.

Public confidence in a Savings Society must be undermined if staff steal in this fashion. It means members are reluctant to put their money with the society for fear it will be stolen, so the Society cannot carry out its function as it might.

A strong warning must be sent to fellow employees that this type of offence will not be condoned.

Conviction and sentence for this offence of dishonesty will not have a lasting effect on the prisoner if he is not sent to jail. He has expressed no remorse, so his attitude towards his behaviour leaves me in doubt as to whether he recognises the criminal nature of his actions and if his attitude will alter for the better, whatever sentence I impose.

HIS HISTORY

He is a married man aged 27, 22 at commencement of offence. He had been with the Society upwards of 2 years and had not long been in a position of influence before he abused his trust. His family of wife and young child in a settled community however, weights heavily against a jail sentence but must be balanced with the serious matter of his breach of trust and the effect on his fellow employees.

RESTITUTION

He offers restitution in the balance of the moneys misappropriated in the sum of K500.00. I am satisfied that K3,300.00 has been repaid so that an order for restitution is appropriate.

SPECIAL CIRCUMSTANCES

I would not expect him to have had prior convictions. Offences of dishonesty, if caught, seldom follow other types of criminal activity. As I say he is from a respected community and his shame must attach to his family, relatives, and the community. Offences of dishonesty unfortunately are becoming increasingly common amongst clerks in positions of trust. A jail sentence is called for, but just as importantly it must be brought home to these offenders that, where money is involved, they should also suffer a monetary penalty. I am satisfied that in a settled community in the National Capital District, where money is the currency, a fine would be appropriate. I say this having regard to the extent of crimes of violence in the National Capital District and the consequent jailing of large numbers of violent offenders in prison. In this case, having regard to his age and his family background I consider his chances of re-offending are slight, provided he is not placed in a position of trust with access to money. Jailing would serve no useful purpose but put the State to even greater inconvenience.

I note that his co-offender has been sentenced to jail, and while this weights heavily against a non custodial sentence, I have decided to rely on a fine as an appropriate punishment. There should normally be no disparity of sentences where co-offenders are equally in the wrong. In this case the employee, Ako Arua is, in my view more greatly to blame for facilitating this offence, but nevertheless, having regard to the preponderance of violent offenders in jail, this man’s non violent background and the time that it has taken to bring the case for trial whilst he has been on bail, I consider it would be unfair were he now to be sent to jail although he will be sentenced in the first instance. I have listened to Mr Kaluwin and propose to punish the prisoner as follows:

1. In respect of the 1st Count of conspiracy to defraud you are sentenced to imprisonment for a term of 2 years or until a fine of K1500 is paid and in addition to the further punishment;

2. In respect of the 2nd Count of misappropriating K3800, you are sentenced to a period of imprisonment for a period of 2 year to be served concurrently with the sentence on Count 1; you shall be released upon payment of the fine and reimbursement.

You shall reimburse the Teachers Savings and Loan Society Limited the amount of K500.00 being the balance owing of moneys the subject of the 2nd Count, before your release, otherwise you shall serve the whole of your term.

You shall remain under sentence of imprisonment until the OIC Bomana is satisfied both the fine and reimbursement has been paid.

Lawyer for the State:

Lawyer for the Accused: Ray Vaea & Associates