N9517

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) NOS 153, 154, 155, 156, 157, 158, 1086, 1087,
1088, 1089, 1090, 1091, 1092, 1093, 1094 & 1095 OF 2018

THE STATE

V

REINERT WAIRA, PATRICIA MASO,
MICHAEL YAKIP & WILLIAM SHAL

Madang: Berrigan, J
2019: 16th, 17th, 18th, 21st, 22nd, 23rd, 24th & 25th October
2020: 11th, 12th, 18th & 21st February

CRIMINAL LAW – PRACTICE AND PROCEDURE – Misappropriation – Conspiracy to defraud.

Cases Cited:
Papua New Guinea Cases

Paulus Pawa v. The State [1981] PNGLR 498 
The State v Tom Morris [1981] PNGLR 493
Maladina v The State (2016) SC1495
Roland Tom and Kalen Kopen v The State (2019) SC1833
Havila Kavo v The State (2015) SC1450
The State v Joseph Wai (2020) N8182
Brian Kindi Lawi v The State [1987] PNGLR 183
James Singo v The State (2002) SC700
The State v Gabriel Ramoi [1993] PNGLR 390
The State v Francis Natuwohala Laumadava [1994] PNGLR 291
The State v Andrew Ludwig Posai (2004) N2618
The State v Graham Yotchi Wyborn (2005) N2847
The State v Francis Potape (2014) N5773
Karani and Aimondi v The State (1997) SC540
The State v Baine [1990] PNGLR 1
Roland Tom and Kalen Kopen v The State (2019) SC1833
Potape v The State (2015) SC1613 
The State v Joseph Wai (2020)
The State v Iori Veraga (2005) N2849 
R v Tovarula [1973] PNGLR 140
R v Wendo [1963] PNGLR 217
The State v Charles Andrew Epei (2019) N7845 
Karani and Aimondi v The State (1997) SC540

Overseas Cases

R v Aspinall (1876) 2 Qu D 48
Peacock v the King (1911) 13 CLR 619
Johnson v Miller (1937) 59 CLR 467
R v Thomson (1965) 50 Cr App R 1
Director of Public Prosecutions v Merriman (1973) AC 584
Barca v The Queen (1975) 50 ALJR 108 
Scott v Metropolitan Police Commissioner [1975] AC 819
R v Rogerson (1992) 174 CLR 268 
R v Masters (1992) 26 NSWLR 450 
R v Easton [1994] 1 Qd R 531 
R v Gudgeon (1995) 133 ALR 379 
Stuart v The Queen (1976) 134 CLR 426
R v Oberbillig [1989] 1 Qd R 342 
R v Adams [1998] QCA 64
Shepherd v R [1990] HCA 56; (1990) 170 CLR 573  
Peters v The Queen (1998) 192 CLR 493 

References Cited

Sections 7, 383A, 407(1)(b), 530 of the Criminal Code (Ch. 262).
                     
Counsel

Ms H. Roalakona, for the State 
Mr J. Morog, for the Accused

DECISION ON VERDICT
21st February, 2020 
1.	BERRIGAN J: The State presented an indictment jointly charging the four accused with one count of conspiracy and one count of misappropriation, contrary to ss. 407(1)(b) and 383A of the Criminal Code (Ch. 262) (the Criminal Code), respectively, in the following terms, that they between the 1st day of January and 31st day of June 2017 at Gusap, in Papua New Guinea: 

Count 1: “…conspired with each other to defraud the Bank of South Pacific by deceitfully and fraudulently processing unauthorised bank withdrawals and unauthorised deposits from customer accounts”. 

Count 2: “… dishonestly applied to his own use and to the use of others monies in the sum of One Million Eight Hundred and Fifteen Thousand, One Hundred and Eighty-Five Kina (K,815,185) the property of the Bank of South Pacific Limited”. 

2.	At the material time the four accused were employed at the BSP Gusap Sub-branch located at Ramu Sugar.  Michael Yakip was the Officer in Charge (OIC), William Shal, Teller and Chief Cashier, and Patricia Maso and Reinert Waira were also both Tellers.

3.	The State alleged that the four accused acted together to take physical cash for their own use from the cash holdings of the Gusap Sub-branch.  To hide the taking of the cash, the accused collaborated with each other to process unauthorised withdrawals from, and deposits to, customer accounts, without customer knowledge, and fill out bank slips to balance out the cash with the system generated figure.   The OIC authorised all transactions.   The State invoked s. 7 of the Criminal Code.

STATE CASE 

4.	The State called five witnesses.  

Freda Isemba

5.	Freda Isemba, has held the position of Deputy Branch Manager of the Bank South Pacific (BSP) Lae Top Town Branch for the last 3 years and has worked for BSP for 23 years.  She is responsible for branch compliance and customer service.  She is also responsible for looking after three Sub-branches, Mutzing, Kabwum and Gusap. Gusap is a hybrid branch which is online and live with the mother branch.  A hybrid branch employs four bank staff. 

6.	At the relevant time Michael Yakip was employed as the Officer in Charge of Gusap Sub-branch and in charge of all operations and customer service of the Sub-branch.  He was also the primary custodian of all bank assets which includes cash. The OIC at a Sub-branch is authorised to approve any transaction up to K2000 (his financial limit). 

7.	William Shal was the Chief Cashier and responsible for holding the bulk of the Sub-branch cash.  The cashier holding is restricted to K504,000.  He, Patricia Maso and Reinert Waira were tellers responsible for accepting deposits by customers and paying out withdrawals by customers.  A teller’s financial limit for a withdrawal was K500, above which they needed to obtain approval from the OIC.  If the withdrawal was above K2000, the correct procedure was for the Sub-branch to email the Lae Top Town Team Leader or Branch Manager to authorise the withdrawal.  Ms Isemba was also responsible for monitoring the cash levels at the Sub-branch. 

8.	At the close of every day, the Gusap OIC sends a copy of the Teller Specie Book or Cash Book for the day to Lae Top Town, which is completed by each teller on closing their till at the end of each day, and reports the amount of cash on hand in their till.  The following day an officer in Lae prints out the Teller Specie Book, together with a copy of the system generated Teller Cash Report, which is taken from the bank’s General Ledger and shows the amount of cash the Sub-branch is holding including cash holdings for the ATM and each of Tellers No 1, 2 and 3 (identified according to their unique teller identification number) for that day.  He then manually compiles a Daily Balancing Sheet (also referred to as a Daily Cash Report) which identifies if there is any difference between the reported cash on hand in the Teller Specie Book for each teller at the subbranch and the figure reported from the General Ledger.  If the figures do not balance Ms Isemba is supposed to investigate and find out where the difference is.  

9.	The Teller Transaction Log automatically captures every transaction, every deposit and every withdrawal, that is posted through a teller’s till, or entered into the system by a teller through their.  Those transactions also feed into the General Ledger for each teller and the Subbranch overall. Access to the General Ledger is restricted to managers or team leaders.

10.	Checks are conducted on the second day after the date of the report (“second day checks”).  If there is a difference, and it is located in a suspense or other account the entry is reversed to the till to reduce the difference to zero.  If they are unable to locate the difference on the system, then it can only be said that the physical cash is missing.  The teller concerned would be disciplined, depending on the amount involved.  If the bank cannot recover the amount then a “loss report” is prepared and submitted for “write off”.

11.	Lae Top Town did not act to investigate the differences discovered at Gusap Sub-branch until June 2017.  The investigation was prompted when she realised that the differences for Teller No 1 were increasing by the month.  The investigation commenced when she was investigating a difference of K116,965.55 reported to have occurred on 16 January 2017 and identified from the Teller Transaction Log that William Shal had operated a second session on that day.  She had never in all her time at the bank heard of such a thing.  

12.	The normal process is as follows.  The bank is opened at the beginning of the day.  Every transaction conducted by a teller during the day must be posted through the till.  At the end of the day the bank is closed and the teller must “balance up”, that is count up the physical cash on hand and write it down in the Teller Specie Book.  The cash on hand must balance with the figure on the system.  A teller only ever operates one session per day.  The Teller Transaction Log for 16 January showed (Exhibit B at p 32870) that the physical cash on hand at the end of the day was K837,599.60 but the report showed that the OIC, Michael Yakip, had overridden the system to permit the operation of a second session by Teller No 1, William Shal, to state that the starting cash and the ending cash was K776,552.80 to reflect the amount contained on the Teller Specie Book.   If a teller tries to operate a second session they system will automatically ask for an override.  An override could only have been done by his OIC, as reflected in the Teller Transaction Report.  At no time was the fact that a second session had been conducted reported to the main branch.   She also identified that on 16 January 2017 a deposit of K61,046.80 was posted to Teller No 1’s Till but a copy of the physical voucher was not scanned onto the system as required.  No record was ever found.  

13.	For 30 January 2017, the system generated Teller Cash Report, Exhibit D, showed that total cash deposits of K59,945 were posted to Till No 8301 but the Teller Specie Book, Exhibit C3, only reflected cash deposits as K29,945, a difference of K30,000.  In addition, no corresponding deposit slip had been scanned to the system.  

14.	Every teller has a unique user identification number.  According to bank policy the user identification number and password required to operate a till are not to be shared or divulged to any other user.  Failure to comply with this policy will result in termination.   

15.	Once they realised that there were differences at Gusap they went through the process of identifying and isolating the differences.  The differences occurred between the months of January to June 2017.   

16.	The following documents were admitted by consent.  In summary:

a)	Exhibits A1, C1, E1, G1, I1, K1, M1 and O1 are the Daily Cash Reports prepared manually at Lae Top Town Branch for the dates 16 January, 30 January, 9 February, 13 February, 15 March, 27 March, 3 April and 20 April 2017, respectively; 
b)	Exhibits A2, C2, E2, G2, I2, K2, M2 and O2 are system generated Cash Reports (from the General Ledger) for the same dates;
c)	Exhibits A3, C3, E3, G3, I3, K3, M3 and O3 are copies of the Teller Specie Books prepared by William Shal for the same dates; 
d)	Exhibits B, D, F, H, J, L, N and P are the system generated Teller Transaction Logs for Teller No 1, T8301, William Shal, for the same dates.   

Date	Exhibit  No.	
16 January 2017		
Daily Cash Report dated 16 January 2017	A1	
Internally generated Teller Cash Report dated 16 January 2017	A2	
Copy of Teller Specie Book dated 16 January 2017	A3	
Teller Transaction Log dated 16 January 2017 in the name of Gusap teller number one	B	
30 January 2017		
Daily Cash Report dated 30 January 2017	C1	
Internally generated Teller Cash Report dated 30 January 2017	C2	
Copy of Teller Specie Book of teller number 1 dated 30 January 2017	C3	
Teller Transaction Log dated 30 January 2017 in the name of Gusap teller number one	D	
9 February 2017		
Daily Cash Report dated 9 February 2017	E1	
Internally generated Teller Cash Report dated 9 February 2017	E2	
Copy of Teller Specie Book of teller number 1 dated 13 February 2017	E3	
Teller Transaction Log dated 9 February 2017 in the name of Gusap teller number one	F	
13 February 2017		
Daily Cash Report dated 13 February 2017	G1	
Internally generated Teller Cash Report dated 13 February 2017	G2	
Copy of Teller Specie Book of teller number 1 dated 13 February 2017	G3	
Teller Transaction Log dated 13 February 2017	H	
15 March 2017		
Daily Cash Report dated 15 March 2017	I1	
Internally generated Teller Cash Report  dated 15 March 2017	I2	
Copy of Teller Specie Book of teller number 1 dated 15 March 2017	I3	
Teller Transaction Log dated  15 March 2017	J	
27 March 2017		
Daily Cash Report dated 27 March 2017	K1	
Internally generated Teller Cash Report  dated 27 March 2017	K2	
Copy of Teller Specie Book of teller number 1 dated 27 March 2017	K3	
Teller Transaction Log dated  27 March 2017	L	
3 April 2017		
Daily Cash Report dated 3 April 2017	M1	
Internally generated Teller Cash Report  dated 3 April 2017	M2	
Copy of Teller Specie Book of teller number 1 dated 3 April 2017	M3	
Teller Transaction Log dated  3 April 2017	N	
20 April 2017		
Daily Cash Report dated 20 April 2017	O1	
Internally generated Teller Cash Report  dated 20 April 2017	O2	
Copy of Teller Specie Book of teller number 1 dated 20 April 2017	O3	
Teller Transaction Log dated  20 April 2017	P	
Together with 		
(Extracts of ) Teller Transaction Logs dated from 16 January 2017 to 20 April 2017	Q	
Copies of daily Cash Reports from 16 January 2017 to 20 April 2017	R	

17.	The Daily Cash Reports identified differences between the amount of actual cash on hand as reported by Teller No 1, William Shal, in his Teller Specie Book and the figure that should have been on hand according to the General Ledger.  

18.	As Ms Isemba was unable to identify the reason for the differences from the bank’s records she travelled to Gusap in June 2017.  William Shal and Patricia Maso were on site at the time.  Michael Yakip was on annual leave. The bank’s records (physical vouchers) were secured. Both tellers were asked to close up.  She counted the physical cash on hand and compared it against the Teller Specie Book which balanced.  However, the cash on hand figure did not that match recorded on the General Ledger for Teller No 1. In the circumstances and having regard to the operation of the second session in the past she immediately suspended him.

19.	When a deposit is made the customer will bring a green deposit slip to the counter.  The teller is to check the date, the customer name, the account number and that the amount of cash to be deposited corresponds with the amount stated.   There is a box on the deposit slip for bank use in which the teller is to record the number and denomination of cash deposited.  The teller has to tick to confirm the details on both sides of the deposit slip (the bank’s receipt and the customer’s receipt). The teller accepts the cash, and enters the same details on the bank’s system.  Once this is done there will be automatic pop up requiring the teller to scan the slip into the system. If the image does not scan properly the teller may delete but will have to repeat.  Once complete a receipt will automatically print out.  That receipt is attached to the customer’s deposit slip and returned to them.  Customers can deposit any amount they want without any restriction up to K9999.99.  However, amounts above K10,000 require a team leader to interview the customer to ascertain the source of the funds.  The teller conducting the transaction is to stamp the face of the voucher with the stamp containing their teller number. 

20.	A manual withdrawal is conducted using a red slip in circumstances where a customer does not have their card with them or the amount exceeds K15,000.  The bank policy is “no cash, no card”.  The only customers that are allowed to use withdrawal forms are group account holders, like small sports clubs, church groups and family group accounts.  Personal customers are only allowed to do so when they are waiting for their card to be issued. The policy applies nationwide including at sub-branches.  If a customer presents to make a manual withdrawal the teller is to ask them where their card is.  If the card has been lost or stolen, the customer will be asked to complete a card application form.  The existing card will be stopped and the withdrawal will be processed manually.  If the customer gives any other reason the teller is supposed to refuse to process the transaction and the customer is asked to come again with their card.  If the amount exceeds K2000, which is the maximum amount that can be withdrawn from an ATM on a daily basis, but is less than K15,000 the teller will assist the customer to make the withdrawal using the card and not the withdrawal form.  If the amount is greater than K15,000 then a form will be used because the eftpos system will decline to issue such an amount.  However, the customer must still have a Visa or Kundu Card with them.

21.	In any case where there is no card the teller must conduct the normal checks on the withdrawal slip, date, account number, account name, amount in words, which must also correspond with the amount in figures.  The customer is to sign on the slip.  The teller will then go into the system to confirm that the name and account number matches and that there are sufficient funds in the account.  At this point the teller will refer it to the OIC for approval.  The OIC will conduct the same checks, to confirm that the form has been correctly completed and signed, and also check against the system.  If the amount is within his K2000 limit he may authorise by placing his full signature on the face of the withdrawal.  If the amount is greater than K2000, a copy of the front and reverse of the withdrawal form has to be scanned, together with a copy of the customer’s card if available, and emailed to the OIC, Branch Manager and herself at Lae Top Town.  The OIC prints out and brings it to her to conduct the same checks. If she is satisfied she will respond via email with the word “approved”. If she is not satisfied in terms of identification she will ask for supporting documentation, which includes any form of identification, e.g. drivers licence, NID card, employer identification, passport, Nasfund card etc, before approving.  Copy of email is printed by the OIC and given to the teller to proceed with the transaction.  

22.	Customer details are checked against one of the bank’s systems, called AS400, which contains information about the customer’s name, address, birthdate. A specimen of the customer’s signature is stored electronically on another system called CBS Teller (Comprehensive Banking System Teller).  Every teller, and every body in the branch will have access to AS400.  CBS Teller is restricted to the tellers.  Branch Managers, Supervisors and Team Leaders also have role based access to CBS Teller. 

23.	The user identification is given by the HR Department.  Ms Isemba is able to view this information on the CBS Administration Screen.  She confirmed both with HR and her on investigations that William Shal was T8301.  

24.	Ms Isemba and the investigation team from Lae, went through the “Day’s Work”.  This includes all deposit slips, cash cheques, withdrawal forms and any other documents processed through a particular till.  As a result they became aware that there were some transactions which were conducted for which there were not vouchers scanned to the system.  This was a compliance breach.

25.	She observed the tellers at work to confirm that the system would not allow the transaction to be processed without scanning and she observed that the system automatically asked for the teller to scan the voucher.  It is possible for a teller to override the request.  The effect is that the transaction is still posted to the till but no voucher is stored.  

26.	She observed a number of compliance breaches in the vouchers of William Shal.  Amounts greater than K10,000 did not indicate that the OIC had obtained information as to the source of the monies.  For amounts greater than K2000 they were not referred to Lae Top Town for approval.  In addition the amounts of funds missing were significant and did not match the level of business in and around Gusap.  Compared to activity in 2016 there was a significant increase between January and June 2017.  Deposits for business accounts were stable but there was a spike in deposits and withdrawals from personal accounts which could not be explained.  During the two weeks she was at Gusap there were also a number of complaints from customers who attended the branch and wanted to withdraw manually using a withdrawal form.  The tellers referred them to her and she advised them of the “no cash no card policy”.  She also observed a number of compliance breaches, for example withdrawal forms not being authorised.  Failure to indicate currency in words including Kina or Toea, customer signature not on the reverse.  Failure to tick to confirm denominations.  

27.	There are different types of savings accounts.  The Kundu Account is for personal customers and is linked to a card.  A Plus Saver account is for saving and does not have a card linked to it.  A third type of account is for group savings accounts for which more than one person is required to operate it and there is no card linked to it. During the investigation she identified that most of the cash  withdrawals were from savings accounts.  For these accounts the system does not ask for documents to be scanned. 

28.	Numerous withdrawals were conducted for which customer’s did not sign, which is essential to confirm the signature against that of the account holder.  Numerous deposits were also made to the children of William Shal for which there were no (other than 3) physical vouchers.  She also discovered during the course of her investigation that the other tellers were processing large amounts over K10000 as well, including “transfers” between accounts, which means that money is simply transferred between accounts.

29.	In addition to the above exhibits, a further 464 documentary exhibits were admitted through Ms Isemba, comprising in the main withdrawal slips, deposit slips, and printouts from the bank’s AS400 system (which captures details of transactions processed including the teller number, date, nature of transaction, account number and amount).  Some bank statements and other documents were also admitted.  I have considered all of the exhibits tendered in reaching my decision on verdict.  I make reference to particular exhibits as they become most relevant below.  

30.	Ms Isemba identified the following examples of transactions processed by Teller No 1, T8301, William Shal, which she regarded as non-compliant with bank policy for the following reasons:

a)	Exhibit S1, Withdrawal dated 1 June 2017 from the account of Adam Steven in the sum of K190:  the teller did not tick all the boxes to confirm denomination amounts. Exhibit S2, AS400, shows that money withdrawn from customer’s account;
b)	Exhibit MM1 and 2, Teller Transaction Log extract and AS400 records dated 23 February 2017 showing transfer of K20,000 from the current account of Ken Pito to savings for which there was no voucher;
c)	Exhibit OO1, Teller Transaction Log extract and AS400 records dated 15 March 2017 showing transfer of K15,000 from the current account of Ken Pito to savings for which there was no voucher;
d)	WS2(A2) to (M2) is a bundle of withdrawal slips which the customer did not sign on either the front or reverse;
e)	WS4(A1) to WS4(LLLL), 104 withdrawal slips for the period January to June 2017, which appear to be unauthorised because there was no notation to indicate that the customer had been interviewed to state the source of funds.  In 15 cases, involving amounts above K10,000 there was nothing to indicate that the OIC had interviewed the customer as to the source of funds;
f)	WS4(Q), AS400 report showing deposit of K25.10 to William Shal’s daughter’s account, Jasmine William, dated 10 January, for which no deposit slip could be found. 

31.	She also found irregularities in the conduct of transactions through the tills of Reinert Waira and Patricia Maso.   Examples of non-compliant transactions processed by Reinert Waira, T8303:

a)	RW3(N), transfer processed from account of Pala Parep to Roger Powe, Reinert Waira’s husband, in the sum of K10,000 on 27 February 2017 approved by Michael Yakip.  Papa Parep used a key word or a “marksmen” rather than signing.  This is used for illiterate customers. For amounts greater than K2000 additional particulars should have been completed on the form.  Not endorsed by customer on reverse.  Transaction not referred to Lae Top Town Branch.

32.	The three tellers stand side by side in a row, within arm’s reach of one another.  The OIC sits about a metre directly behind them at a table.  There is a petition between each of the tellers which comes up to about chest level. 

33.	With respect to Michael Yakip they also found that transactions were going through his account which were not salary or otherwise paid by the bank.  The transactions were not made known to Lae Branch.  Every deposit to a staff account which is not related to BSP must be authorised by a manager.  The OIC is responsible for conducting independent checks and reporting compliance breaches to Lae Branch.  

34.	With respect to the second session, it was possible for the teller to open the session but the figures were changed to match the physical cash count.  So the system would have required an override.  

35.	She said there were no complaints from customers because they did not know the transactions were happening on their accounts.  

36.	At the end of every month she has to submit a “Cash Return” report to the compliance department.  When she submitted the report for May she was asked why there were differences for the months January to April and asked to do an investigation. 

37.	Under cross-examination she agreed that when she went to Gusap in June she conducted a cash count and the cash count balanced, meaning that the physical cash balanced with the specie book.  She led the investigation.  Others were implicated.  Akaiya Eomu was responsible for all sub-branches including Gusap.  She did not know what the financial limit attached to the tablets used before Gusap became a subbranch was. 

38.	The report, A1 showing the difference was with her in January 2017 but that no investigation was started until June 2017.   Furthermore there was another investigation that was being conducted into the posting of cheques from Goroka, Kavieng and BSP Top Town Branches to Teller 8301, T8302 and 8303, respectively, in error.  The reconciliation team was identifying the cheques that had been posted to the tills in error and reversing the value back to the correct customer account held in other branches, mostly Goroka, Kavieng and BSP Lae Top Town.  

39.	The bank identified that there were differences adding up to K2m which it was reconciling and reversing.  She was not really sure about the amount but agreed that the amount was over K1m.   It was the responsibility of Akaiya to identify every morning the cheques transferred in error and reverse them out. Akaiya was not part of her investigation team and had since been terminated in relation to the cheque errors but had not been charged criminally to her knowledge.  

40.	She denied that under any circumstances could the K61,000 deposited on 16 January 2017 be the result of the cheque posting system error.  She explained that Biziweb is the bank’s system that captures all the physical vouchers and confirmed that there was no physical voucher scanned into the system for that transaction.  Similarly, she said it was not possible that the missing K21,000 was a result of the cheque deposit error.  

41.	It was not all cheques for those branches only certain cheques.  She was not really sure how the error occurred but it was a result of an IT glitch.  When the Gusap subbranch was established the Teller ID Numbers were the same as the main branch numbers.  The problem existed from the time Gusap transitioned from a rural post, using only tablets, to a live subbranch i.e. from April 2015 up to November 2016.   

42.	She agreed that after the system is closed it is not possible to edit the first session.  The figure in the first session cannot be edited.  When the supervisor or team leader “close till” the amount in that session cannot be edited.   But it is possible to alter the figures in the second session before it too is closed. 

43.	She agreed that cash counts were conducted at the end of every month at Gusap. She could not recall whether she was the one who conducted the count on 30 January 2017.  The only cash count she did was in June when the actual cash balanced with what the tellers wrote on the specie book.  

44.	The Teller Log Report captures everything posted through a particular teller, which is also posted to the General Ledger.  Gusap and each till has its own General Ledger or cash account which appears on the internally generated Cash Report.  

45.	She agreed that for all withdrawals above K5000 a 2% fee is charged, or K200 per every K10,000. A Plus Saver Account is a fee free account so withdrawals directly from a Plus Saver Account are not permitted. If the customer wishes to with draw money from a Plus Saver Account the monies must be transferred to the customer’s primary account which has a card. 

46.	Akaiya’s roles was to oversee all the bank’s digital queries, eftpos, payroll, software.  He was also responsible for compiling the Daily Cash Reports in the morning.  He had no authority to deal with cash or no cash limit.   He would have to refer it to her.  She has a limit of K50,000. OIC up to K2000; William Shal as chief cashier K1000; and the remaining two tellers K500.   This is standard operating procedure and bank policy.  

47.	She agreed that Gusap processes large amounts for business houses and has been doing so it was established.  And has been doing so without approval from Lae Branch but then said her investigation was concerned with January to June 2017.

48.	In re-examination she clarified that the posting of cheques to the Gusap Teller Accounts stopped in December 2016.  IT fixed the issue in April 2017.  The remaining cheques ere reconciled and cleared between June and July 2017. She agreed, however, that the issue did affect the differences that were identified in the Daily Balance Cash Reports for 2017.  The amount of difference, especially for Teller No 1, will include the cheques posted to Till No 1.  So in the process of reversing the cheques they credited the value of the cheques into the tellers till and debited and credited the customer accounts. In doing so they resolved the balance of the difference.  But there was still a difference.  And as the amounts were reversed it reduced the difference. A reconciliation was conducted between January and April and the reversals were done from June to October 2017.  The system error did not affect the processing of the physical vouchers by the tellers.

49.	With respect to the large payments to companies that took place and for which approval was not sought, a report would have been generated for the bank’s “relationship managers” to follow up and confirm with the company that everything was in order before processing. 

50.	It took her until June to commence the investigation because she was trying to work out why no cheques were posted to Teller No 1 but the differences kept increasing.  Once she identified that a second session was being operated she was able to identify that there were adjustments in the cash.  

Mary Garalom

51.	Mary Garalom is the Team Leader Telling, Lae Top Town and has been with the bank for 14 years. She has 9 years’ experience as a teller.  She received 6 months of training before going on to become a teller.  She was asked to assist Freda Isemba conduct the investigation into Gusap Sub-branch.

52.	Her task was to check the physical vouchers, the withdrawal and deposit slips, against the Teller Transaction Logs for each of William Shal, Patricia Maso and Reinert Waira.  The vouchers were stored in date order for each teller and held in the bank’s safe. 

53.	The investigation identified a large number of transactions she regarded as “unauthorised”, i.e. unsigned withdrawal slips, transactions completed by William Salah and processed by another teller, transactions conducted above approved financial limits, and transactions for which physical vouchers were missing from the bank’s records.  

54.	On the Teller Specie Book for William Shal on 16 January 2017, Exhibit A, the handwritten figure of K116,966.55 was written by her as the cash shortfall after comparing the Teller Specie Book and the General Ledger balance contained in the Daily Cash Report. The figure was not inclusive of cheques.  She stated that she conducted a similar exercise with Exhibits C to O and confirmed the cash shortages stated in the above Daily Cash Reports. 

55.	Ms Garalom also stated that the differences reported on the Daily Cash Report for 27 March 2017 of K11,148 and K29,529 were not reported by either Reinert Waira or Patricia Maso on their respective Teller Specie Books.  I note here, however, that neither the specie books nor the Teller Transaction Logs (other than for 19 June 2017 for Patricia Maso) have been provided for either of those accused.  See further below. 

56.	She referred to the following non-compliant transactions for William Shal:

a)	Exhibit JJJJ2, a cash withdrawal dated 2 June 2017, from the account of Veslyne Boma, in the sum of K90 dated 2 June 2017, processed by Teller No 8301, William Shal, and initialled by him as the teller, when in her view a card should have been used in accordance with the bank’s “no cash no card policy”;
b)	Exhibit SS1, a cash withdrawal dated 27 April 2017 from the account of Ken Pito in the sum of K4900 processed by Teller No. 8301, William Shal, and initialled by him, which was above his financial limit, and was approved by Michael Yakip, his signature appearing at the top of the withdrawal, also above his financial limit.  No email was attached to indicate approval from Lae Branch.  Whilst there was a purported customer signature on the front of the voucher, there was no customer signature on the back of the voucher, in further breach of bank policy;
c)	Exhibit WS4(Q), a deposit in the sum of K25.10 processed by Teller No 8301, William Shal, to the account of his daughter, Jasmine J William.   

57.	Ms Garalom prepared the following lists based on the same approach for Reinert Waira:

a)	Exhibit RW1 (pp 1 to 3), list of 59 “Forged Signatures/Unauthorised Withdrawals/Staff Withdrawals” processed by Teller No 8303, Reinert Waira, for the period 30 January to 7 June 2017 totalling K396,371;
b)	Exhibit RW1 (pp 3 to 4), list of 20 “Unsigned Withdrawals” processed by Teller No 8303, Reinert Waira, for the period 30 January to 1 June 2017 totalling K25,815;
c)	Exhibit RW1 (pp 4 to 6), list of “Cash Deposits” processed by Teller No 8303, Reinert Waira, for the period 3 January to 6 June 2017 totalling K418,653. 

58.	She referred to the following examples of non-compliant transactions for Reinert Waira:

a)	Exhibit RW1, Items No 7 and 9, cash withdrawals in the sum of K20,000 and K10,000, respectively, from the account of Waieng Komai, processed by Teller No 8303, Reinert Waira.  Waieng Komai is Reinert Waira’s husband according to the bank’s AS400 records;
b)	Exhibit RW2, list of 38 “Forged Signatures/Unauthorised Withdrawals/Staff Withdrawals” processed by Teller  No 8303, Reinert Waira, for the period 30 January to 7 June 2017 totalling K325,990 (which appears to contain some but not all of the transactions contained in RW1 pp 1 to 3).  This is a summary of the withdrawal slips, Exhibits RW3(A) to RW(3)JJ.  No indication as to physical withdrawals conducted instead of using card.  In some cases the customer did not sign on the reverse of the slip;
c)	Exhibit RW3(JJ), cash withdrawal from the account of William Shal for K21,000, signed by William Shal, authorised by Michael Yakip by signature, and processed by Teller No 8303, Reinert Waira, which was processed without approval from Lae Branch;
d)	Exhibit RW6(A), cash deposit of K4800 dated 5 June 2017 to the account of Bona Komai, filled out by Reinert Waira instead of customer, initialled by Reinert Waira,;
e)	Exhibit RW6(R), cash deposit of K960 dated 1 March 2017 to the account of Michael Yakip, processed by Reinert Waira – there was nothing wrong with this transaction in her view;
f)	Exhibit RW6(S) cash deposit of K1250 to account of Michael Yakip processed by Reinert Waira but no record of source of funds noted on the deposit slip as required according to bank policy;
g)	Exhibit RW6(JJ) cash deposit of K1200 to account of William Shal in the sum of K1200 processed by Teller No 8303, Reinert Waira, with no notation as to source of funds.

59.	With respect to Patricia Maso:

a)	Exhibit PM20 cash withdrawal of K5000 from account of 25 April 2017 from account of Gorethy Maso, processed by Teller No 8302, Patricia Maso, not referred to OIC and Branch Manager for approval.  Signature does not match that on the system.  She believes Gorethy is Patricia Maso’s mother but was unable to confirm;
b)	Exhibit PM2 bank statement for St Luke’s Gusap Primary School, Account No 1001525422 showing two “debit adjustment”s of K40,000, i.e. withdrawals from the account on 25 April 2017.  No vouchers available.  According to AS400 the transaction was processed by Patricia Maso.  PM3 is a deposit slip dated 2 May 2017 for K75,000 to the account of St Luke’s Gusap Primary School processed by Patricia Maso.  PM5 is a withdrawal slip dated 12 May 2017 for K70,000, above her limit, not approved by OIC or Lae Branch, no signature on reverse;
c)	PM9, bank statement for Ramu Sugar Vocational Centre, dated 4 May 2017, Account No 1000433697, showing credit adjustment of K80,000, no vouchers kept;
d)	PM18 cash withdrawal dated 18 May 2017 of K1380 from Justine Inki, above teller limit, not signed on reverse nor authorised by OIC and three different inks used.

60.	With respect to Michael Yakip:

a)	She found that Michael Yakip completed a number of cash withdrawal deposits himself and passed them to tellers for processing.  He also signed approving transactions above his authority limit and did not send them to Lae Branch for approval;  
b)	MY1(A), cash withdrawal dated 25 April 2017 from the account of Daniel Naria in the sum of K15,000 approved by the signature of Michael Yakip, signature does not match that of customer, not reported to Branch Manager for approval, processed by Teller No 8301, William Shal;
c)	MY1(B), cash withdrawal dated 29 May 2017 from the account of Daniel Naria in the sum of K13,000 approved by the signature of Michael Yakip, signature not match that of customer nor that of last withdrawal, not reported to Branch Manager for approval, processed by Teller No 8301, William Shal;
d)	MY4(A), cash deposit dated 2 May 2017 to the account of Daniel Naria in the sum of K15,000 processed by Teller No 8301, William Shal;
e)	MY4(D) cash deposit dated 2 March 2017 to the account of Michael Yakip in the sum of K543 processed by Teller No 8303 Reinert Waira.  Did not indicate the source of funds deposited to a staff account in breach of bank requirements;
f)	MY4(G) cash deposit dated 3 March 2017 to the account of William Shal in the sum of K1200 processed by Teller No 8303 Reinert Waira above her limit, without any approval (why is this on MY’s lit);

61.	Ms Garalom was not able to establish the differences between the Tills and the Daily Cash Report because the summaries were a combination of withdrawals and deposits. She completed her task in July 2017.  

62.	She was aware that transactions from other branches were posted to Gusap sub-branch but the problem was rectified prior to the incidents of 2017.  The posting of cheques from the other branches did not affect the physical vouchers for Gusap.

63.	Under cross-examination she agreed that she had 6 months training as a teller, which was conducted at the Lae Commercial Centre.  She had to complete theory comprising “Telling Modules” followed by practical training for a further 3 months.  Before conducting the investigation she was not informed of the circumstances in which the four accused became tellers, or the way in which Gusap became a subbranch.  She was not told prior to conducting the investigation that there was a system error which had been in place since Gusap became a subbranch.  Her task was to compare the physical vouchers with the Teller Transaction Log.  

64.	She agreed that William Tarabu was present in Gusap as relieving OIC during the investigation.  He did not assist with reviewing the vouchers but with the General Ledger balance checks.

65.	She confirmed that on Exhibit A3 the words “Diff K116,966.55” in red are hers; the words in capital are Michael Yakip’s. The difference of K116,966.55 was confirmed against the AS400 and the Teller Cash Report, A2.   The AS400 is not attached to Exhibit A3. She said that the General Ledger figures consists of all three tills plus the ATM cash figure.

66.	She agreed that the Teller Transaction Log contained a history of all the transactions processed through a till.  She agreed that cheque records appear separately from cash in the Teller Transaction Log.

67.	She agreed that cheques posted in Goroka to Till No 1 would be reflected in the Teller’s Cash Report, not the Teller Transaction Log and would later be reversed out from the Teller Cash Report.  She agreed that the Cash Report would not reflect the physical cash in the till as a result.  She agreed that the difference between the Teller Specie Book and the Cash Report could be attributable to that error.  

68.	 She confirmed that the OIC should report compliance breaches to management, following which there would be counselling and training.  

69.	She agreed that Teller Transaction Logs and Specie Books must be submitted daily and assumed that if Michael Yakip had failed to do so he would have been terminated.  She assumed he wasn’t because he did send the cash report. 

70.	She was sure that differences stopped appearing after the four accused were terminated in July 2017 because they cleared off the difference in the tills when new tellers started.

71.	She agreed that it was mandatory for monthly cash counts to be conducted at the end of every month by officers from Lae every month but could not confirm if they were conducted.  The person responsible for conducting them was Freda Isemba. William Tarabu, the relieving OIC told her they were conducted but she did not confirm with Ms Isemba.

72.	She agreed that some of the customers at Gusap were illiterate and used a marksman or key word instead of a signature.  But said that details should have been noted on the vouchers when they conducted transactions in accordance with mandatory policy.

73.	She said that whilst it was possible for a teller to log back in for a second session it was not allowed and in 9 years as a teller she had never done it.  

74.	The “second day check” is conducted by the OIC of the branch every day or the second day on the Teller Transaction Log and the Teller Cash Report. The Branch also checks the same reports.   She did not agree with Isemba’s evidence that the second day checks were done in Lae.  She maintained that they were supposed to be done by the OIC and Lae would conduct monthly checks. A report is complied called a “sub-branch visit report” after the team from Lae complete the visit. These reports are mandatory but she has not sighted any such reports.

75.	She confirmed that every voucher must be scanned through the bank’s system upon which  it is stored on “Bizedocs” and viewable on “Bizeweb”.  Bizedocs tracks all the vouchers across the country.  If a transaction is posted to a Teller’s Transaction Log but the teller did not scan the corresponding voucher then the system would require the OIC’s password to allow the transaction to go through.  If the physical voucher was in Gusap but was not scanned onto the system then the voucher may have been subsequently misplaced. 

76.	A deposit requires the teller to confirm on AS400 that the deposit is being made to the correct account.  They then enter the number, amount, and description onto the system.  The system will only ask for the OIC’s password if the teller fails to scan the voucher.  

77.	When the teller does their end of day “balance” they use CBS Teller.  The cash break up from CBS Teller is written on the Teller Specie Book for each denomination on hand.  The teller signs off and the OIC confirms all cash is present and balanced.  If not they must report it.  

78.	The OIC enters the same figures on the specie book into CBS Teller to confirm they are balanced.  And then closes the till. The OIC closes the till not the teller. OIC signs on AS400 where he then requests a Teller Transaction Log to be produced by IT overnight. Totals from the Teller Transaction Log are posted to the General Ledger. The General Ledger produces the Cash Report for every teller. 

Daniel Naria

79.	 Daniel Naria has been employed as a slaughterman with Ramu for the last 20 years.  Educated to Grade 10. He has an account with BSP.  He uses his card to makes withdrawals rather than using a withdrawal slip.  He did not make the withdrawals in the sums of K10,000, K15,000 and K13,000 dated 29 March, 25 April and 29 May 2017, Exhibits RW5, W and X, respectively.   Nor did he give anybody permission to do so. The company pays his salary into the account.  He did go to the Gusap subbranch on 2 May 2017.  He recalls withdrawing K300.  He did not deposit K15,000 to his account, WS4(C2).  His salary is paid directly into his account. He did not deposit K13,000 into his account on 5 June 2017 (Exhibit WS4(EI)).  

80.	Under cross-examination he said he has lived in Ramu for more than 25 years.  He knows the accused only by their face and that they work in the bank.  He sometimes makes withdrawals at the bank. The tellers inside the bank assist him to transfer money to students, school accounts.  He has two accounts with the bank.  He is also a gold buyer.  Sometimes he withdraws money to buy the gold and sometimes he deposits money to the bank when he sells it.  He uses his Plus Saver Account for big withdrawals and deposits.  He does not recall making deposits to his account in April, May or June 2017.     

81.	He tried to withdraw money from eftpos machine in 2017 but was declined.  He asked the staff at Gusap and was advised to go to Lae. He was asked by the police about the deposits.  He was then asked by police to make a statement.  He went back and went to make a withdrawal and realised that all his monies were there.

82.	To transfer monies he completes a withdrawal slip and a deposit slip, for school fees, in amounts of about K5000.  He sometimes deposits larger amounts after selling gold, like K14,000.  He cannot recall exactly how much he deposited.  

Silas Gilmai
83.	Silas Gilmai is a truck driver from the Oil Palm Transport Section of Ramu Sugar. Never been to school.  Conducted withdrawals in January 2017 but none thereafter.  In May 2017 realised that K10,000 had been withdrawn from his account after he checked his balance in Kainantu. He complained to Reinert Waira and she told him it was a system error and the money would be replaced. It has never been replaced.  He did make cash deposits at Gusap subbranch in May 2017, about K400 or K500, not exceeding K1000 to his Plus Saver Account 1003371141.  

84.	Under cross-examination he said he gave his complaint to the officers at Gusap and they emailed Lae.  He was sure that there are eftpos machines at the counter at Gusap.  He does marketing and money lending and sometimes makes deposits of K1000.  However, he does not withdraw from his Plus Saver Account. 

Keao Pie

85.	Keao Pie runs a trade store and does marketing.  He has never been to school and is illiterate. In 2017 he deposited K10,000 to his account at Gusap.  He also deposited K9000 at Lae. He withdrew K4000 and deposited it again. His son normally fills out a withdrawal slip.  He signs it.   He did not withdraw K20,000 from his account in April 2017 nor K15,000 in May 2017.  

86.	Under cross-examination he was told by police that K17000 was missing from his account. He cried because he worked very hard for the money.  He does not know if it has ever been found.  

87.	His children check his balance using his pin when he is with them. He knows William Shal.  He lives close to him.  Shal sometimes helps him with transactions in the bank. His son helps him complete withdrawal forms. 

88.	He only withdrew K4000 and K50 in May 2017.  Nasol his son completes the withdrawals but he signs and does the transaction. Nasol lives with him. It was not possible for Nasol to go and withdraw the monies.  The card is kept in his possession.

DEFENCE CASE

Patricia Maso
89.	Patricia Maso grew up in Ramu.  She graduated from Madang Technical College with a Diploma of Business Management in 2012.  She was employed as a teller by BSP at Gusap subbranch in 2013 after she responded to an advertisement on a notice board in Ramu.  

90.	Customers at Gusap include Ramu Industries employees, villagers, people from the settlements, people who do marketing and live around town, the churches, schools. 

91.	When she first started withdrawals and deposits were conducted using a “Blue Bamboo” tablet.   She did not have a till number then.  The tablet limit was K28,000.

92.	Gusap became a subbranch in 2015. She was issued with Till No 8302 and began using CBS Teller.  And also serving business houses, schools, and customer accounts. 

93.	Training using PowerPoint was conducted by Akaiya Eomu for one hour in the morning and one hour in the afternoon, for two weeks.  No materials were provided. They were taught how to conduct deposits and withdrawals. They were not advised during training about financial limits. To conduct a deposit she has to confirm cash/cheque, the account and deposit to the account.  If a withdrawal, she had to seek assistance from her OIC, Michael Yakip.  She was never cited for or warned about any compliance breaches prior to suspension. 

94.	With respect to the following transactions:

a)	Exhibit Withdrawal of K20,000 dated 30 January 2017 from Waieng Komai’s account to Roger Powe’s (husband of Reinert Waira).  Komai is a small businessman. He asked her if she could help him withdraw the full amount without paying the 2% transaction feel.  She helped him complete the withdrawal for Komai and a deposit for Roger Powe and transferred the monies to the account of Roger Powe.  The money was simply transferred from one account to the other.  Roger was there to do his own banking.  They know each other.  His account was a Plus Saver Account which did not attract fees.  She asked Roger if he could assist;
b)	Exhibit PM20: A friend’s school fees were deposited to her mother’s account so she had to withdraw it and give it to her friend.  She helped her mother to complete the withdrawal slip.  Her mother signed and she gave her the money;
c)	Exhibit PM2 bank statement for St Luke’s Gusap Primary School, Account No 1001525422 showing two “debit adjustments” of K40,000 from the account on 25 April 2017: She can recall that the signatories came wanted to transfer funds to the Ramu Vocational School Account for payment for a job done.  The Vocational School offers building, mechanic and agricultural training.  A withdrawal and deposit slip was completed and funds transferred from one account to the other;  
d)	Exhibit PM9, bank statement for Ramu Sugar Vocational Centre, dated 4 May 2017, Account No 1000433697, showing credit adjustment of K80,000:  there was no withdrawal just a transfer between accounts.  Withdrawal and deposit slip completed;
e)	Deposit of K50,000 to Papindo Trading Limited Account 1000385914 dated 19 June 2017:  Recalls that on that day only two of them, herself and William Shal were working.  It was a very busy day and the ATM was down.  Papindo came in with a deposit which she processed to their account.   Later on during the day he asked her to transfer small notes to him so she voided the transaction, i.e. as the account had already been credited, she reversed the credit, and gave the monies to him to deposit and use the cash for small notes (K5, K2).  She cannot recall of any K2 notes.    

95.	In the bank three tellers stand together in a row.  The OICs table is located one metre behind in the middle.  There is no wall between him and the tellers. 

96.	At the end of the day the teller balances the till.  The OIC confirms and checks the cash is balanced with the cash on the system and signs off.

97.	She does not know anything about the systems error. 

98.	She denies the allegations. She is sure she kept records of all vouchers processed.  The vouchers are kept at the telling station in a bundle during the day and given to the OIC at balancing.  After that the monies are locked in the safe.  The vouchers are kept in a box and put in the storeroom.  There is a separate box for every teller, every day. But if anything were to go missing during the day she would notice it whilst balancing.  

99.	Under cross-examination Ms Maso agreed that she was trained in how to check a deposit slip, including the date, account number, amount matches in figures and words, but said they were not advised to tick the slip. But agreed on being shown PM16 dated 19 June 2017 that she did tick on the customer’s copy of the deposit slip for Papindo of K50,000. 

100.	She had to seek OIC approval for transactions above her limit.  Her limit was not K500 but K5000. She agreed the withdrawal from her mother’s account was a compliance breach.  She agreed transaction from St Luke’s Account to Ramu Vocational Centre was a compliance breach.  

101.	She was aware of “no card no cash policy” in 2017 but as the only ATM was often not working had to process withdrawals manually to serve customers and keep the business going.  Agreed that till number unique and not to be shared.  

102.	She agreed she processed PM26, withdrawal of K6900 from account of Yungio Dinbi Yunga dated 19 June 2017 in breach of “no card, no cash” policy. Agreed she processed withdrawal of K13380 dated 18 May 2017, PM18 for Justine Inki. 

103.	In re-examination Ms Maso said the teller limit was K2000. She became aware at some point when Akaiya and William Tarabu came and told her.  When they take cash from a deposit they put the cash in a drawer after entering details on CBS Teller.  There is no “till” as such. 

Reinert Waira

104.	Reinert Waira has lived in Ramu since a small girl.  She was employed with BSP at Gusap Ramu for almost five years from 2014 to 2017.  She too applied for the position from the notice board.  Training was provided for one hour in the morning and one hour in the afternoon by Training Officers from Lae Top Town.  But she said it was when Ramu was a Rural Sub-Branch. At first they were using tablets.

105.	She started as a Sales Officer, and was allocated a tablet to go out and open new customer accounts. Most of these customers were living at Ramu Sugar. Most of the employed ones already had accounts. Most accounts in the rural areas were opened for people who were unemployed.  She personally knew most of the customers that she attended to. Ramu is a small town and growing up there as a child she knew everyone.  Many customers are illiterate and put a “x”, tick or key word (this means the customer is asked some questions together with their key word when they come to the counter for service).

106.	Where the amount is above K2000, it must be approved by the OIC, Michael Yakip.  If the customer does not receive the money they will always come and complain to us.  For every K5000 a fee of K100 is charged by BSP.   She conducted a few big transactions so that customers could avoid the fees.  To avoid the fees the monies were transferred to another person’s Plus Saver Account, which does not attract any fees.  

107.	She was allocated a till when Gusap became a sub-branch.  After closing the branch every day.  She counts the cash and records the breakup of K100s, 50s, 20s and 10, 5s and 2s and write it in a cash book.  The figure on the cash book has to balance with the figures on the CDS Teller.  If it does not balance she would recount the cash again. If it was still not balanced then she would call Michael Yakip, the OIC to assist her.  Whilst employed at Ramu Sugar she never at any one time encountered her till unbalanced.  

108.	The bosses from outside the branch visited at the end of every month to conduct the “end of the month cash count” where they count all the cash in the branch.  They count the tellers, chief cashier and the ATM to make sure it balances.  When the bosses come from Lae, mostly they come for cash counts only.

109.	She was wrongly charged for misappropriating the bank’s money. They came up to conduct an investigation.  Michael Yakip and William Shal were suspended that same day, around June 2017.  At that time, she was on sick leave so when she resumed her duties her till was already closed so she resumed work as a sales officer responsible for opening accounts only during the investigation.  She was later told she was suspended.  The following day she was brought into the branch and charged with one count of misappropriation. 

110.	Under cross-examination Ms Reinert said that she was not specifically told that they had to tick off the voucher when processing transactions but that they have to check all the details. She disagreed that her limit was K1000 and maintained it was K2000. She disagreed that the OIC had a limit of K2000.  He was not given a limit.  If the limit was more than K2000 she would need clearance from her boss.

111.	She agreed that the correct process was that when processing a withdrawal slip, the checks are done, then you enter the information into CDS Teller, and then use your stamp to stamp the document to show that you have processed the transaction.  She agreed that the AS400 system captures the teller that conducts the transaction.

112.	She agreed that Roger Powe is her husband.  And that she was familiar with customers, and whether they were employed or not, what their banking activities were generally but not their account balances.  She would know which of them regularly checks their account or not if they had a Plus Saver Account but not if a customer does not come in to check account then they use their card.  

113.	She is familiar with the “no cash no card” policy but processed transactions without card nevertheless because there was only one ATM to cater for all of Ramu Sugar which had a very long line so they assisted some customers with withdrawals to keep them satisfied.  And breached policy to assist customers avoid cash handing fees. 

114.	She disagreed that all the withdrawals in RW(3) to RW(3) JJ were not approved and authorised by the customer.     She disagreed that they were done without customer authority but in breach of bank procedures.   She disagreed that this was to cover up use of cash monies from the branch.

115.	She agreed that teller stamps are specific to each teller.  Stamps are not to be shared. When it was put to her that there several transactions were processed using the Teller stamp of 8302, belonging to Patricia, she said that their Teller IDs were switched during a system failure.  Her ID was 8302 when she started working and then the system automatically changed the teller number without them realising.

116.	In re-examination she said that she was allocated Teller ID 802 when she started working in 2014.  She is not sure when, or in what year, the system error came about.  In some cases the stamp for 802 appeared on a voucher she processed because even though AS400 changed she was still holding the 802 stamp.  Later she said it was maybe around   May 2017 they found out that her teller ID had changed. 

117.	For convenience I have summarised her evidence in chief and under cross-examination in Annexure A.

William Shal 

118.	William Shal has lived at Ramu Sugar since he was born.  He completed Grade 12.  His wife operates her own marketing business.  She buys from a store and retails at a market.  He has four children, Lillian (7 years old), Jasmine (6 years old), Samson and Macwilliam.

119.	Between 2014 and 2017 he was the Chief Cashier at Ramu BSP.  As Chief Cashier he was responsible for looking after the cash from Gusap. He had two cashiers working under him, Reinert Waira and Patricia Maso.  

120.	After his appointment in 2103 he received one hour of training in the morning and one hour in the afternoon.  He was employed and they started working and during that time they undertook training.  In the morning session, between 8 am and 9 am, there was a slide show where the slides contained notes.  In the afternoon as well.  Between 4 to 5 pm. 

121.	In the afternoon before going home he would “balance up”.  He would count up the cash on hand and write it down it in the Teller’s Cash Book, confirm the figure on CDS Teller.  The figures must balance.  After balancing he handed the report over to his OIC to confirm the total figure and to send the confirmed figures down to the managers in Lae.  Apart from himself checking the balance, only the OIC confirms the balance.  There is no other system at the bank.  There are no other balancing processes, weekly or monthly for himself.  He does a daily balance and the next day the managers cross-check to confirm the total figure. 

122.	Four of his children have accounts with the bank.  Profit from marketing is deposited into the children’s accounts.   The frequency of deposits depends on the profits they make.

123.	He worked with BSP from 2014 to 2017.  During those years he served many customers. The conducted very large transactions The highest he ever did was a deposit of K150,000 for Ramu Agri. 

124.	His job came to an end in July 2017.  He was working with Patricia.  The area Manager, Dennis Lambus, Frieda Isembo, William Tarabu, came to Gusap and told him that there are some till differences and they were there to investigate.   Frieda Isemba told him to stop work so that she can balance up his cash.  She asked him to stand aside and she went on to count the cash.  She counted all the cash under his custody.  After counting she balanced up.  She then wrote down the cash figure in the cash book, and then confirmed the figure on the system.  After confirming the figure she went on to balance.  There were no errors or shorts, everything was alright and she suspended him for two weeks. Then Mr Lambus said they would do an investigation regarding the till difference so they suspended him for two weeks.   He is still under suspension as far he knows.

125.	Under cross-examination he said he was familiar with the CBS System but the only section he knew about was the deposits, withdrawals and balancing.  He agreed that his cash balance on any day would depend on deposits and withdrawals during the day.  He agreed that he would enter customer deposits into CBS System which then contributes to the general ledger figure.  And that also applies to the withdrawals. And that the cash on hand should balance with cash on hand reported in the CDS.

126.	He agreed that as the teller he was the one who filled in the teller specie book because that is a record of his till.  A(3) is the Teller Specie Book he filled out for 16 January.  His signature appears towards right hand side at the top in blue ink.  The signature in red ink is that of OIC, Michael Yakip.   According to his record the cash on hand was K776,552.80.    

127.	The words “Diff K116,966.55” was noted by head office.  He is not aware of it.  He denied that was the actual difference recorded for the till on that day.  When showed the difference between the Teller Cash Report he said it was not his job to balance up with that.  His job was to balance with CDS.

128.	He agreed that it is bank policy that his till is only ever opened and closed in one day.  He said it was not possible to open a second session, the computer would just freeze.  He was familiar with Exhibit B, the Teller Transaction Log, containing all transactions for a teller on any given day.  It is printed out by the OIC.

129.	When showed the second session on Exhibit B, he denied that he operated it.  He similarly denied operating a second session as shown in Exhibit F.  He agreed he prepared the Teller Specie Book Exhibit E. 

130.	He is aware of the “no cash, no card” policy but when the ATM is down they usually serve customers manually.  They only assist by filling the withdrawal form for illiterate customers.

131.	With respect to Martin Eka and Daniel Naria’s transactions he processed them even though the signatures did not match the specimen signatures because he knew the customer and the customer was present.  He conducted the deposits to his children’s account himself.  Sometimes he asked other tellers to do it.   As to whether the numerous deposits to his daughter’s account in January 2017 he could not recall because it was a long time ago.  He initially agreed that there was no deposit slip but then maintained that the system required the voucher to be scanned so the vouchers would be there.  He denied that he conducted deposits to make up for the shortfall of missing cash.

132.	In re-examination he said that if he breached bank policy then “they will counsel me, or send me for training, or if I continue to do the same thing I can be terminated”. Despite this  he went on to assist Daniel Naria even though he was in breach of the bank’s policy because “” I know him and also it’s the customers service, I have to serve him in whatever way he is in need”.  He was never disciplined by the bank.  As to why he had forgotten one customer he said he served a lot of customers every day and it was a long time ago.

133.	Refer Annexure B for a summary of his evidence regarding specific transactions.

Michael Yakip

134.	Between 2014 and 2017 Michael Yakip was employed with BSP, Ramu Branch. He finished Grade 12 in 2009. He was accepted into UPNG and completed the first year of Business Management in 2010, but was unable to complete following the death of his father.

135.	As Officer in Charge of BSP Ramu, Sub-Branch he was in charge of bank operations.  In addition he was responsible for processing personal loans, looking after the ATM, sales, opening new accounts and going out for visits.  So he had four different type of jobs.  At the main branch, there were separate sections and managers looking after each role.  So a lot of the time he did not stay in the office.  

136.	He was trained as a teller. He was not given any training as OIC. Staff from Lae conducted training.  In the morning they provided a one hour power point presentation of notes using a projector.  In the afternoon the same training.  Training lasted two weeks.

137.	With respect to deposits and withdrawals, tellers are responsible and work with each of their tills. The teller conducts the withdrawal and deposits.  As OIC he oversees the job that the tellers are doing. The only time the tellers refer a situation to him is when they realise that the money is over their withdrawal limit.  Tellers are authorised to conduct withdrawals up to K2000. Above K2000 the withdrawal is referred to him with documents for him to approve before they conduct the withdrawals. Management never told him that he had a limit.  There are no written documents with such an instruction.  

138.	Ramu serves lot of customers, including working class people, surrounding business houses, Ramu Agri, Kainantu Mining, and all the people in the villages.  They serve all walks of life but most are illiterate. 

139.	During the course of his term, customers come to the bank during an off week with K20,000, K17,000 to do deposits.  During pay week customers came to deposit K50,000, K60,000.  They also conducted large withdrawals of K60,000, K100,000, which he approved.

140.	 In the daily operation of the bank, the tellers balance up at the end of the day.  At 3pm they close up.  The tellers would collect all their money in their till for that day.  They themselves will count it and cross check with the system.  They must make sure that the figure of the cash on hand and the CDS figure are the same.  After they balance up and confirm, they will call him. He will go and check that money again and make sure the money is correct.  When he checks and the amount is correct and balanced, then they lock up the cash.   In locking up the cash, the cash is under each teller’s control and custody.  They put the cash into their separate tins and those tins are taken and locked up in the safe.  Each tin has the teller’s name and is locked in a separate section in the safe. 

141.	As the OIC, he manages the cash between Lae Top Town and Ramu Branch:  the Head Office of Port Moresby has a compliance team. They monitor the system.  When they see that the money has gone to a K1m, because Ramu branch does not have proper security, they send an email to him and Lae Top Town to arrange transfer of the money to Lae.  He follows instructions from Lae and instructs his Chief Cashier to pack and prepare all the monies.  He organises an escort with police and officers from Lae come to escort the money back to Lae.  The staff in Ramu start all over again with K50, 000 or K100,000.

142.	Given his responsibilities, every day he would stay in the office about 3 to 4 hours but most of the time he goes out. Sometimes he goes out in the morning and return in the afternoon.  As the OIC he is required to open up the bank.  He is also required to be present to close the bank.

143.	The bank is in a container building.  The tills are located at the front of the building. He sits at the back.  There is nothing in between the tills and himself like a wall.  If he goes on leave or is ill, Patricia Maso is his 2nd in Charge.   When he was out doing other duties, there would be no one to approve authorisations for withdrawals above K2000.  

144.	The bank services between 200 and 300 customers on a daily basis when busy, which includes several months a year, and both pay and alternate weeks. There is one ATM in Ramu Sugar.  It is at the bank and it is the only one. 

145.	He was on annual leave in June 2017 in Kandep. Dennis Lambus, Area Manager, called him and asked him to come down to Ramu.  He went to the bank and Dennis told him that there were differences on William’s till and suspended them both.   He went home and after two days he was sent to Buimo prison. Nothing was explained to him. Before he went on leave he balanced up everything for the bank.  Even the people from Lae came and he did cash count with Frieda Isemba and after that he received his annual leave and left.   He does not know why he is before the court.

146.	The cash count takes place at the end of the month.  Lae Top Town come, including Frieda, to do all the checks for the bank.  They count up all the money in the bank to confirm that the cash and the records are correct.  This happens at the end of every month. 

147.	Every day the tellers balance up between 3 to 4pm.  After they submit the specie book to him.  They lock up the cash and he then photocopies the specie book and emails it to Lae Top Town.   The officers cross check and confirm in Lae.  They then advise him that everything is okay.  It is a daily routine for the tellers and himself.  

148.	Every morning at 8 am the IT at Head Office in Port Moresby call and give him the combination for the safe at Ramu Sugar.  He opens the safe.  In the afternoon they give him the combination and he closes the safe.  

149.	As the OIC he is aware of the complaint against Reinert Waira by Silas Gilmai.  As part of the normal process of the bank he asked Reinert Waira to write a statement.  After that the Branch Manager, Lae Top Town, Agnes Mark, came up and warned her and wrote off that K10,000, meaning the bank reimbursed that amount of money. He does not know what gave rise to the complaint but Gilmai complained that his money is missing.    

150.	As to Ms Isemba’s evidence that he exceeded his limit to authorise transactions, the previous managers regularly came to Ramu and conducted checks but none of them told him that he had gone beyond his limit or put it in a report in black and white.  He was given no such warning or advice so he thought he was authorised to do so because that was his job.

151.	They recalled him and told him there was a till difference on William’s till.  He was suspended and he does not know what happened to the investigation of the difference.   When he was working there he only heard from people in Lae that there were till differences.  He only has limited access to the system himself.  He understood that the effect of the error was that actual cash balanced out but the system would “throw you out”.  Reversals were done by people in Lae. 

152.	During his term there were problems with the bank’s system.  The main server for the Sub-branch was blown out.  They stopped working for one month and two weeks until the new server was fixed by Port Moresby IT.  After that they did face some new problems.  Till numbers for the tellers changed.  For example Reinert Waira was till number 8302 and Patricia Maso was 8303 but the numbers were exchanged but they remained to use the same teller stamp with the teller number.  That was the only problem.  Otherwise everything was okay.  

153.	Under cross-examination Mr Yakip said that he reconfirms the cash in hand and the figure on the Teller Specie Book before he sends the report to Lae.  He agreed that if the system generated CDS figure does not agree with the actual cash on hand the teller would be short with cash and it would be the task of the teller and himself to reconcile the difference.  This would mean going back to all deposits, all withdrawals and counting all the cash to cross check everything.  

154.	He has access as a supervisor that allows him to override.  

155.	The monthly checks done by the Lae Branch are not limited to the cash.  They do check the deposit slips and withdrawal transactions as well.  

156.	He agreed that he was busy out of the office about half the time and that when he is not there, there is no one to authorise transactions above K2000.  But then said, Patricia Maso stands in for him. She was appointed by Lae Branch to be Second in Charge.

157.	The training only taught them the general process of banking.  They did not teach them how to correctly fill in the deposit slip.  “They” generalised everything.   Even though by 2017 he had two years’ experience as OIC he don’t know about the things in the computer, regarding the shorts of the money, and surplus.  He was only taught on the general use of the bank system.

158.	He agreed that when a teller opens a session, they only operate one session in a day.  That means that the till is opened only once in the morning and closed off in the afternoon.  

159.	Exhibits A1-A3:  He has never come across A1, the Daily Balance Cash Report. The teller does not balance up with this.  Perhaps it is compiled for the second day checks by people in Lae.  He only had limited access to the bank’s computer system and does not have access to the General Ledger.  

160.	When he did a surprise cash count, the teller actual cash balanced with the CBS.  The figure the main branch got was from the General Ledger, where “the system normally posted the cheques”.  But the teller did not experience a shortage at the time.

161.	Exhibit B, Teller Transaction Log report dd 16 January 2017.  He agreed that it shows all the activity of a teller on that day.  He also agreed that only one session was operated during a day by a teller.  He disagreed that his supervisor user name and password gave him the authority to override entries into the CBS system.  He would only go into override when the teller goes beyond his limit of K2000, meaning reversal of transactions in the computer system.  That is if the teller has posted money to another account, or has done other things not correctly he would go in at the counter to override. 

162.	Operating a second session is against bank policy.  It is possible for a teller to re-open it but they cannot do any changes.  Once he had closed the branch, if the teller tries to open it again that is when it will need assistance from override supervisor.  He agreed that this is what Exhibit B showed at p 32872 and that a second session was operated.  But then said that the system will not allow any changes to be made.  It will freeze.

163.	He denied that as OIC he never experienced any cash shortage from his three tellers.  There were no differences in cash but differences in the till.  

164.	He denied that to cover for that missing cash they were processing unauthorised transactions in the form of withdrawals and deposits.  He was surprised to see Daniel Naria, Silas Gilmai and Keao Pea in court.  They never complained. 

165.	As to the numerous deposits he made to his own account during March, he asked the tellers to do them because he does not have a till.

166.	In re-examination he maintained that he did not have access to the General Ledger.   As to “till difference” he is referring to the situation where the cash with the teller balances but the system would throw out the General Ledger when main branch does the second day check. It can only seen by those at HO.  The people from Lae “always tell me that those cheques posted in Goroka, Kavieng or Lae Top Town, do sometimes hit the tellers till for Ramu Branch so they do reversal.  I don’t know how they do it”.  

167.	Refer Annexure C for his evidence regarding specific transactions.

Akaiya Eomu

168.	 Akaiya Eomu was employed with BSP since 2003.  He joined as a teller.  In 2015 he was the Branchless Banking Sales Officer.  He did awareness on the bank’s products and services, and conducted visits to Lae Top Town’s subbranches in Morobe:  Kabum District, Muching, Markham Valley and Gusap, Ramu. He was appointed to look after Ramu in early 2015.  He conducted end of month cash counts, with another officer, for Ramu from 2015 until he was terminated in relation to this case.

169.	He was part of the initial investigation into till differences in Gusap.  It was discovered that even before the three tellers started using the tills at Gusap there were transactions going into those three accounts.  

170.	They came to realise that the till numbers 8301, 8302 and 8303 corresponded with branch numbers for BSP Goroka, Kavieng, and Lae Top Town, respectively.   When a customer presents a cheque, the first thing the teller does is put the cheque through the scanner and the scanner reads the security feature, the cheque number, branch number, and the drawer’s account number on the cheque.  The teller inputs the amount.  The main reason for the cheque to be deposited is to debit the drawer’s account and transfer funds to the payee.  Instead of the scanner reading the account number it read the branch number as the account number and so instead of funds coming out of the drawer’s account the system debited accounts Gusap Till Accounts 8301, 8302 or 8303.  It was not for all cheques but for certain cheques and BSP clients operating accounts at those three branches.

171.	This transaction would appear in the processing teller’s log on the system.  That log captures all transactions on that day, the amount, and also when the cheque put through scanner the image of the cheque was also captured on the system.  It is captured and stored on Bizeweb.  

172.	So for Goroka Branch, a few cheques from EHP Provincial Treasury Account and Asaro District Treasury Account. For Lae Top Town for 8303:  Police Savings and Loans Society and Agri Mart.  They are examples. 

173.	The person comparing the figures on the teller specie and the system would see the difference.  The report is called the Teller Cash Report.   The difference would be picked up in the reports going to Lae.  He cannot recall the till difference for each till but the total was about K2m.  

174.	The investigation team comprised William Tarabu, Joyce Tomaline and himself. The investigation started towards the end of 2015, 2016 and was ongoing.  The remaining balance at time of his termination was K600,000.  The balance reduced because the three of them got a till account each and identified which debit went in and then printed out the cheque that was captured on Bizeweb and confirmed that the cheque was never debited from the rightful drawer.  They then manually debited and credited the till accounts at Gusap to offset the amount.  That process was referred to as a “reversal”. 

175.	He was terminated around three months later.  He was terminated on the basis he appointed to look after the Sub-branches but did not perform as expected and K600,000 went missing.

176.	Joycelyn Tomelin was Branch Training Officer at that time.  William Tarabu was a Branchless Banking Sales Officer.  The Deputy Branch Manager was John Kalai before Frieda was appointed.  

177.	During his time he observed that the till balance and actual cash never balanced.  But at the end of every month there was a full branch cash count.  And from time to time a surprise cash count.  The specie book and the cash agreed with the cash counted.  But compared with the balance given on the system it never balanced.  The end of month cash count never balanced.  And because the teller’s cash book never agreed with the system generated balance in the daily reports they were asked to investigate.  

178.	The system generated balance was always more than actual cash because as they were conducting the reversals they were reducing the amounts debited out in error. 

179.	In cross-examination he said that the till difference issue had been cleared up for the most part by the end of 2016 but reversals were still ongoing in 2017.  He agreed that a teller has a K1000 withdrawal limit, above which verification and authorisation required.  He was not sure if the OIC’s limit at Gusap was K2000.   He agreed that a teller only operates one session in a day and the figure cannot be changed after that.  

180.	As a teller he received training in how to complete withdrawal and deposit slips. And training on how to compare specimen signatures.  If no match a query should be raised unless the customer was known or additional identification obtained.  It is not compulsory to sign on the back of the slip unless the specimen is not the same.

181.	He said that the till could not be opened after closing.  When shown the second session in Exhibit B he agreed the figures were different from the first session.  He had never come across one before.  It is not supposed to happen.

182.	He denied that he was giving evidence because he was angry about his termination.   Before he left the bank he told his team leader and immediate supervisor that he did nothing wrong and that he will go on with life.  He was not coming to testify against the bank but to assist the court with information that there was an existence of system generated error.

183.	In response to a question from the Court he said that the reversals would appear in the AS400 but not on the Teller Transaction Log.  The funds would show on the Teller Cash Report but not on the Teller Transaction Log.

ASSESSMENT OF WITNESSES

184.	In evaluating the witnesses, I have considered their credibility, that is, their honesty and their reliability based upon a consideration of their evidence in the context of the case as a whole, and bearing in mind that I may choose to accept or reject, in whole or in part, the evidence of any witness.

185.	I was impressed by all of the State witnesses and accept them as honest and reliable.  The evidence of Ms Isemba and Ms Garalom goes primarily to the production of business records, which the defence does not dispute, and the systems and processes in place at the bank governing the processing of transactions, the management of cash, and other reporting and compliance matters, which is also not in itself disputed. Rather the accused dispute their knowledge of some of those compliance matters.  Whilst not led from them in evidence in chief, each of them responded frankly and openly to questions about the systems error in the bank.

186.	Daniel Naria, Silas Gilmai and Pie Keao also impressed me as very honest witnesses.  Their evidence was straightforward and they openly agreed about what matters they could not be sure.

187.	Having heard and observed each of the accused persons in the witness box, I am unable to accept any of them as witnesses of truth.  This is based on a combination of my assessment of their demeanour when giving evidence together with the content of that evidence.  In many cases I find their ability to recall the detail of specific transactions, amongst hundreds dealt with on any given day, implausible, as are many of their explanations for those transactions.  I will deal with particular transactions below. 

188.	I make it clear, however, that I take account of my findings on their truthfulness in relation to the credibility and the reliability of their evidence only and for no other purpose. Each of the accused gave evidence although they were not obliged to do so. By entering the witness box and giving evidence they did not take upon themselves any obligation to prove anything in this trial.

189.	The State has asked me to reject entirely the evidence of Akaiya Eomu on the basis that he is motivated by malice against the bank because he was fired in relation to the same shortages for which the accused are now charged.  I don’t agree.  His evidence is largely consistent with the State’s case and in particular with the evidence of Ms Isembo and Ms Garalom regarding both bank procedure and critically, the existence and effect of the systems error.

SUBMISSIONS

190.	Both counsel provided written submissions, which they spoke to during oral argument.

191.	The State’s case was initially conducted on the basis that bank records established cash shortages of about K1.88m and that an investigation into the shortages revealed a corresponding total of about K1.81m in unauthorised withdrawals and deposits, which the accused, acting together, conducted to hide the cash takings.  

192.	As below, the State conceded that the amount of cash shortage was in fact much less, although still a very substantial amount, of about K380,000 (but c.f. my calculations below).  Furthermore, that the effect of the evidence of Ms Isemba and Ms Garalom was that the four accused were acting together to falsify withdrawals and deposits to hide the cash taken.     

193.	The defence argued that the State have failed to prove beyond reasonable doubt that physical cash was missing. 

194.	The accused do not take issue with the bank’s records.  In general terms they admit that they conducted the transactions and that they involve multiple compliance breaches but they don’t agree that the transactions were conducted fraudulently or without customer instructions.  Ms Isemba and Ms Garalom have assumed that there were unauthorised transactions because of the breaches but the accused never received any proper training in how to perform their work.  They were not issued with any manuals and only received two hours of training a day for the first two weeks of their employment.  They held a reasonable belief as to their financial limits and conducted the transactions in accordance with their practice since their recruitment, and in respect of which no one from Lae Branch had ever corrected or disciplined them.   They believed that they had a limit of K2000 and above that they had to go to the OIC.

195.	Critically, they argue that any differences found between cash holdings and the bank records can be explained by the longstanding systems error whereby the amounts of cheques posted in Goroka, Kavieng and Lae Branches were debited to the Till Accounts of T8301, 80302 and T8303, respectively, instead of to the relevant customer account, thereby affecting the cash balance of each of the accused.  Furthermore, that  Ms Isemba agreed that the error had been in place long before she arrived in Lae, and that there was an investigation being conducted into the systems error concurrently with the investigation into the cash shortages at Gusap.  The bank was working to resolve the systems error and reversals were ongoing up until after July 2017, and after the period the subject of charges.  

196.	In this regard when Ms Isemba and her team conducted a surprise cash count in June the cash on hand balanced with the cash recorded in the teller specie books.  There were surprise cash counts and end of month cash counts that always balanced.  The level of cash holding of Gusap was monitored from Port Moresby, and the safe was secured with the changing of combinations to open it every day.

197.	Ms Isemba was prompted to conduct an investigation upon discovering the operation of a “second session” by William Shal and she assumed that there was physical cash missing.   She had conceded, however, that it was not possible to make adjustments once a till was closed.  As to any override by the OIC, Michael Yakip said that was confined to transactions at the counter.

198.	Furthermore, it is not in dispute that there were no complaints from customers about missing monies, and that the three witnesses who were called by the State are unreliable.

199.	Finally, that it is against common sense that such a large amount of cash, K1.8m could go missing within a six month period.

CIRCUMSTANTIAL EVIDENCE 

200.	The evidence relied upon to establish some elements of the alleged offences in each case is circumstantial.  The principles governing such cases are well established.  In a case resting wholly or substantially upon circumstantial evidence, an accused cannot be found guilty unless the prosecution has excluded all rational hypotheses consistent with innocence; that is the guilt of the accused must not only be a rational inference, but the only rational inference in all of the circumstances: Paulus Pawa v. The State [1981] PNGLR 498 approving The State v Tom Morris [1981] PNGLR 493, adopting Barca v The Queen (1975) 50 ALJR 108 quoting Peacock v the King (1911) 13 CLR 619.  See more recently Maladina v The State (2016) SC1495.  

201.	For an inference to be reasonable it must rest upon something more than conjecture.  The bare possibility of innocence should not prevent a finding of guilt: Paulus Pawa v. The State (supra).  

202.	The evidence must be considered as a whole and not by a piecemeal approach to each particular circumstance: see Paulus Pawa (supra). The essential elements of the offence must be proved beyond reasonable doubt but it is not necessary for every fact, or every piece of evidence, relied upon to be proved beyond reasonable doubt: see The State v Charles Andrew Epei (supra) considering Shepherd v R [1990] HCA 56; (1990) 170 CLR 573 at [6].

MISAPPROPRIATION  

203.	In view of the nature of the State’s case and the critical issue of the bank’s ongoing systems error, I intend to deal with Count 2 in the indictment first. 

204.	Briefly I note that the indictment contains a joint charge of misappropriation.  It is the case that it avers that a very large sum of money has been misappropriated but it is not suggested that the charge is duplicitous.  Essentially the allegation is that there was one criminal enterprise whereby the accused applied cash monies to their own use under a scheme which sought to use multiple transactions in and out of various accounts to disguise the taking of physical cash. (Such schemes are sometimes referred to as “skimming”.)  As stated in Director of Public Prosecutions v Merriman (1973) AC 584:

"Where a number of acts of a similar nature committed by one or more defendants were connected with one another in the time and place of their commission or by their common purpose in such a way that they could fairly be regarded as forming part of the same transaction or criminal enterprise, it was the practice, as early as the eighteenth century, to charge them in a single count of an indictment".

205.	The principles governing duplicity and the provision of particulars are well established:  see Roland Tom and Kalen Kopen v The State (2019) SC1833;  Johnson v Miller (1937) 59 CLR 467.  The principles are designed to enable an accused to know the charge brought against him and essentially to prevent unfairness and prejudice.  It has been well understood from the commencement of the trial that the charge relates to the application of cash monies.  

206.	I also note here that a charge against two or more accused is joint and several.  If in the case of any particular accused the evidence at trial proves that he was guilty of the offence but was acting on his own and not in concert with any other he can nevertheless be convicted on the count as laid:  Merriman (supra).  

207.	Similarly, an accused may only be convicted to the extent that the evidence establishes their participation in the alleged offence pursuant to s. 7 of the Criminal Code. 

Elements of the Offence

208.	 Section 383A of the Criminal Code creates the offence of misappropriation:
(1) A person who dishonestly applies to his own use or to the use of another person–
(a) property belonging to another; or
(b) …
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 a term not exceeding five years except in any of the following cases when he is liable to imprisonment for a term not exceeding 10 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 K2,000.00 or upwards.
(3) For the purposes of this section–
(a) property includes money and all other property real or personal, legal or equitable, including things in action and other intangible property; and
(b) a person’s application of property may be dishonest even although he is willing to pay for the property or he intends to restore the property afterwards or to make restitution to the person to whom it belongs or to fulfil his obligations afterwards in respect of the property; and
(c) a person’s application of property shall be taken not to be dishonest, except where the property came into his possession or control as trustee or personal representative, if when he applies the property he does not know to whom the property belongs and believes on reasonable grounds that such person cannot be discovered by taking reasonable steps; and
(d) persons to whom property belongs include the owner, any part owner, any person having a legal or equitable interest in or claim to the property and any person who, immediately before the offender’s application of the property, had control of it.

209.	To establish the offence the prosecution must prove beyond reasonable doubt the following elements, such that the accused:

a)	applied; 
b)	to his own use or to the use of another; 
c)	property; 
d)	belonging to another person; 
e)	dishonestly. 
Havila Kavo v The State (2015) SC1450.
Key Findings of Fact  
210.	It is not in dispute and I find that each of the accused were employed at BSP Gusap Sub-branch during the relevant period.  Michael Yakip was the OIC, William Shal was Chief Cashier and Teller, and Reinert Waira and Patricia Maso were both Tellers.  They were the only staff based at the Sub-branch.

211.	As OIC, Michael Yakip was in charge of all operations and customer service at the Sub-branch.  

212.	As Chief Cashier, William Shal was responsible for holding the bulk of the Sub-branch cash.  

213.	In the bank the three tellers stood in a row, about a metre between each of them.  A wall divided each of them, up to about chest height.  The OIC’s table was located about one metre behind in the middle.  There was no wall between him and the tellers. 

214.	The Sub-branch served all types of customers, including very large business houses, surrounding small businesses, schools, churches, and people from the town, village and settlement.  Many customers were illiterate.

215.	The four accused grew up in Gusap and were familiar with the bank’s customers, including those who were illiterate. 

216.	Whilst the State did not produce a bank record showing the allocation of till numbers, I also find that:

a)	William Shal was Teller No. 1, holding unique teller identification number T8301 on the bank’s AS400 system, and teller stamp T801;
b)	Patricia Maso was Teller No. 2, holding unique teller identification number T8302 on the bank’s AS400 system, and teller stamp T802; and
c)	Reinert Waira was Teller No. 3, holding unique teller identification number T8303 on the bank’s AS400 system, and teller stamp T803.

217.	I reject the evidence of Reinert Waira, and Michael Yakip, that prior to sometime in May 2017 Reinert Waira held unique teller identification number, T8302 and Patricia Maso, T8303, when the bank’s system, following a crash, and unbeknown to any of them, swapped their teller identification numbers, but they did not realise and carried on using the old stamps.  Ms Isemba and Ms Garalom both gave evidence as to the respective till numbers of each accused.  The matter was not put to either Ms Isemba or Ms Garalom in cross-examination.  Nor was evidence led of it from Ms Maso.  In their respective records of interview Ms Maso and Ms Waira stated their teller identification number whilst working at Gusap was 802 and 803, respectively.  

218.	Each of the accused was aware that when a teller processes a deposit through their till they are to check the date, the customer name, the account number and that the amount of cash to be deposited corresponds with the amount stated.   The teller has to initial the form. There is a box on the deposit slip for bank use in which the teller is to record the number and denomination of cash deposited.  The teller accepts the cash, and enters the same details on the bank’s system.  An automatic pop up will then require the teller to scan the slip into the system. If the image does not scan properly the teller may delete but will have to repeat the process.  Once complete a receipt will automatically print out.  That receipt is attached to the customer’s deposit slip and returned to them.  

219.	A manual withdrawal is conducted using a red slip in circumstances where a customer does not have their card with them or the amount exceeds K15,000.  Each of the accused were aware of the bank’s “no cash, no card policy”.  The only customers that are allowed to use withdrawal forms are group account holders, like small sports clubs, church groups and family group accounts.  Personal customers are only allowed to do so when they are waiting for their card to be issued. The policy applies nationwide including at sub-branches.  If the amount exceeds K2000, which is the maximum amount that can be withdrawn from an ATM on a daily basis, but is less than K15,000 the teller will assist the customer to make the withdrawal using the card and not the withdrawal form.  If the amount is greater than K15,000 then a form will be used because the eftpos system will decline to issue such an amount.  However, the customer must still have a Visa or Kundu Card with them. The accused were each aware (at least) that withdrawals above K2000 required the OIC’s approval.

220.	All transactions processed through a till are captured on the bank’s CBS Teller System.  The system will not process the transaction unless the physical withdrawal or deposit voucher is scanned.  Scanning is not required, however, in the case of a deposit to a savings account.  

221.	All transactions processed by a particular teller through their till are reflected by the system in the daily Teller Transaction Log.

222.	The figures contained in the Teller Transaction Log contribute to the General Ledger figures for both an individual teller and the Gusap Subbranch.

223.	Access to the General Ledger is restricted to managers or team leaders.  There was insufficient evidence to establish that any of the accused had access to the General Ledger.  

224.	The accused were not provided with any manuals and only received two hours of training per day for two weeks upon employment with the bank. 

225.	There were multiple compliance breaches established on the bank’s records.

226.	Prior to suspension, none of the accused were counselled or disciplined for the compliance breaches.

227.	When the Gusap branch closed every day each of the tellers was required to “balance up”, that is to count the amount of actual cash on hand and write this down in their Teller Specie Book, according to denominations, and sign as correct.  The cash on hand figure was required to balance with the same figure showing on the bank’s CBS Teller System.  The Teller Specie Book was provided to the OIC, Michael Yakip, who was also to count and confirm the cash, and that the figure balanced with the figure on CBS.  The OIC was then required to send the Teller Specie Book to the Lae Branch.

228.	If there was any discrepancy, however, both the teller and OIC were required to recount the cash again.  If a difference remained, any surplus or shortage was to be reported to the Lae Branch.

229.	Each teller placed their cash on hand in their own tin box and placed it overnight in the safe, which was locked in the presence of the OIC, using a unique combination, provided to two staff  by IT via phone from Port Moresby.  The following morning the tins of cash were retrieved by each of the tellers from the safe, which was again opened upon the provision of a further unique combination. 

230.	In the morning the Lae Branch conducted “second day checks”.  An officer in Lae was responsible for comparing the total cash reported in the Teller Specie Books as being on hand against the system generated “Teller Cash Report” for each teller and reporting any difference.

231.	Surprise cash checks (one as reported by Michael Yakip and one according to Ms Isemba in June 2017), and end of month cash counts (one according to Ms Isemba), were conducted at the Sub-branch during which the cash on hand balanced with the amount reflected in the teller specie books. 

232.	There was a longstanding systems error in the bank such that in some cases when cheques were deposited in Goroka, Kavieng and Lae Branches a corresponding amount was debited from the till accounts of T8301, T8302 and T8303, respectively, affecting the balance of cash holdings as reported in the Teller Cash Report on the General Ledger.  The error had been in place since Gusap became a Sub-branch. 

233.	As a result there were, in the words of Akaiya Eomu, “always” differences between the cash reported as being on hand by the Sub-branch and the amount of cash that should have been on hand according to the General Ledger.  According to both Ms Isemba and Mr Eomu there were differences of between K1 and K2m.  

234.	The bank was running an investigation and reconciliation process into the systems error.  The posting error had been stopped towards the end of 2016 but the bank was still in the process of reconciling or reversing monies back into the accounts of the Gusap tills in 2017, and this continued beyond June 2017.

235.	Akaiya Eomu, who had trained the four accused, and regularly travelled to Gusap, was a member of the team responsible for investigating and reconciling the systems error.  

236.	Michael Yakip by his own admission in evidence was aware of the longstanding systems error, also referred to as “till differences”.

237.	Other than Silas Gilmai there were no complaints from customers about money missing from their accounts. 

William Shal 

238.	The State’s case was initially brought on the basis that the bank’s investigation had revealed shortages in the physical holdings of cash in the till of William Shal, T8301, for the dates:  16 January, 30 January, 9 February, 13 February, 15 March, 27 March, 3 April and 20 April 2017 totalling K1,882,011.94 (Exhibits A1, C1, E1, G1, I1, K1, M1 and O1).   

239.	The issue of the longstanding systems error is critical to the State’s case.  It goes without saying that the State must exclude any rational inference that the systems error was responsible for the cash shortages reported in his till.   

240.	The “differences” between the Actual Cash Holdings figure reported in William Shal’s Teller Specie Book and the General Ledger figure, as calculated by William Tarabu, for the above dates is reflected in the 6th column of the table below.   Having analysed the records I am satisfied that the “differences” reported by William Tarabu are incorrect. In each case Tarabu has compared the “Cash In” balance contained in the Teller Cash Report with the actual cash holdings reported in the Teller Specie Book.  (It is incorrect because it fails to take account of the cash that went out through the till that day and any cash that was on hand at the beginning of the day.)

241.	Rather, the actual cash shortage is determined by comparing the “Cash Ending” figure at the end of Session 1 in the Teller Transaction Log with the total cash on hand reported in the Teller Specie Book: see column 3.  In every case below the Teller Transaction Log shows that a second session was opened after Session 1 was closed on that day.    

242.	The State now concedes this, albeit that the figure referred to in its submissions (K380,531.80) is somewhat different to mine calculated below.  This approach is also consistent with the evidence of Ms Isemba and the figures she calculated and wrote on the Teller Specie Books as to the actual cash missing.  

Date	Ending Cash as shown in Teller Transaction Log for Session 1  	Total Cash as reported in Teller Specie Book	ACTUAL CASH SHORTAGE:
Difference between Ending Cash in the Teller Transaction Log and Total Cash reported in Teller Specie Book (Column 2 less Column 3)	GL Balance as reported in Daily Balancing Sheet Compiled in Lae	Difference between Actual Cash and GL balance as reflected in the Daily Cash Report 	
16.1.17	K837,599.60 (Exhibit B, p 32870)	K776,552.80
(Exhibit A3)	K61,046.80  	K893,519.35  (Exhibit A1) 	K116,966.55
(Exhibit A)	
30.1.17	K593,653.65
(Exhibit D, p 30251)  	K563,653.65
(Exhibit C3)
	K30,000 	K710,620.20
(Exhibit C1) 	K146,966.55
(Exhibit C1)	
9.02.17	K527,614.90
(Exhibit Q, p 17435) 	K523,614.90 (Exhibit E3)	K4000
	K677,581.45
(Exhibit E1)	K153,966.55
(Exhibit E1)	
13.02.17	K766,200 Exhibit Q, p 33665 	K721,713.60 (Exhibit G3)	K44,486.40
	K920,166.55
(Exhibit G1) 	K198,453.55
(Exhibit G1)	
15.30.17	K1,078,167.80 (Exhibit I3)	K1,107,167.80 Exhibit J, p 24964	K29,000	K1,305,621.35
(Exhibit I1)	K235,453.55
(Exhibit I1)	
27.03.17	K1,190,458 Exhibit Q, p33433 	K1,153,458 Exhibit K3	K37,000
	K1,425,911.55 (Exhibit K1)	K272,453.55
(Exhibit K1) 	
3.04.17	K1,170,184.87 (Exhibit N, p 35587)	K1,124,187.60 Exhibit M3	45,997.27	K1,442,638.42
(Exhibit M1)	K318,450.82
(Exhibit O1) 	
20.04.17	K967,024.75 (Exhibit P, p 18825)	K846,174.75 Exhibit O3	K120,850 	K1,285,475.57 (Exhibit O1)	K439,300.82
(Exhibit O1)	
	TOTAL		K372,380.47		K1,881,498.95	

243.	The bank’s business records exclude any rational inference that the difference is due to a systems error.   

244.	Whilst not disputed, section 61 of the Evidence Act provides that a writing purporting to be a memorandum or a record of an act, matter or event is admissible in evidence in a court as proof of the facts stated in it if it appears to the court that the memorandum or record was made in the regular course of a business at or about the time of the doing or occurrence of the act, matter or event, and the source of information, and the method and time of the preparation of the memorandum or record were such as to indicate its trustworthiness.  In this case the documents were produced through Ms Isemba, supported by evidence from Ms Garalom, as to the process during which such  “writings” or documents are created and kept as part of the bank’s operations. The defence does not contest any of this, nor suggest that there is anything to question the trustworthiness of the documents for the purposes of s. 61(2)(a) and (b) of the Evidence Act.  The witnesses also gave detailed evidence as to the source from which the writing has been produced, namely BSP’s computer system, and the circumstances in which such documents are saved in the system for the purposes of ss. 61(4)(a) and (b) of the Evidence Act.

245.	In particular, it is not in dispute that the Teller Transaction Log captures every transaction processed through a particular till on any given day.  It is also not in dispute that the systems error did not cause changes to the Teller Transaction Logs of T8301, T8302 or T8303.  Mr Eomu’s evidence is consistent with both Ms Isemba and Ms Garalom’s in this regard.  This is because the cheque transactions were not processed through the Gusap teller’s tills but the tills in Goroka, Kavieng or Lae.  Rather the effect of the systems error was to debit the Gusap till accounts on the General Ledger and as reflected in each of the till’s Cash Report.  Similarly, when any reversals were made to rectify the systems error the adjustments were made to the till account on the General Ledger and would have been reflected in the Cash Report, not in the Teller Transaction Log, again because the transaction was not processed through the till.

246.	Furthermore, the State’s evidence has excluded any suggestion that it was not possible for the starting and ending cash figures to be altered during a second session.  As above, I do not accept the evidence of either William Shal or Michael Yakip on this point.  

247.	Nor do I accept the submission that Ms Isemba conceded that it was not possible for a teller to alter the records once the till was closed.  I have reviewed her evidence in its totality on this point and she was at pains to make clear that once the till was closed nothing could be changed unless another session was opened.  Further, that whilst it was possible for a second session to be opened, a supervisor, i.e. Michael Yakip, would have to override or approve the alteration of the figures reported.  Here the evidence establishes that the “starting cash” figure in the second session was altered (reduced) to match the cash reported as being on hand by William Shal in the Teller Specie Book. 

248.	Moreover, these facts are self-evident from the documentation, which is not in dispute.  Taking Exhibit B, Teller Transaction Log for 16 January 2017, as an example.  Page 32869 of the log records that the last transaction was at 15:08, after which the teller closed the till. “Ending Cash” for Session 1 was K837,599.60.  Page 32871 shows that Teller No 1, 8301, William Shal, operated “Session No 2” for the same day.  The same page refers to an override by the supervisor.  Unlike Session No 1, there were no transactions posted but the starting cash and “ending cash” were both reduced to K776,552.80.

249.	It also follows as a matter of common sense that only one session should ever be operated in any given day by a teller, so that all transactions can be captured during that one session and the balance of cash on hand automatically generated.  The accused do not appear to dispute this.  Both Ms Isemba and Ms Garalom both said that they had never seen a second session before in their time at the bank.  Mr Eomu expressed the same surprise upon being shown Exhibit B.  In his words: “It is not supposed to happen”.   

250.	As to the fact that cash on hand balanced with what was reported in the teller specie book at any surprise or other cash counts, as Ms Isemba explained that was only “half the picture”, as the issue was whether what the teller reported in the Teller Specie Book balanced with what should have been reported as being on hand at the end of Session 1 in the Teller Transaction Log.  Furthermore, I note here that Ms Isemba only confirmed that she had conducted one end of month or surprise cash count in June 2017 and could not speak to earlier counts.  It is clear that against that the hand written reference by Michael Yakip to a “surprise cash count” on Exhibit A3 was just part of the efforts to hide the cash taken that day.    

251.	It is the case that the bank failed to investigate the missing monies until June 2017, despite the fact the Cash Reports prepared by Mr Marabu for the dates set out above clearly referred to large differences.  Again, however, whether or not the bank failed to act earlier, is really beside the point.  It may well be that it didn’t act sooner because of the ongoing “till differences” it was experiencing due to the systems error, of which it was aware and acting to reverse.  In any event, however, the records show that the till was short of actual cash.  In addition Ms Isemba gave evidence that she could not identify the cause of the differences until she realised that a second session had been operated in each case.  It was then too that she properly inspected the physical vouchers which also revealed irregularities which I will return to below.  

252.	The fact that customers did not complain does not mean that the monies were not missing.  The bank’s records show that they were.  

253.	I am satisfied beyond reasonable doubt that the total amount of actual missing from the till of William Shal during the period was K372,380.47.  The evidence has excluded any rational inference that it was missing due to the longstanding systems error.
	
254.	I am also satisfied beyond reasonable doubt that William Shal applied those monies to his own use and the use of others, that is he took them from the cash holdings of the bank.  There is overwhelming evidence to support this inference.  As above, the bank’s records establish that the cash is missing.  Furthermore, the records show that William Shal deliberately underreported the amount of physical cash he was holding on each of the above dates.  Similarly, the false statement in his Teller Specie Book, which he completed and signed, and the operation of a second session on each of the above dates, provide strong evidence of his deliberate action.  The only rational inference in all of the circumstances is that he did so to disguise the fact that he had taken the cash for his own use and the use of others.  Certainly, he diverted the cash from the purpose of the bank, to whom it belonged: see R v Easton [1994] 1 Qd R 531 as discussed in The State v Joseph Wai (2020) N8182.  

255.	I am further satisfied beyond reasonable doubt that at the time William Shal applied the cash monies to his own use he did so dishonestly. In determining this issue I have applied the test set out in Havila Kavo (supra) affirmed in Wartoto (supra): 
“Element (v) of the offence of misappropriation, which requires the court to be satisfied that the accused applied the property “dishonestly” to his own (or another’s) use, requires a determination of the state of mind of the accused at the time of application of the property. Both the appellant and the respondent agree that dishonesty is a question of fact for the trial Judge to determine, based on the facts of the case and according to the ordinary standards of reasonable and honest people (Brian Kindi Lawi v The State [1987] PNGLR 183).
A subjective test must be applied: it must be proven beyond reasonable doubt that the accused in fact knew that he was acting dishonestly. However, in applying that test, an objective standard can be taken into account: it might reasonably be inferred that the accused must in fact have known that he was acting dishonestly (James Singo v The State (2002) SC700, The State v Gabriel Ramoi [1993] PNGLR 390, The State v Francis Natuwohala Laumadava [1994] PNGLR 291, The State v Andrew Ludwig Posai (2004) N2618, The State v Graham Yotchi Wyborn (2005) N2847, The State v Francis Potape (2014) N5773).”

256.	I am satisfied beyond reasonable doubt that it was dishonest according to the ordinary standards of reasonable and honest people for William Shal, as a teller employed by the bank to take cash received from the bank’s customers and apply it to his own use in circumstances where he knew that the money belonged to the bank and should have been kept for the bank.  That is obvious to any reasonable person.  I am further satisfied beyond reasonable doubt that having regard to those standards, his education and experience, William Shal must have realised that his conduct was dishonest according to those standards.  There is no other rational inference.  

257.	I am also satisfied beyond reasonable doubt that William Shal aided and/or counselled or procured Patricia Maso to misappropriate the K50,000 cash deposited by Papindo on 19 June 2017.

258.	PM16, copy of deposit slip dated 19 June 2017 shows that the cash was deposited with the bank that morning.  PM19, Teller Transaction Log, p 32854, confirms that the monies were deposited to Papindo’s account in the morning at 1018 by T8302, Patricia Maso, and that later in the day the transaction was voided or reversed by Patricia Maso, p 32858.  William Shal admitted in evidence that he received the cash from Patricia Maso in response to his request.  He initially admitted that he was aware that she reversed the deposit but then said he did not know.  It is clear on his evidence that he did not process the monies through his own till.  I do not accept the evidence of either accused that he asked for the cash for the purpose of obtaining small notes.  

259.	To establish “aiding” for the purposes of s 7(1)(b) and/or (c) of the Criminal Code, the State must first prove that a crime has been committed by another person: R v Tovarula [1973] PNGLR 140.  The State must also establish that the accused knew the type of offence that was to be committed, including where relevant the state of mind of the principal offender.  Furthermore, that the accused did an act, or in some way assisted the principal, with the purpose of assisting or enabling the principal to commit the offence: Tovarula, supra. In addition to intention to aid, there must be aiding in fact: R v Wendo [1963] PNGLR 217.  Mere presence at the scene of a crime is not of itself sufficient but presence and wilful encouragement will suffice: Tovarula.  (See also The State v Charles Andrew Epei (2019) N7845.)

260.	I am satisfied beyond reasonable doubt that William Shal aided Patricia Maso to misappropriate the K50,000 cash monies through encouragement for the purposes of s. 7(b) and/or (c) of the Criminal Code.  For the reasons stated below I am satisfied beyond reasonable doubt that Patricia Maso misappropriated the funds to her own use and the use of others; that William Shal knew that was the offence to be committed, including the dishonest intention of Patricia Maso; that he acted with intention to aid her by encouragement; and that his action did so encourage her.  

261.	Alternatively, I am satisfied beyond reasonable doubt that William Shal counselled and/or procured Ms Maso to misappropriate the monies by giving them to him pursuant to s. 7(1)(d) of the Criminal Code. The term “counsel” is not defined in either the Criminal Code  or the Interpretation Act. The plain and ordinary meaning might be found in the context of the section, that is “urged” or “advised” or “solicited”:  as stated by Gibbs J in Stuart v The Queen (1976) 134 CLR 426; see also R v Oberbillig [1989] 1 Qd R 342 considering the equivalent provision in the Queensland Criminal Code.  Similarly, to procure, is “to obtain”, “to bring about”, according to the Oxford Learner’s Dictionary. In considering the equivalent of this provision in R v Adams [1998] QCA 64 the Court of Appeal said that procuring involves more than mere encouragement, and means “successful persuasion” to do something.  Here the evidence establishes that William Shal procured Patricia Maso to misappropriate the monies by successfully persuading her to dishonestly apply or give the monies to him.

262.	In any event, having obtained the cash monies I am further satisfied beyond reasonable doubt that William Shal then applied them to his own use and the use of others.  I am further satisfied that at the time he did so he acted dishonestly according to the standards of ordinary people and by those same standards, must have known that he was acting dishonestly.

263.	I also find that William Shal aided and/or counselled or procured Reinert Waira to misappropriate K102,000 from the accounts of Daniel Naria, Silas Gilmai and Keao Pie, discussed in further detail below.  The evidence shows a pattern of withdrawals and deposits into and out of the accounts by both Reinert Waira and William Shal, some of which were physically signed off by Michael Yakip, which I am satisfied beyond reasonable doubt were not approved by the customers.  In those circumstances I am satisfied beyond reasonable doubt that the transactions were executed in furtherance of the conspiracy to defraud the bank of cash monies through unauthorised transactions.  The customer’s evidence together with the pattern of transactions excludes any rational inference that the transactions conducted by William Shal and Patricia Waira on the same accounts were by coincidence.  It is clear they were acting together.

264.	For the reasons stated below at [291] to [302], I am satisfied beyond reasonable doubt that Reinert Waira misappropriated the funds for her own use and the use of others; that William Shal knew that was the offence to be committed, including that Reinert Waira held a dishonest intention; that he acted with intention to aid her by encouragement, and that his action did so encourage her, for the purposes of s. 7(b) and/or (c) of the Criminal Code.  It is not necessary that knowledge of intention to commit a particular offence should be proven, rather that a crime of a particular kind, namely misappropriation of cash monies was intended: see Karani and Aimondi v The State (1997) SC540.  But here given the nature and amount of the transactions in and out of the accounts of the three customers there is overwhelming evidence that William Shal knew the precise details of the misappropriation by Reinert Waira in each case. 

265.	Alternatively, I am satisfied beyond reasonable doubt that William Shal counselled and/or procured Ms Waira to dishonestly apply the monies to her own use and the use of others pursuant to s. 7(1)(d) of the Criminal Code.  Where two or more persons plan to commit a certain offence, each counsels, and if the plan is executed, procures the other to commit the offence: R v Sapulo Masuve (1973) N732.   

266.	I am satisfied that at the time he aided and/or counselled or procured Ms Waira he too acted dishonestly according to the standards of ordinary people and by those same standards, must have known that he was acting dishonestly. 

267.	It is not in dispute and I find beyond reasonable doubt that the cash monies at Gusap Sub-branch were property for the purposes of s. 383A(3)(a) of the Criminal Code, nor that the property belonged to BSP.   There is no dispute and I find beyond reasonable doubt that at the time the property was of a value of more than K2000 for the purposes of s.383A(2)(d), or that at the relevant time William Shal was employed by BSP for the purposes of s. 383A(2)(b) of the Criminal Code.

268.	On the above findings there was a variance between the amount of monies alleged to have been misappropriated and the amount established beyond reasonable doubt. The amount of monies alleged to have been misappropriated is not an essential element of s. 383A(1)(a) of the Criminal Code.  Proof that the accused dealt with any portion of the value of it is sufficient to constitute the offence: S. 530 (6) and (7) of the Criminal Code.  

269.	In conclusion I am satisfied beyond reasonable doubt that between 1 January and 31 June 2017, William Shal dishonestly applied to his own use and to the use of others monies in the sum of K524,380.47, the property of the Bank of South Pacific Limited, contrary to s. 383A(1)(a)(2)(b)(d) of the Criminal Code. The evidence led by the State to prove each of the elements of the offence is such that any reasonable hypothesis consistent with the innocence of the accused has been excluded.  

Michael Yakip 

270.	I am satisfied beyond reasonable doubt that Michael Yakip acted together with William Shal to dishonestly apply to his own use and the use of others a total of K372,380.47 from William Shal’s till on 16 January, 30 January, 9 February, 13 February, 15 March, 27 March, 3 April and 20 April 2017.  At a minimum he aided him to do so pursuant to s. 7(c) of the Criminal Code.  Certainly the offence could not have been committed without his assistance. 

271.	Michael Yakip was fully aware that William Shal had deliberately underreported the amount of physical cash he was holding on each of the above dates.  It was he who falsely certified the Teller Specie Book on each occasion as being correct before he submitted it to Lae.  In each case the bank’s records show that a second session was operated by William Shal to reduce the reported cash on hand figure.  I accept the evidence of Ms Isemba that a supervisor was required to use their override authority to approve any changes on the figures in Session Two.  The documentary evidence shows that the system was so overridden.  I am satisfied beyond any reasonable doubt that it was Michael Yakip who approved the reduction in each case and that he did so to aid William Shal to apply the cash to his own use and the use of others, knowing that William Shal did so dishonestly, and that his actions did so aid William Shal, pursuant to s. 7(b) and/or (c) of the Criminal Code.  

272.	I am further satisfied beyond reasonable doubt that at the time Michael Yakip aided William Shal he too acted dishonestly according to the standards of ordinary reasonable people.  Furthermore, given his experience and education I have no doubt that he well knew that he was acting dishonestly according to those standards.

273.	I am also satisfied beyond reasonable doubt that Michael Yakip aided through encouragement and/or counselled or procured William Shal to misappropriate K50,000 on 19 June 2017, “the Papindo monies”, for the purposes of s. 7(b) and/or (c) of the Criminal Code.  In this regard I have no doubt that the misappropriation of the funds by William Shal was in furtherance of the conspiracy to defraud the bank, discussed further below under Count 2.  There is no evidence that Michael Yakip was present when the K50,000 was taken.  It is not necessary, however, for the State to show that Michael Yakip knew that Papindo’s K50,000 would be taken on that date, rather that a crime of a particular kind, namely misappropriation of cash monies, was intended: see Karani and Aimondi v The State (1997) SC540. Here the evidence establishes beyond reasonable doubt that William Shal misappropriated the funds; that Michael Yakip knew that was the kind of offence to be committed, including that William Shal intended to act dishonestly; that he acted with intention to aid William Shal by encouragement; and that his action did so encourage him prior to the event.  

274.	Alternatively, applying the principles outlined above, I am satisfied beyond reasonable doubt that Michael Yakip counselled or procured William Shal to misappropriate the monies as part of their common purpose to take cash monies from the bank, for the purposes of s. 7(d) of the Criminal Code.  

275.	In each case I am also satisfied beyond reasonable doubt that Michael Yakip acted dishonestly according to ordinary standards and must have in fact realised that he was acting dishonestly according to those standards.   

276.	As above, I am also satisfied beyond reasonable doubt that the cash monies at Gusap Sub-branch were property for the purposes of s. 383A(3)(a) of the Criminal Code, nor that the property belonged to BSP.   There is no dispute and I find beyond reasonable doubt that at the time the property was of a value of more than K2000 for the purposes of s.383A(2)(d), or that at the relevant time Michael Yakip was employed by BSP for the purposes of s. 383A(2)(b) of the Criminal Code.

277.	On the above findings there was a variance between the amount of monies alleged to have been misappropriated and the amount established beyond reasonable doubt. The amount of monies alleged to have been misappropriated is not an essential element of s. 383A(1)(a) of the Criminal Code.  Proof that the accused dealt with any portion of the value of it is sufficient to constitute the offence: S. 530 (6) and (7) of the Criminal Code.  

278.	In conclusion I am satisfied beyond reasonable doubt that between 1 January and 31 June 2017, Michael Yakip dishonestly applied to his own use and to the use of others monies in the sum of K524,380.474, the property of the Bank of South Pacific Limited, contrary to s. 383A(1)(a)(2)(b)(d) of the Criminal Code. The evidence led by the State to prove each of the elements of the offence is such that any reasonable hypothesis consistent with the innocence of the accused has been excluded.  

Exhibits A to O and Patricia Maso and Reinert Waira    
279.	Exhibits A1, C1, E1, G1, I1, K1, M1 and O1 report a cash surplus of K11,843 on each of the respective dates, except for 13 February, when a surplus is shown of K58,721.10, for T802, “Reinert Waira”.  

280.	Exhibits A1, C1, E1, G1, I1, K1, M1 and O1 report a cash shortage of K19,680.98 on each of the respective dates until 15 March, from which time on a shortage of K29,550.98, for T802, “Patricia Maso”.  

281.	For the reasons stated above, however, it is not possible to rely on Exhibits A1, C1, E1, G1, I1, K1, M1 or O1 as correctly stating the actual cash missing on Tills Nos T802 and T803.  Here I note that Mr Tarabu has also incorrectly identified T802 as belonging to Reinert Waira and T803 as belonging to Patricia Maso in each of the exhibits.  

282.	Nor in this case has the State tendered the Teller Transaction Logs or the Teller Specie Reports for T8302 or T8303.  In the circumstances it is not possible to determine the cash shortage, if any, in the same way calculated for T8301.

Patricia Maso

283.	Evidence of Patricia Maso’s participation in the misappropriation of cash monies from Gusap is somewhat limited.  PM1, is a list of suspect transactions.  Other than one in January, the other transactions are alleged to have occurred on a limited number of dates in April, May and June.  There are a number of transactions which are conducted on 25 April 2017.  There is a “debit adjustment” of K80,000 in two lots of K40,000 on the account of St Luke’s Primary School Account for which there are no vouchers available, but two “credit adjustments” appear on the account of Ramu Sugar Vocational Centre on the same day.  On 7 May 2017 there is a cash deposit to St Luke’s, for which there is a slip completed by Patricia Maso, and then a withdrawal of K8600 and a further K70,000 on the St Luke’s on 12 and May 2017, respectively, both processed by Patricia Maso.  It is highly suspicious and on one view it would appear that Patricia is moving money around.  The allegation is that cash monies were withdrawn using forged signatures.  

284.	Although expert evidence is not essential for a tribunal of fact to come to a conclusion on a comparison of disputed handwriting, a judge sitting alone in a criminal trial must warn himself of the dangers involved in proceeding without expert testimony:  The State v Baine [1990]  PNGLR 1. 

285.	I have considered the matter but I am not in a position to make a firm determination about the signatures on the disputed vouchers.  The State did not call the authorised signatories.  Nor did it call a handwriting expert although I accept that Ms Garalom has been trained in comparing signatures and expressed the view that in her opinion the signatures were different from the specimens.  In the circumstances I cannot find beyond reasonable doubt that the signatures are forgeries and that it must follow that the cash monies were applied by Patricia Maso.  

286.	Nevertheless, PM16, copy of deposit slip dated 19 June 2017 shows and Patricia Maso does not dispute that K50,000 was deposited with the bank that morning by Papindo.  PM19, Teller Transaction Log, p 32854, shows and again Patricia Maso does not dispute that the monies were deposited to Papindo’s account in the morning at 1018 that day by her through her till, T8302, and that later in the day, shortly after 14:27, the transaction was voided or reversed  p 32858.  

287.	I am satisfied beyond reasonable doubt that at the time she gave the monies to William Shal she applied them to her own use and the use of others.  There is no other rational inference.  She admitted in her evidence that she gave the cash monies to William Shal.  I don’t accept her evidence that she gave it to him because he needed small notes.  According to her Teller Transaction Log she dealt with 82 other transactions before voiding the Papindo transaction later in the day.  Many of these transactions involved large amounts.    According to her evidence she put the cash into a cabinet or drawer during the day.  I find it implausible that several hours after processing the transaction, she was able to recall that Papindo had deposited K50,000, locate the said cash amongst all the other cash in her drawer, and readily find the deposit slip amongst all the others processed.  I also find her explanation for simply “voiding” the entire transaction implausible.  No amount of training is required to know that once made a deposit cannot simply be voided without proper documentation, record or approval.     

288.	I am further satisfied beyond reasonable doubt that at the time she applied the monies to her own use she did so dishonestly.  It was dishonest according to the ordinary standards of honest and reasonable people to take monies belonging to the bank and give them to William Shal.  I am satisfied beyond reasonable doubt that according to those standards, and her education and experience that she must have known that she was acting dishonestly.  

289.	As above, I am also satisfied beyond reasonable doubt that the cash monies at Gusap Sub-branch were property for the purposes of s. 383A(3)(a) of the Criminal Code, and belonged to BSP.   There is no dispute and I find beyond reasonable doubt that at the time the property was of a value of more than K2000 for the purposes of s.383A(2)(d), and that Patricia Maso was employed by BSP for the purposes of s. 383A(2)(b) of the Criminal Code.

290.	As above the variance in monies found to have been misappropriated is not material: S. 530 (6) and (7) of the Criminal Code.  

291.	In conclusion I am satisfied beyond reasonable doubt that between 1 January and 31 June 2017, Patricia Maso dishonestly applied to her own use and to the use of others monies in the sum of K50,000, the property of the Bank of South Pacific Limited, contrary to s. 383A(1)(a)(2)(b)(d) of the Criminal Code. The evidence led by the State to prove each of the elements of the offence is such that any reasonable hypothesis consistent with the innocence of the accused has been excluded.

 Reinert Waira

292.	As above, the Teller Transaction Logs and Teller Specie Sheets are not available for T8303.   However, the State relies on the following transactions, inter alia, to show that there was a pattern of funds being moved in out of various accounts in order to disguise the cash monies taken.   

Daniel Naria

Date 	Withdrawals (Acc No. 7004961566)	Date 	Deposits 	
29.03.17	K10,000 – RW5 (N); RW5 (O)	04.04.17	K10,000 - WS4	
25.04.17	K15,000 – W1 & W2	02.05.17	K15,000 – WS4(C2)	
29.05.17	K13,000 – X1 & X2	05.6.17	K13,000 – WS4(E1)	

293.	But for the withdrawal on 29 March 2017 all transactions were conducted by William Shal.  Daniel Naria was very clear that he did not make the withdrawal on 29 March 2017, and that he uses his card to make withdrawals unless he is transferring funds, i.e. a withdrawal and deposit to another account, for example when he is paying school fees at the beginning of the year.  The bank’s records show that the cash withdrawal on 29 March 2017 was processed through Reinert Waira’s till, T803, but that there is no voucher on record.  Mr Naria is a slaughterman and from his perspective, these withdrawals represent a very large amount of money.  I have no doubt that Mr Naria would recall making the transactions.    

Silas Gilmai

Date 	Withdrawals (Acc No. 1003371141)	Date 	Deposits 	
03.05.17	K30,000 – (RW – 3 (W)	02.05.17	K30,000 (RW – 6 (FF)	
07.06.17	K10,000 – (RW – 3 (X) 	09.05.17	K10,000 – (WS – 4 (GGGG)	
08.06.17	K10,000 – (RW – 3 (V)  	05.6.17	K30,000 – (RW – 6 (GG) 	

294.	All of the transactions but the deposit of 9 May were processed through Reinert Waira’s till.  The other through William Shal’s. Mr Gilmai was adamant that he conducted withdrawals in January 2017 but none thereafter.  He did complain to Reinert Waira and she told him it was a system error and the money would be replaced.  He did make cash deposits at Gusap subbranch in May 2017, about K400 or K500, not exceeding K1000 to his Plus Saver Account 1003371141.  

295.	The bank’s records show that there is no voucher on record for the withdrawals conducted on 30 May or 7 June.  Reinert Waira admitted in cross-examination that the signature on the withdrawal slip “is slightly not the same” as the one that on the specimen form but she said she knew him and so took a copy of his identification and sent a copy down to Lae.  No such record was kept in accordance with bank policy.

Keao Pie
Date 	Withdrawals (Acc No. 7004074717	Date 	Deposits 	
31.01.17	K10,000 (RW – 3 (Q) 	02.01.17	K10,000 (RW – 6 (AA) 	
27.02.17	K10,000 (RW – 3 (R) 	01.03.17	6,000 (RW – 6 (BB) 	
15.03.17	K7,000 (RW – 3 (S) 	02.03.17	K4,000 (RW – 6 (LL) 	
29.03.17	K15,000 RW 3 (T) 	02.03.17	K7,000 (RW – 6 (DD) 	
25.04.17	K20,000 (NNN1) (MY – 1 (FF) 	02.05.17	K12,000 (WS – 4 (ZZZ)	
27.04.17	K10,000 (MMM1) (MY – 1 (DD) 	03.05.17	K8,000 (WS – 4 (AAA) 	
29.04.17	K15,000 (OOO1)			

296.	Reinert Waira admits that she conducted the withdrawals on 31 January and 27 February.  The records show they were processed through her till but it appears that she stamped the forms with Patricia Maso’s stamp.  Similarly, the records show she processed the withdrawals of 15 and 29 March.  The first three were approved by Michael Yakip as evidenced by his signature. There is no voucher for the latter.   Records show that the deposits on 2 March were both made through Reinert Waira’s till. 

297.	The remaining transactions were processed by William Shal.  As above, Keao Pie was a very sincere witness.  I recall his emotion at the loss of his monies. 

298.	The State’s evidence has excluded any rational inference that the above transactions were conducted on the instructions of the customers.  I am satisfied beyond reasonable doubt that when Reinert Waira withdrew the monies she applied them to her own use and the use of others.  Given the processing of the transactions through the tills in Gusap, and the presence of physical vouchers in some cases, the evidence excludes any involvement of the system error on these accounts.  The size and pattern of transactions, and the correspondence with those of William Shal has excluded any rational inference that these transactions were simply conducted by coincidence. 

299.	I am further satisfied beyond reasonable doubt that at the time Reinert Waira applied the monies to her own use she did so dishonestly.  It was dishonest according to the ordinary standards of honest and reasonable people to take monies belonging to the bank and apply them to her own use.  I am satisfied beyond reasonable doubt that according to those standards, her education and experience that she must have known that she was acting dishonestly.  

300.	As above, I am also satisfied beyond reasonable doubt that the cash monies at Gusap Sub-branch were property for the purposes of s. 383A(3)(a) of the Criminal Code, and belonged to BSP.   There is no dispute and I find beyond reasonable doubt that at the time the property was of a value of more than K2000 for the purposes of s.383A(2)(d), and that Reinert Waira was employed by BSP for the purposes of s. 383A(2)(b) of the Criminal Code.

301.	As above the variance in monies found to have been misappropriated is not material: S. 530 (6) and (7) of the Criminal Code.  

302.	In conclusion I am satisfied beyond reasonable doubt that between 1 January and 31 June 2017, Reinert Waira dishonestly applied to her own use and to the use of others monies in the sum of in the sum of K102,000, the property of the Bank of South Pacific Limited, contrary to s. 383A(1)(a)(2)(b)(d) of the Criminal Code. The evidence led by the State to prove each of the elements of the offence is such that any reasonable hypothesis consistent with the innocence of the accused has been excluded.

COUNT 1 CONSPIRACY
Elements of Conspiracy

303.	In Roland Tom and Kalen Kopen v The State (2019) SC1833, the Supreme Court set out the elements of the offence of conspiracy to defraud contrary to s. 407(1)(b) of the Criminal Code (Ch. 262) (Scott v Metropolitan Police Commissioner [1975] AC 819; Peters v The Queen (1998) 192 CLR 493 adopted and applied; Potape v The State (2015) SC1613 clarified). 

304.	To establish the offence the State must prove beyond reasonable doubt that:

(a)	the accused person;
(b)	conspired with one or other persons;
(c)	to defraud the public or any person (whether or not a particular person).

305.	To defraud means:

(a)	to deprive a person of property which is his or to which he might be entitled, or to put the property of that other person at risk, or to imperil some lawful right, interest, opportunity or advantage of another person;
(b)	by using deceit, or fraudulent or dishonest means;
(c)	knowing that he has no right to deprive that person of that property or to prejudice those rights or interests.

306.	In The State v Joseph Wai (2020) I summarised a number of principles applicable to the offence at [51] to [59] (emphasis added): 

“Conspiracy is an inchoate offence which is complete upon the entry into an unlawful agreement, express or implied, which need never be implemented: Roland Tom at [38]; The State v Iori Veraga (2005) N2849 applying R v Aspinall (1876) 2 Qu D 48.  It is complete without the doing of any act save the act of agreement: R v Rogerson (1992) 174 CLR 268 at 279.  

The prosecution must prove, however, not only an agreement between the alleged conspirators to carry out an unlawful purpose (or a lawful purpose by unlawful means) but also an intention in the mind of any alleged conspirator to carry out the purpose: Tanedo (supra); R v Thomson (1965) 50 Cr App R 1.
 
There is no need to establish the existence of meetings, nor a formal, nor even express agreement:  see Roland Tom (supra) at [40].

Evidence of acts following the agreement (overt acts) may be, and often is, the only available proof that the agreement was made; but it is the agreement and not the evidence that constitutes the offence: see Veraga (supra) applying R v Gudgeon (1995) 133 ALR 379 at 389.

Conspiracy is a continuing crime.  It extends over the period of the agreement until it is achieved or terminated: Roland Tom; Veraga (supra).  

It remains a single conspiracy no matter who joins or leaves it, as long as there are at least two persons at any one time acting in combination to achieve the same criminal objective:  Veraga (supra); R v Masters (1992) 26 NSWLR 450 at 458. 

The conspirators may join in the conspiracy at various times; any one of them may not know all the other parties, but only that there are other parties; and any one may not know the full extent of the scheme to which he attaches himself; but each alleged conspirator must know that there is in existence a scheme which goes beyond the illegal acts which he agrees to do and must attach himself to that scheme: Veraga (supra).

In a conspiracy to defraud, the agreement must be one to bring about a result by dishonest means but those means need not necessarily involve deception. Dishonesty of any kind is enough…

It is generally accepted that “fraudulent” and “dishonest” may be used interchangeably.  See Scott (supra) at 839.”  

Conspiracy - Analysis

307.	The State alleged that the four accused conspired to defraud the bank “by deceitfully and fraudulently processing unauthorised bank withdrawals and unauthorised deposits from customer accounts”, contrary to s. 407(1)(b) of the Criminal Code.

308.	The indictment did not particularise the property or interest which the accused agreed to defraud but the State submits that it is “cash monies”.  It is clear from the above that the State has to prove as an element that the accused conspirators agreed “to deprive a person of property which is his or to which he might be entitled, or to put the property of that other person at risk, or to imperil some lawful right, interest, opportunity or advantage of another person”.  In this case the subject of the conspiracy is cash monies which belong to the bank.  

309.	Whilst the State needs to establish this as an element, the indictment nonetheless reflects the terms of the offence as described in the words of the Criminal Code and was drafted in accordance with the Criminal Practice Rules. At no time has the defence taken any issue.  In some jurisdictions, for example Australia, particulars in conspiracy to defraud cases (both of the subject property/interest and of the fraudulent means) are provided by letter, particularly in complex cases.  Here the particulars were provided in the alleged facts.  The count is not formally defective for failing to include the words “of cash monies”.  (Nor was it necessary to specify an amount.)   It is my strong view, however, that as a general rule it is preferable for the prosecution to state the particulars of the property or interest the subject of the offence in the indictment to ensure clarity of the case alleged.  

310.	The indictment could have been better expressed but it has been clear from the outset that the case is that the accused were conducting unauthorised transactions, with a view to disguising the underreporting of actual cash monies on hand.   

311.	Having regard to the elements of the offence set out at [304] and [305] above, I am satisfied beyond reasonable doubt that there was a conspiracy between William Shal and Michael Yakip, to defraud the bank, that is they agreed:

a)	to deprive a person, namely BSP Limited, of property which belonged to it, namely cash monies;  
b)	by using dishonest means, that is by processing unauthorised withdrawals from and deposits to customer accounts;
c)	knowing that they had no right to deprive the bank of the cash monies.  

312.	Here I note that “fraudulent” and “dishonest” may be used interchangeably.  Furthermore, it was not necessary for the State to allege fraud through both deceitful and fraudulent means but the evidence establishes in this case that the means were also deceitful: see above, re Scott (supra).

313.	In reaching this conclusion I have taken into account the above key findings of fact, together with my findings as to the deliberate underreporting of cash by both accused, and the joint taking of funds.  In addition I have had regard to the evidence which shows the conduct of unauthorised transactions by William Shal on the accounts of Daniel Naria, Silas Gilmai and Keao Pie, some of which bear the signature of Michael Yakip.  Here I note that William Shal admitted that he processed withdrawals on Daniel Naria’s account on 25 April and 29 May even though the signatures were not the same as the specimen. Nor do I accept Michael Yakip’s evidence that when he was referred a transaction for approval it was only in relation to the amount.  That makes no sense – what was he approving if not checking that the transaction was approved by the rightful customer, for the correct amount, from the correct account, from which funds were available. 

314.	As above, the evidence has excluded the operation of the system’s error on the taking of funds, and the manual processing of transactions through the tills in Gusap.  To my mind, however, the existence of the systems error explains what happened at Gusap Subbranch.  By his own admission, Michael Yakip was aware of the systems error and I have no doubt that both he and William Shal sought to take advantage of its existence, to take monies knowing that apparent shortages might well be attributed to the longstanding systems error.

315.	I am also satisfied beyond reasonable doubt that William Shal and Michael Yakip participated in the conspiracy, such that at the time they agreed to use dishonest means to deprive the bank of its monies, they intended to carry that objective into effect.  Again, the evidence of this intent may be inferred from their overt acts.  The evidence shows that both accused played an active role in implementing the conspiracy.  

316.	I am further satisfied beyond reasonable doubt that according to the ordinary standards of reasonable and honest people, the means agreed to deprive the bank of its cash monies, by processing unauthorised transactions was clearly dishonest.  Having regard to those standards, I am also satisfied beyond reasonable doubt that both William Shal and Michael Yakip must have in fact known that the agreed means were dishonest.  Finally, I am satisfied beyond reasonable doubt that each accused knew that he had no right to deprive the bank of its monies. There is no other rational inference in all the circumstances. 

317.	As above, it is possible for conspirators to join in a conspiracy at various times.  They may not know the full extent of the scheme to which they attach themselves; but each must know that there is in existence a scheme which goes beyond the illegal acts which they agree to do: Veraga (supra).  I am not satisfied on the evidence before me that Patricia Maso was aware that there was a scheme that went beyond the illegal act which she agreed to, namely the taking of Papindo’s monies.  The State has not established that beyond reasonable doubt.

318.	With respect to Reinert Waira, I am satisfied beyond reasonable doubt having regard to my key findings above, the application of funds and the conduct of unauthorised withdrawals and deposits on the accounts of Daniel Naria, Silas Gilmai and Keao Pie that she joined the conspiracy to defraud the bank of cash monies.  From her overt acts it is clear that at the time she joined she intended to participate in the conspiracy.  I am further satisfied beyond reasonable doubt that Reinert Waira was aware that the means agreed to deprive the bank of its cash monies was dishonest.    Furthermore, that she was aware that she was not entitled to deprive the bank of its cash monies. 

319.	In summary, the State has established beyond reasonable doubt that William Shal, Michael Yakip and Reinert Waira conspired to defraud the Bank of South Pacific of cash monies by fraudulently processing unauthorised bank withdrawals from and deposits to customer accounts, contrary to s. 407(1)(b) of the Criminal Code.  The evidence led by the State to prove each of the elements of the offence is such that any reasonable hypothesis consistent with the innocence of the accused has been excluded.  

320.	As above, the evidence establishes beyond reasonable doubt that the cash monies the subject of the conspiracy, were property which belonged to BSP.   
Verdict: 

a)	Reinert Waira, Michael Yakip and William Shal are each guilty of conspiracy to defraud BSP, contrary to s. 407(1)(b) of the Criminal Code;
b)	Reinert Waira is guilty of misappropriating K102,000 belonging to BSP, contrary to s. 383A(1)(a)(2)(b)(d) of the Criminal Code;
c)	Patricia Maso is guilty of misappropriating K50,000 belonging to BSP, contrary to s. 383A(1)(a)(2)(b)(d) of the Criminal Code;
d)	Michael Yakip is guilty of misappropriating K524,380.47 belonging to BSP, contrary to s. 383A(1)(a)(2)(b)(d) of the Criminal Code;
e)	William Shal is guilty of misappropriating K524,380.47 belonging to BSP, contrary to s. 383A(1)(a)(2)(b)(d) of the Criminal Code.
________________________________________________________________
Public Prosecutor: Lawyer for the State
Public Solicitor: Lawyer for the Accused  	

Annexure A:  Evidence of Reinert Waira regarding specific transactions
Evidence of Reinert Waira in EIC	Evidence of Reinert Waira in XXM	
RW3(K) Withdrawal slip dd 7 April 2017 for Manase Sirimayo Account No 7004232281 for K15,000
She confirmed that she conducted the transaction.
Most of the customers are illiterate so she was the one who filled out the withdrawal slip, the customer signed it and because it was above her limit, she referred it to Michael Yakip for further approval because it was above K2000.  	RW3(K)
She agreed that she filled out the form. And processed the transaction.  She did not get the customer to sign at the back.  The signature is the customer’s signature.  She agreed that she was trained to cross-check specimen signatures. 
RW-3(L) (p81) contains a specimen signature.  She agreed that the signature on the specimen was “slightly” different from that on the withdrawal slip.  She failed to ensure that they signed on the back.  	
RW3(O), withdrawal slip dd 17 March 2017 for Pala Parep Account No 7002029267 for K10,000.
She processed the transfer of monies from Pala Parep’s Account, which is a Kundu Account, to Roger Powe’s account.  The customer was present. Pala Parep is self-employed, he smells smoke, flex cards, betelnut and mustard in the informal market.  Digicel employed him as one of their sales person. This transfer was done to avoid the cash handling fee.  For every K5000 a fee of K100 is charged by BSP.  To avoid the fee she transferred the K10,000 to Powe’s account which is a Plus Saver Account, which does not attract any fees.  There were no complaints by Parep against her whilst she was employed at BSP.
She can recall that whilst working for BSP at Ramu she conducted ä few” big transactions to avoid the fees. 	RW3(O) She processed this transaction.  She did not sign where she was supposed to sign.  No signature at the back of the withdrawal slip. The teller stamp is T802.  The signature at the top is Michael Yakip’s because the transaction was above her limit.   Transferred into her husband’s account to avoid cash handling fees. 	
RW3(V), withdrawal slip dd 8 May 2017 for Silas Gilmai Account No 1003371141 for K10,000
She conducted this transaction.  Sailas Gilmai is an elderly man.  He works at Ramu Sugar. 

	RW3(V) p 103, K10,000 above limit and no signature from her OIC.  Agrees that handwriting on withdrawal slip and says that Silas Gilmai’s signature is on the slip.  She does not know if the signature matches that contained in the specimen slip.  P 105, she agrees that the signature is “slightly not the same” as the specimen signature.  The procedures require it to match but she processed it despite it not matching and this was a compliance breach.  Silas Gilmai came and complained to them at the bank.  He went to Kainantu and they sent him to her.  Kainantu called Gusap about the enquiry.  They scanned the withdrawal slip and id card to Lae and she wrote a statement to Lae and sent it down to Lae.  
In RXM Even though the signature specimens was slightly she knew him so she asked for his ID.  She printed out the ID, made sure he was the right customer and then gave him the cash.  She sent a copy down to Lae.  One of the officers got the ID and took down to Lae.  
It was a very busy week.  Fortnight week.  Lots of customers crowded on the counter.  She did the usual check.  She asked for his ID.  Got the copy of the ID and stapled with withdrawal slip.  Sailas was standing there.  	
RW3(A) withdrawal slip dd 7 April 2017 for Apa Willie J for K400.  Apa Willie is employed at Ramu Sugar. When he comes to the bank she helped him fill out his withdrawal slip, processed it and gave him K400.  As a teller she recognises that there is something wrong with the slip in that she did not ask him to sign at the bank and she did not write down the break-up of the cash provided on the withdrawal slip.  She denies that there is anything forged on that document.  	RW-3(A) : She agreed that she processed the transaction and that the handwriting is hers.  The teller stamp is her stamp. She disagreed that the customer was not there at the time.  AS400 printout, “the source of transaction user ID” 8303, which is her user id.   
The teller signature is her signature.  
All filled out by the same biro, which was hers.	

	RW3(L) Another withdrawal slip for K20,000 dd 7 April for Manase Sirimayo.  She agreed that she processed the transaction.  Again, the customer did not sign at the back.  The signature is that of the customer. Again, she did not check off to confirm that she had checked.  Comparing with the specimen at RW3(L) is not the same as the specimen signature but she did process the withdrawal. She asked the customer if he has an ID card, identifying him as the rightful owner of the account.  she did this even though she knows sign him.  He did not sign at the back or get clearance from her OIC.  (No id recorded anywhere)
(In RXM she said she processed RW3(L) without OIC’s approval because he was also the sales officer, opening accounts, and sometimes went out and opens accounts, checking eftpos and tablet agents.  So she did not get his approval because he wasn’t in the office.  She was thinking that the customer comes first.  
RW3(Q) Withdrawal slip dd 31 January 2017 for Keao Pie Account No 7004074717 for K10,000. She confirmed that she processed the transaction.  The customer filled out the form and at “Teller Use” she wrote K10,000 she wrote those words.  Agreed it is the same biro used to write out customer details.  Her biro. She confirmed the signature and also signed as the teller.  This was approved by her OIC, that is his signature at the top of the withdrawal slip.  
RW3(R) Withdrawal slip for Keao Pie dated 29 March 2017 for K10,000: she processed the transaction and signed off as the teller.  The customer did not sign off at the back.  The signature is that of the customer but she agrees that the signature is not the same as that of the 31st January.  Agreed that she failed in her compliance checks to check that. She maintains that the customer conducted the transaction. She doesn’t know if he complained that monies had gone missing from his account.
RW3(JJ) Withdrawal slip dd 31 March 2017 in the amount of K21,000 from the account of William Shal, Account 7006616986.
Agreed that she processed the transaction.  William filled out the slip himself as it was his account.   She agreed that she did not tick to show that she had conducted checks.  She said that they were not allowed to process on our own accounts so she agreed that yes she helped him.  It was normal for her to help colleagues process such transactions.  
RXM: She assisted him because they are not allowed to process any withdrawals from their account on their own till.  She got relevant approval from the boss. That was not the only time she helped one of her colleagues.  She also helped Michael and Patricia.  Those records would be with the bank.  	
	RW3(O) She processed this transaction.  She did not sign where she was supposed to sign.  No signature at the back of the withdrawal slip. The teller stamp is T802.  The signature at the top is Michael Yakip’s because the transaction was above her limit.   Transferred into her husband’s account to avoid cash handling fees. 	
	RW3(Q) Withdrawal slip dd 31 January 2017 for Keao Pie Account No 7004074717 for K10,000. She confirmed that she processed the transaction.  The customer filled out the form and at “Teller Use “she wrote K10,000 she wrote those words.  Agreed it is the same biro used to write out customer details.  Her biro. She confirmed the signature and also signed as the teller.  This was approved by her OIC, that is his signature at the top of the withdrawal slip.  	

Annexure B:  Evidence of William Shal regarding specific transactions

	
William Shal Evidence in Chief 	Cross-Examination 	
WS4(Y) down to WS4(PP), Bundle of deposit slips for Jasmine W Josen
Deposit slip dd 8 March 2017 for Jasmine W Josen for K135 is an example of deposits made to his child’s account.
It is almost three years now that he has been depositing to his child’s account.  He admits he made  10 to 15 deposits in his other children’s accounts.
WS4(BB) is a Teller Transaction Log showing records of deposits and withdrawals.  It shows a K1000 deposit for Jasmine William’s account dated 14 March 2017.  This was profit from the market which he deposited to her account.
WS4(JJ), p 313 Teller Transaction Log Report showing deposit of K1500 to Jasmine Josen’s account on 24 April.
WS4(MM) is a deposit slip for K1576.25 to Jasmine’s account on 25 May 2017.  The money came from market takings.  Whilst working at the bank he realised that there are children saving accounts and opened accounts and did deposits.  He made those sort of deposits for three years.  
Deposits and withdrawals for Eka Martin 
He remembers him.  He lives in the same area.  He is also an informal market salesman.  A lot of times he comes and does deposits and withdrawals. He cannot recall exactly when.  
Ken Peto is about 50 years old.  He is a money lender.   He knows him because he grew up there and Ken Peto also lives there.  He assisted him many times. 
Daniel Naria  lives in the same village as him and often comes to the bank.  
Unknown customer He assisted Reinert Waira withdraw K21,000 from his account to avoid the 2 % customer fee for a withdrawal above K5000, even though he did not know the customer.  On that day he did a lot of transactions and the customer was at the counter.  To assist the customer he had to transfer the customer’s money into his own account because the customer did not want to pay the 2% fee.   So he helped him by filling out the withdrawal slip and passed it over to Reinert Waira to assist that customer. 	

 	
	S1, withdrawal slip dd 1 June 2017 for Account No 7007077915 in the name of Adam Steven in the sum of K190 was processed by him. The customer was at the counter and he assisted him.  He filled out the withdrawal slip.  The customer was paid by Ramu Agri and this was his salary.  He asked him about the key word and confirmed that he is the right customer and because he is an illiterate person went on to assist him. 	
	W1, 2, 3  Withdrawal slip dd 25 April 2017 in the name of Daniel Naria in the sum of K15,000; AS400 printout.  He processed the transaction.  He agreed that the signature was different but he knew him so he went on to process it.

X1, X2 Withdrawal slip dd 29 May 2017 for Daniel Naria for K13,000.  Again the signatures on the slips were not the same as the specimen but he processed it because he knew the customer.	
	BB1 and 2, CC1 and 2, and DD1 and 2
BB1, Withdrawal slip dd 29 March 2017 in the name of Martin Eka for K21,000, CC1 and DD1, all processed by him. He filled out withdrawal slips for each transactions.  The signature is different from the specimen but because he knew the customer he processed it even though it was against bank policy.
WS4(O) Copy of Teller Transaction Log. He conducted deposit to Jasmine William Account No 7002223217 for K107.  He agreed that it was paperless, there was no deposit voucher. 
WS4P, 4Q, 4R, 4S to 4(T)
He agreed that he made deposits to his daughters account on 6 January, 10th, 13th, 19th, 26th 
He maintained that all deposits slips would be there.  
The system always asks for a scanned copy.
WS4 (GGGG) Deposit slip dd 9 May 2017 for Silas Gilmai for K10000 dated 9 May 2017.  He processed this deposit.  He is not aware if Gilmai complained. 
He knows Keao Pie, he is a regular customer.
He does not come many times, say twice in a month
Pie is not formally employed.	
	Agreed that Patricia Maso deposited K50,000 for Papindo and the physical cash was later given to him 
He said he was aware that Patricia reversed the deposit but then said he did not know but that he received the cash.  He needed small notes.  Meaning K20, 10, 5s, K2s.  It was the same date that Frieda, Dennis and William came and suspended them. 
Withdrawal of K21,000 for a customer he did not know: He was assisted by Reinert Waira.    The customer was right at the counter and they were assisting the customer.	

Annexure C:  Evidence of Michael Yakip regarding specific transactions

Evidence in Chief 	Cross-Examination	
MY1(A), Withdrawal slip dd 25 April 2017 for Daniel Naria for K15,000.  His signature appears at the top authorising the withdrawal.  The customer normally stays with the teller at the counter.  The teller did a check and realised the amount was too big and referred the withdrawal to him.  He assisted to approve that withdrawal to make payment.  	He approved by signing at the top.
He agrees that the specimen signature is not the same as that on the withdrawal slip.  Because it was regarding the tellers limit.  She realised that the limit is too high and she sent it to me and he signed it, approving the payment.  He failed to check the signature.  It was a compliance breach.	
MY1(C), withdrawal slip dd 31 January 2017 for Martin Eka in the sum of K30,000: He authorised the withdrawal slip.  His signature appears at the top.  He had the authority to do so.  He is allowed to authorise transactions of that amount for personal accounts.		
	MY4C and 4D, 1 March and 3 March :  He agreed that they are deposits to his account.  It was normal to make deposits because his wife does informal sector marketing and this was money taken from market.  She would go to Lae to do shopping and we deposit monies so she can go to Lae to use card