N11041

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) NO. 246 OF 2023

THE STATE

V

WILLIAM KAMB

Mt Hagen:   Toliken, J
2024:  09th October
	
CRIMINAL LAW – Practice and procedure – sentence – misappropriation by employee – guilty plea – sum misappropriated K350,000.00 – serious case of breach of trust – aggravating and mitigating factors considered – partial restitution made -appropriate sentence – 6 years imprisonment less time in pretrial detention – suspension – prisoner to serve 3 years – balance to be suspended if payment of K157,813.63 to complainant within 3 years – Criminal Code Ch. 262, s 383A (1)(a)(2)(b).  

Cases Cited:
Golu v The State [1979] PNGLR 653
 Avia Aihi v The State (No.3) [1983] PNGLR 92 
Lawrence Simbe v The State [1994] PNGLR 38)
Public Prosecutor v Tardrew [1986] PNGLR 91
Acting Public Prosecutor v Taganis [1982] PNGLR 299
of Belawa v The State [1988-89] PNGLR 496
The State v Nagong (1980) N225 
The State v Uviri (2008) N5468
The State v Kaki (2008) N3458
The State v Karo (2008) N3521
The State v Mamando (2008) N3709
The State v Daniel Duk (2009) N3924
The State v Morgan (2010) N4076
The State v Kutan (2011) N4526
The State v Emba (2011) N5012
The State v Etami (2012) N4769
The State v Tanner & Anor (2014) N5808
The State v Vagi (2014) N5697
The State v David Poholi (2016) N6214
The State v Pohien (2016) N6564
The State v Posakei (2019) N8000
The State v Ruth Tomande (2019) N8153
The State v Wilma Pole (2023) N10109 
The State v Mathew Kana; CR No 843 of 2012 (unreported and unnumbered judgment of 11 June 2014)
The State v Sarry Moere; CR (FC) 153 of 2017 (unreported and unnumbered judgment of 6 November 2017)

Counsel:
J Kesan, for the State
D Pepson, for the Prisoner

SENTENCE

09th October 2024

1.	TOLIKEN J:	Willie Kamb, you pleaded guilty to an indictment charging you with one count of misappropriation, an offence under section 383A (1)(a)(2)(b) of the Criminal Code (the Code).

Facts

2.	The State alleged that between 17 February 2021 and 20 May 2022 at Hevi Lift Head Office, Mt. Hagen, while employed by Hevi Lift Aviation Company as an Accounts Payable and Supplier Reconciliation Officer, you dishonestly applied to your own use and the use of others, monies totaling K350,000.00 the property of Hevi Lift Aviation Company.

3.	You were employed by Hevi Lift Aviation Company (Hevi Lift) as an Accounts Payable and Supplier Reconciliation Officer from July 2020 to 20 May 2022 at its Headquarters, Mt. Hagen.

4.	 Between 17 February 2021 and 20 May 2022, you conspired with two co-workers namely Jackson Kiuk, the Finance and Systems Officer, and Wilfred Gera, the Accounts Receivable and Cost Recovery Officer to defraud Hevi Lift of company funds totaling K1,242,871.20.

5.	You and your co-conspirators played different roles in your official capacities and collaborated in submitting 72 invoices from various clients of Hevi Lift to the Accounts Section for payment and after that fraudulently prepared payment invoices. You and your co-conspirators substituted clients' account numbers with your account numbers. The funds were then credited to your accounts and other accounts which you provided in the invoices. The funds were never paid into the clients' accounts. As a result, Hevi Lift was defrauded of a total of K1,242,871.20 which you and your co-conspirators misappropriated. You applied to yourself and the use of others the sum of K350,000.00.

6.	The State invoked section 7 of the Code.

The Offence

7.	The offence of misappropriation without circumstances of aggravation carries the penalty of a term of imprisonment not exceeding 5 years. However, where a circumstance of aggravation is pleaded in the indictment, an offender is liable to be sentenced to a term not exceeding 10 years. (Section 383A (1)(2) of the Code)

8.	Under section 383A (2)(b) of the Code, misappropriation by an employee of his employer’s property is a circumstance of aggravation. You pleaded guilty to misappropriating monies belonging to your employer Hevi Lift hence you are liable to be sentenced to 10 years imprisonment.

Issues

9.	What then should be an appropriate sentence for you? Can your offending be considered a worst case to attract the maximum penalty? 

10.	At the outset, yours might not be a worst case. Nevertheless, it is a serious case of misappropriation that must be met with a stiff enough penalty for reasons that will presently become apparent.

Sentencing Guidelines
11.	While the maximum penalty for the offence is 10 years imprisonment, it does not necessarily mean that you will go to jail for 10 years. This is because the law says that the maximum penalty may only be imposed on the worst instances of offending for any offence. Furthermore, offenders must be sentenced according to the facts and circumstances of their cases so a degree of equivalence or proportionality between the crime and punishment is achieved. In other words, punishment must fit the crime as they say. (Goli Golu v The State [1979] PNGLR 653; Avia Aihi v The State (No.3) [1983] PNGLR 92; Lawrence Simbe v The State [1994] PNGLR 38)

12.	The sentencing task is not an easy one.  It is not a science where the sentencer applies a scientific or mathematical formula. (Acting Public Prosecutor v Taganis [1982] PNGLR 299)  The sentencing court is, however, guided by sentencing principles and guidelines, which can either be set by legislation or developed by the superior courts such as the Supreme Court. The latter is the case in our jurisdiction. Guidelines may also include tariffs.

13.	Apart from sentencing guidelines, many factors may be considered when sentencing an offender.  This may include his degree of culpability and participation in the commission of the crime, degree of ignorance of the law, his age, prior convictions, prior good character, restitution, guilty plea or admission, physical and mental condition, cooperation with police, the technical nature of the offence, breach of trust, remorse or prevalence of the offence. A sentencing court will also consider comparable sentences to ensure consistency.

14.	For offences of dishonesty such as misappropriation, the prevailing sentencing guidelines are those that were set by the Supreme Court in the case of Belawa v The State [1988 – 89] PNGLR 496. The court there held that the following considerations ought to be considered –

•	the amount taken. 
•	the quality and degree of trust reposed in the offender. 
•	the period over which the theft or fraud was perpetrated. 
•	the use to which the money or property dishonestly taken was put.
•	the effect upon the victim.
•	the effect of the offence upon the public and public confidence.
•	the effect on the offender himself.
•	the offender's history.
•	whether restitution has been made.

15.	The Court also suggested tariffs on an ascending scale according to the amount stolen or misappropriated but those tariffs are now outdated and no longer appropriate.

16.	Misappropriating property by an employee is akin to stealing as a servant under s 372 (5) of the Code. What the court said in The State v Nagong (1980) N225 is worth repeating. There Kapi J (as he then was) said –

The offence of stealing as a servant is a very serious crime. This is because there is a breach of trust which is entrusted to the offender. It is also significant that there has been an increasing number of people committing this crime both in the Public Service and in the private sector in this country. It is known to all that thousands of kina are lost through servants stealing. The prevalence of the offence is a significant consideration on sentence and it has been held by the Supreme Court in this country that where an offence is prevalent the courts must be severe in their punishment; see Paulus Mandatititip and Anor. v. The State [[1978] PNGLR 128]. The courts in this country have been severe on this type of offenders and normally impose a custodial sentence. This is done with the aim of deterring the offender and potential offenders in the future. This is a proper principle and I take this into account.

17.	This statement holds equally true for the offence of misappropriation by an employee of his employer’s property. It is a serious offence as it involves a serious breach of the trust reposed in the employee by the employer. Employment relationships are symbiotic. The employer and the employee are interdependent for their mutual benefit. The employee works for a salary to help his employer make a profit. In this relationship, the employer must necessarily entrust some employees with higher responsibilities such as those involving the handling of finances and managing accounts. This requires complete trust. When that trust is breached, and the employee steals or misappropriates from the hand that feeds him, as it were, severe punishment must be imposed on the perpetrator.

Current Case

Allocutus

18.	 Coming back to your case, I have considered your address in mitigation. You expressed remorse for your offence.  You said you were just a junior officer and had been on the job for only 1 year 9 months and 27 days when you got drawn into this criminal enterprise by your unindicted co-conspirators who were your superiors.  You said what you did was out of character. You said you knew right from wrong, and you take no pride in what you did.

19.	You said your conscience got to you and you resigned from your employment on 25 May 2022. Soon after that, you wrote an apology letter to Hevi Lift and returned K17,000.00 in cash. You later returned a truck valued at K159,525.00 which you purchased with funds you misappropriated in October 2022.

20.	 You provided further information in your presentence report (PSR). There you said that a total K741,861.96 was deposited into your business account at various times as evidenced by the bank statements you produced. You withdrew K391,000.00 and gave it to your co-conspirator Jackson Kiuk leaving a balance of K350,861.96. Jackson Kiuk instructed you not to withdraw that amount, but you gave in to temptation and used up the whole sum.

21.	You said that you have repaid a total sum of K174,236.96 to Hevi Lift and are willing to settle the balance of K157,813.69 if the court so orders.

22.	You accepted responsibility for your crime, but you also blame Jackson Kiuk and another co-conspirator for forcing you into the scheme.

23.	While your PSR is comprehensive and balanced, the author was of the view that you are not suitable for probation supervision.

Antecedents

24.	You are 34 and come from Ambunigle Village, Kerowagi District, Simbu Province. You are the eldest among your siblings. Your father passed away, but your mother is still alive. You are married with three children who would be now 4, 3, and 2 years of age. When your PSR was being prepared your wife was expecting your 4th child.

25.	You hold a bachelor’s degree in Accounting and Management from the Pacific Adventist University. (PAU) You were employed by Hevi Lift when you committed this offence. After you resigned from Hevi Lift you were briefly employed by the Adventist Development Relief Agency (ADRA) in Lae, Morobe Province before you were apprehended for this offence.

26.	You have no prior convictions. Before you were granted bail you had spent 7 months and 10 days in custody.

Mitigating Factors 

27.	I apply the following mitigating factors in your favour –

•	You pleaded guilty early to your charge.
•	You are a first-time offender.
•	You cooperated with the police by making partial 	admissions in your Record of Interview.
•	You showed genuine remorse in your allocutus.
•	You return part of the money (K17,000.00) you and your unindicted co-conspirators swindled from Hevi Lift and returned a truck that you purchased from your ill-gotten gains.
•	You have offered to make restitution by repaying the balance of your share of the proceeds of your crime.

Aggravating Factors  

28.	Against you, however, are the following aggravating factors –

•	You received K350,000.00 from the total amount of K1,242,8721.20 which you and your co-conspirators misappropriated which, by any standard, is a large sum of money.
•	You breached the high degree of trust that was placed on you by your employer.
•	The offence was committed over 15 months.
•	You did not act alone but rather conspired with others.
•	You and your co-conspirators employed a highly skilled and sophisticated scheme by forging and uttering what were otherwise genuine invoices Hevi Lift’s clients and inserting your account numbers into the invoices to divert funds into your accounts without being easily traced.
•	Hevi Lift incurred consideration expenses on private investigators (foreign and local) to investigate and expose the fraud.
•	The fraud had a very high negative impact on the company’s operation.
•	The offence is prevalent.

Comparative Sentences

29.	Below comparable sentences for cases of misappropriation by employees involving similar or lesser amounts to your case –
 
•	The State v Uviri (2008) N5468,Cannings J: The offender pleaded guilty to misappropriating K300,000 from her employer over 18 months through a scheme of bogus invoices. Sentence – 7 years.
•	The State v Kaki (2008) N3458, Paliau AJ: The offender pleaded guilty to misappropriating K24, 388.08, belonging to Lihir Gold Limited. The offender was a Senior Payroll Officer and raised a cashable Lihir Gold Limited BSP Cheque and used the proceeds. Sentence - 6 years’ imprisonment less time in custody. The balance was wholly suspended with conditions including restitution.
•	The State v Karo (2008) N3521, Paliau AJ: The offender, a cashier, pleaded guilty to misappropriating K99, 600.53, the property of Badili Hardware Limited, his employer.  Sentence - 6 years’ imprisonment, wholly suspended with conditions including restitution
•	The State v Mamando (2008) N3709, David J: The offender pleaded guilty to the misappropriation of K34, 326.75, the property of her employer, Coca Cola Amatil. The prisoner was a cashier at Coca Cola Amatil’s Mt Hagen Depot. One of her duties involved the banking of daily takings. Over two days the prisoner collected monies from customers but failed to bank the whole amount to her employer’s account. Sentence - 4 years’ imprisonment less time in custody. The resultant sentence was wholly suspended with conditions.
•	The State v Daniel Duk (2009) N3924, Cannings J: The offender pleaded guilty to misappropriating K32,800.00 from customer accounts while employed as an accountant with Wau Micro Bank. Sentence – 4 years.
•	The State v Morgan (2010) N4076, Kawi J: The offender pleaded guilty to one count of misappropriation of K15,625.14, property of his former employer, Inter Oil Ltd. He was a Credit Administrator. He received payments from customers for the use of Inter Oil products. He made out receipts but never gave the cash to the cashier for banking. There was a total of 19 payments totaling K15,625.14. The discrepancy was revealed by an audit.  The offender was given a non-custodial sentence, on strict conditions.
•	The State v Kutan (2011) N4526, Kawi J: The offender pleaded guilty to misappropriating a sum of K25,000.00 belonging to Courts (PNG) Limited whilst he was the Branch Manager for Courts (PNG) Limited in Madang. Sentence - 2 years imprisonment, wholly suspended on conditions including restitution.
•	The State v Emba (2011) N5012, Kawi J. The offender was employed by Air Niugini in Kimber as a cashier. She misappropriated K286,491.71 belonging to her employer. She initially pleaded not guilty but later changed her plea.  Sentence – 6 years, wholly suspended on conditions  
including restitution.
•	The State v Mathew Kana; CR No 843 of 2012 (unreported and unnumbered judgment of 11 June 2014, Sakora J): The offender pleaded guilty to one count of misappropriation and one count of conspiracy to defraud Twivey Lawyers of K164,570.30. Sentence - 5 years’ imprisonment.
•	The State v Etami (2012) N4769, David J: The offender pleaded guilty to one count of misappropriating K165,086.18, belonging to his employer, Oilmin Field Services. He was employed as a Taxation Officer and Accounts Payable Assistant when he incorporated three bogus companies with similar names to those of his employer’s three main creditors, drew up false requisitions, altered the payee, and deposited the cheques to the accounts of those companies, from which he withdrew the monies for his own use and the use of others. Sentence - 4 years’ imprisonment less time in custody. Balance wholly suspended with conditions, including restitution.
•	The State v Tanner & Anor (2014) N5808, Salika DCJ (as he then was): The offenders were convicted following a trial of one count of misappropriation of K292, 663.50, the property of Post PNG Limited. They conspired with each other and fraudulently obtained the sum of K292, 663.50 the company’s Salim Moni Kwik (SMK) facility. Tanner manipulated the system by entering false cash entries on Telepin (the mobile money system) purporting to be monies sent from another province.  He cashed this and shared the monies with his co-offender. Tanner was sentenced to 4 years imprisonment while his co-offender was sentenced to 3 years.  Both sentences were partially suspended with condition for restitution.
•	The State v Vagi (2014) N5697,Salika DCJ (as he then was): The offender pleaded guilty to one count of misappropriation of K65,924.90, the property of her employer, PNG Gardener. She was employed as an accounts clerk and banked monies received from flower sales to her account. Sentence - 3 years imprisonment.
•	The State v David Poholi (2016) N6214, Salika DCJ (as he then was): The offender pleaded guilty to one count of conspiracy to defraud and one count of misappropriation of K688, 000.00 from BSP, his employer. He was employed as a Human Resource Benefits and Remuneration Officer. He committed the offence over 18 months involving 134 transactions. Sentence - misappropriation 5 years imprisonment.
•	The State v Pohien (2016) N6564, Liosi AJ (as he then was): The offender was convicted of one count of misappropriation of hardware materials valued at K462, 864.00 the property of his employer Sika Limited over 6 months. He was a supervisor in the company’s Hardware Section. Sentence - 5 years’ imprisonment
•	The State v Sarry Moere; CR (FC) 153 of 2017 (unreported and unnumbered judgment of 6 November 2017, Salika DCJ (as he then was): The offender pleaded guilty to one count of misappropriating K295, 099.35 whilst employed by the Ombudsman Commission as its payroll officer by fraudulently transferring the money to his own account. Sentence - 6 years’ imprisonment.
•	The State v Posakei (2019) N8000, Susame AJ: The offender was employed by the East New Britain Provincial Administration as a Human Resource advisor. He devised an illegal scheme whereby the salaries of 7 suspended officers were paid into his accounts. He pleaded guilty to misappropriating K143, 812.46. Sentence - 6 years’ imprisonment, wholly suspended with conditions.
•	The State v Ruth Tomande (2019) N8153, Berrigan J: The offender pleaded guilty to misappropriating K300,933.71 belonging to Bank South Pacific Ltd, her employer. Only K40,000.00 of this was recovered.  She was employed as a Home Loan Officer. Over 9 months she falsified 14 loan applications which had previously been declined by the bank and altered them to manipulate the system into approving the loans. She then transferred the funds to relatives’ accounts and other customers. The funds were also credited back to the loan accounts to fund repayments and avoid detection. Sentence - 5 ½ years of imprisonment.
•	The State v Wilma Pole (2023) N10109 Berrigan J: The offender pleaded guilty to one count of misappropriating K182,081.00 belonging to her employer, the Western Highlands Provincial Administration.  She was employed as a Cashier at the Provincial Treasury and had authority to countersign cheques. Several cheques were made payable to, and countersigned, by the offender. The offender presented these cheques to the Mt Hagen Branch of Bank South Pacific. All the cheques were cashed out on their face except for one in the sum of K7775, which was paid directly into the offender’s account. In total, the offender countersigned six cheques made payable to herself and received K182,081.

The cheques were signed by the Accountant, Jonah Posa, with a letter purporting to authorize cash payment and falsely justify the payment to the accused based on expenses and tasks that did not form part of her duties. The offender dishonestly applied the monies to her own use she knew that the monies were not for the stated purpose but for her own benefit. Mr Posa also benefitted from the transactions. Sentence – 5 years, wholly suspended on condition for restitution.

Appropriate Sentence - Deliberations

30.	So, what should be an appropriate sentence for you? 

31.	There is no doubt that this is a serious case of misappropriation. There is also no question about your level of culpability. You were not a reluctant participant in this highly sophisticated and fraudulent scheme. You were an active participant who because of your position as Accounts Payable and Supplier Reconciliation Officer was critically placed. No invoice would have been paid without being first certified by you. Because the fraud went on for 15 months, any claim by you that you were threatened with sacking if you did not cooperate with your co-conspirators, cannot be taken seriously. While these people may have held senior positions in the company, they were by no means the ultimate bosses. You had the option of going to the top and reporting the matter, but you did not. You chose to go along with them because you were blinded by greed and the prospective lucrative benefits you would and did receive eventually.

32.	A total of K350,000.00 was deposited into your SME or business account. From this, you built a luxurious fully furnished 4-bedroom house in your village. You also bought a new truck which you operated as a PMV. These facts can be gleaned from the depositions. Indeed, one needs to consider the materials in the depositions to fully appreciate the extent of the fraud and your level of culpability.

Submissions

33.	Your lawyer urged me to impose a sentence of 4 years from which the time you spent in custody ought to be deducted. The Court may then suspend the sentence and order you to repay the balance of what you misappropriated within 12 months. This is largely due to your mitigating factors, the fact that you returned the truck and K17,0000.00 cash, and your offer to make restitution for the remaining balance of what you misappropriated.

34.	 The State asked for a sentence of 7 years principally due to the sophistication of the fraud, the large amount of money involved, and the serious breach of trust that was placed on you by your employer.

Conclusion

35.	 I am of the considered view that you ought to get a sentence in the range of sentences imposed in the cases cited above - that is 5 – 7 years. A sentence in that range will not only punish you but also serve as a personal as well as a general deterrence.
 
36.	Offences of dishonesty such as stealing and misappropriation by employees are becoming too prevalent. Too many people are stealing from the public and corporate purses leaving many victims in financial strife. In your case, your action had a domino effect on the company's business forcing the company to take extreme measures for cost control. The company had to look for means to recover its losses according to Mr. Nico Marais the General Manager who submitted a Victim Impact statement. They had to restructure the company, and this unfortunately resulted in staff reduction and retrenchment, the result of which is that workers lost their jobs, and their families were heavily impacted. You breached the high level of trust placed in you by Hevi Lift hence you must be appropriately punished.  

Sentence

37.	I am of the view that an appropriate sentence for you ought to be 6 years imprisonment. I therefore sentence you to 6 years imprisonment less the 7 months and 10 days you spent in custody before posting bail.

Suspension

38.	 Should any of this be suspended? Your PSR is not favourable hence probation would not be appropriate for you. However, since you have offered to make restitution by repaying K157,813.69, I shall take you up on your undertaking. Restitution is a ground to suspend a sentence (Public Prosecutor v Tardrew [1986] PNGLR 91). I am mindful to therefore suspend a part of your sentence. You will, however, not get a full suspension because you cannot be allowed to rip the full benefit of your crime by enjoying your ill-gotten gains with impunity. 

Orders

39.	You are sentenced to 6 years imprisonment less 7 months and 10 days in pre-trial detention. You will serve 3 years of your resultant sentence. The balance will be suspended on the condition you shall pay Hevi Lift Ltd the sum of K157,813.69 within three years, failing which you will serve out the full balance of your sentence. Payment shall be made into the National Court Trust Account.

40.	 Your bail shall be refunded as well as cash sureties paid by your guarantor.

41.	You have the right to appeal to the Supreme Court within 40 days from today.

Ordered accordingly.

________________________________________________________________
L Luman, Acting Public Prosecutor: Lawyers for the State	
L B Mamu, Public Solicitor: Lawyers for the Prisoner