N6214
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) 256 OF 2015

THE STATE

V

DAVID POHOLI

Waigani: Salika, DCJ
2015: 9, 11 & 16 November
2016: 2 March

CRIMINAL LAW – Practice and Procedure – Sections 407(1) (b) and 383A (1) & (2) of Criminal Code – Conspiracy to defraud – Misappropriation – Section 7 of the Criminal Code applied.

Cases Cited:

Goli Golu v The State (1979) PNGLR 653
The State v Iori Veraga (2005) N2849
The State v Neville Mina (2013) N5102
The State v Paroa Kaia (1995) N1401
Ure Hane v The State (1984) PNGLR 105
Counsel:

Ms R Koralyo, for the State
Mr J Mesa, for the Accused

SENTENCE
2nd March, 2016

1. SALIKA DCJ: INTRODUCTION: The prisoner was convicted on one charge of conspiracy to defraud the Bank South Pacific (BSP) pursuant to s407 (1) (b) of the Criminal Code and one count of misappropriation under Section 383A (1) and (2) of the Criminal Code. 

2. The brief facts were that between January 2013 and June 2014, the prisoner was employed by BSP as a Human Resource Benefits and Remuneration officer based at the Boroko Branch. The prisoner conspired with a more senior officer Michael Kou to cash unauthorised BSP Debit Vouchers on the pretext of making payments for expatriate BSP staff. These fraudulent vouchers were transacted at the BSP Boroko Branch. In total 134 transactions were made for a total of K688, 000.00 which was stolen and misappropriated by the prisoner and Michael Kou. The prisoner was arrested on 25 June 2014.

ISSUE

3. Having convicted the prisoner the Court is left with the issue of what sentence to impose on the prisoner.

THE LAW

4. The penalty provisions of Section 407 and Section 383A (1) provides:-

Section 407(1):

(1)	A person who conspires with another person –

(a)	By deceit or any fraudulent means to affect the market price of anything publicly sold; or

(b)	To defraud the public, or any person (whether or not a particular person); or

(c)	To extort property from any person,

is guilty of a crime

Penalty: Imprisonment for a term not exceeding seven years.

Section 383A (1):-

(1)	A person who dishonestly applies to his own use or to the use of another person –

(a)	property belonging to another; or

(b)	property belonging to him, which is in his possession or control (either solely or conjointly with another person) subject to a trust, direction or condition or on account of any other person,

is guilty of the crime of misappropriation of property.

(2)	An offender guilty of the crime of misappropriation of property is liable to imprisonment for five years except in any of the following cases when he is liable to imprisonment for ten years –

(a)	where the offender is a director of a company and the property dishonestly applied is company property;

(b)	where the offender is an employee and the property dishonestly applied is the property of his employer;

(c)	where the property dishonestly applied was subject to a trust, direction or condition;

(d)	where the property dishonestly applied is of a value of K2,000 or upwards.

As the prisoner's matter comes under (2) (b) and (d) above he would be liable to be imprisoned to a term of 10 years.

5. The Court must however consider whether it is appropriate to impose the maximum prison terms. The law is that the maximum terms are reserved for the worst type of cases in a given category of offences. (See Goli Golu v The State (1979) PNGLR 653, Ure Hane v The State (1984) PNGLR 105).

COMPARATIVE CASES

6. Counsel has usefully referred to the following comparative cases to assist the Court come to an appropriate sentence.

The State v Paroa Kaia (1995) N1401

The prisoner in that case was employed by ANZ Bank as a teller. He conspired with others and transferred funds from other accounts to his own and to the account of those he conspired with. He pleaded guilty to the charge and was sentenced to 4 years imprisonment.

The State v Neville Mina (2013) N5102

The prisoner in this matter was an input clerk with the Bank South Pacific (BSP). He stole K100, 000.00 from the bank. K72, 000.00 was recovered while K28, 000.00 was not. He was sentenced to 4 years imprisonment. 

The State v Iori Veraga (2005) N2849

The prisoner was charged with 2 counts of conspiracy and 2 counts of misappropriation. The prisoner played a secondary role to that of his co-conspirators. The crime was well planned and orchestrated. Prisoner was found guilty of the charges and sentenced to 6 years imprisonment. 

THE BELAWA CONSIDERATIONS

7. The Belawa considerations are useful in assisting the Court to come to an appropriate sentence. They are:

(i)	The quality and degree of trust reposed in the offender including his rank. 

The prisoner was entrusted by his employer to first of all employ him in the bank where money and monetary matters are dealt with. Money passes over the hands of bank employees every working day. As such bank employees must be trusted in dealing with a lot of money on a daily basis. A great degree of trust is reposed in him and he betrayed that trust. 

(ii)	Amount of money involved.

The amount stolen from the bank was K688, 000.00. The prisoner himself cashed K90, 000.00.

(iii)	The period in which the fraud was perpetrated.
The scheme of fraudulent activities took place over a period of 3 years with 134 different transactions. This was a well planned and well organised scheme over such a long time. 

(iv)	The use to which the money was put to.
There is no evidence as to how the money stolen was used. A lot of the money was given to Michael Kou and the prisoner was bought lunch or given lunch money.

(v)	Effect on the victim
The bank is poorer by K688, 000.00 with no chance of getting any of it back.

(vi)	Effect on the victim.
The prisoner regrets what he did and now says he should not have gotten himself to commit the crime. He has lost his job as a result of the dishonesty.

(vii)	The frequency and prevalence of the dishonesty offences.
Dishonesty offences have increased for the years. The mode of committing those dishonesty offences have varied from simple to very complicated ways. The scheme in this case was rather simple. The visa applications for expatriate officers working in the bank was the main reason for raising the debit notes so that cash could be obtained and they got away with that scheme for 3 years before they were caught.

BELAWA FORMULA

8. The Supreme Court in the Belawa case suggested the following sentence formula in terms of the amount of money involved:

(i)	K100 and K1,000 – no jail terms
(ii)	K1,000 and K10,000 – 1 – 2 years was appropriate
(iii)	K10,000 and K40,000 – 2 – 3 years was appropriate 
(iv)	K40, 000 and K150, 000 – 3 – 5 years imprisonment.

The Supreme Court did not complete the scale with the next lot of money and the sentence to impose to take into account Section 383A (2). There is no set formula in the process observed here. The amount stolen here was K688, 000.00. This would bring the prisoner in this case to be about 7 to 8 years using the Belawa formula. This in my view ties the Court to a sentence that might be crushing on the prisoner.

9. Section 19 of the Criminal Code gives the Court a wide discretion to impose a sentence that it feels warranted. I will therefore use Section 19 of the Criminal Code to impose a sentence I feel should be imposed on the prisoner.

MITIGATING FACTORS

10. The prisoner is a first time offender and he cooperated with the police.

AGGRAVATING FACTORS

11. The prisoner as a bank employee who breached the trust reposed in him. He brought disrepute to the bank and its customers by this practice of being dishonest. The amount of money he stole is a large amount and he has no way of restitution.

SENTENCE

12. Taking into account the mitigating factors and the aggravating factors I sentence the prisoner to 3 years imprisonment on the charge of conspiracy to defraud the bank. 

In relation to the charge of misappropriation, I impose a term of imprisonment of 5 years in hard labour. Both sentences are to be served concurrently.

As a matter of general concern the police force must now go after Michael Kou and have him arrested to face the law as well. David Poholi should not have to bear this alone.
________________________________________________________________
Public Prosecutor: Lawyer for the State
Public Solicitor: Lawyer for the Defence