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State v Pipi [2004] PGNC 197; N2574 (8 June 2004)

N2574

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

CR. 431 of 2004

Between:

THE STATE

And:

SAM PIPI

WAIGANI: GAVARA-NANU, J
2004: 01st, 04th & 08th June

CRIMINAL LAW - Misappropriation – Breach of trust – Employee using employers facilities to manufacture false identification card – Bogus loan application – Sophistication in the commission of the offence – Other employees names being used to commit the crime – Employees’ integrities being called into question – Another employee suffering financial loss – Employer forced to correct its records at its own expense – Special aggravating factors – Amount misappropriated small but the seriousness and the gravity of the offence warrants short but sharp custodial sentence.

Case Cited:
Wellington Belawa -v- The State [1988-89] PNGLR 496

Counsel:
A. Tongaiu for the State
M. Painap for the Prisoner

SENTENCE

GAVARA-NANU, J: The accused pleaded guilty to first count of obtaining K500.00 by false pretence from the management of Nika Financial Lending Services on 24th April, 2002, contrary to s. 404 of the Criminal Code Act. The accused also pleaded guilty to the second count of dishonestly applying to his own use the K500.00, the property of Nika Financial Lending Services on 24th April, 2002, contrary to s. 383A (1) of the Criminal Code Act.

The facts of the case are that, on 24th April, 2002, the accused who was employed by the Police Force as the Accident Research Officer in its Traffic Section at the Police headquarters at Konedobu lodged a loan application under the name, ‘Ivan Rakatani’ to Nika Financial Lending Services for K500.00. The accused manufactured a false identification card using police facilities as part of his scheme towards obtaining the loan.

In his loan application form, the accused said, he was a Police Training Officer attached to Kimbe which was false. He also gave a false employee file number and false gross and net fortnightly salaries. He then signed the application form as Ivan Rakatani with a forged signature. He gave the reason for the loan as, to purchase an airline ticket.

In the same application form, he also wrote the name Mr I. Gilbert, as a Salary Clerk and the countersigning officer for his loan application. This name was false and the signature appearing under the name ‘I. Gilbert’ was also forged. He also falsely gave his bank as PNGBC Kimbe, and gave a false personal bank account number.

A false Permanent Salary Variation Advise was also prepared for the Police Department to effect the pay deductions from Ivan Rakani’s salaries fortnightly wages.

After the loan was approved, the K500.00 was paid to the accused who applied the money to his own use.

The real Ivan Rakatani was a Police Officer with the rank of Chief Inspector who was in charge of a Mobile Squad based in Mt Hagen. He knew nothing about the loan.

After the application was processed and the money paid to the accused, the Police Department commenced deducting the amount of K135.00 from Inspector Ivan Rakani’s fortnightly wages towards the repayment of the loan. The deductions continued until the fraud was discovered.

So Inspector Ivan Rakatani did loose some money from his pay for a period, but the monies deducted from his pay have since been repaid by Nika Financial Lending Services.

The accused has repaid K200.00 to Nika Financial Lending Services as part of the restitution of the K500.00 loan he got. He still owes K300.00 to Nika Financial Lending Services. He admitted his crime in the Record of Interview and before this Court by pleading guilty.

According to the Antecedent Report, the accused was earning K252.68 per fortnight at the time of the offence. He told the Court that, he got the money because he had financial problems, and that he was employed as a casual employee for 5 years, but he was not allowed to obtain loans by his employer.

This is his first offence. He is now 30 years old. He has expressed remorse. I take all these into account.

This was not a simple and straight forward fraud. It was quite sophisticated in the way it was carried out, because the accused used the police facilities to process and to manufacture a false loan application and a false identification (ID) card. The ID card indeed appears genuine, with the words "POLICE DEPARTMENT" printed on it and the Police badge impressed over it. It was made and intended by the accused to appear as an official Police ID card. But of course it was false in every detail, viz. the name, the number and the signature of the authorizing officer. These were all false. The ID card has the word "COMMISSIONER" printed on it as the authorizing officer. So the authorizing officer here was meant to be either the Police Commissioner or his delegate. And it turned out that the ID number used by the accused on the ID card belonged to a female employee of the Police Department. He also used a false name of L. Ivan on the ID Card. He then put his own photograph on the ID card.

The fraud was therefore quite elaborately done with a degree of sophistication, no doubt to make the loan application appear genuine and authentic. In that regard, I have noted that, this was not an ordinary and simple fraudulent transaction, like someone simply filling in a withdrawal slip with a forged signature and withdrawing money from a bank or a withdrawal being done at a bank with a cheque using a forged signature. In the instant case, it was more than that, as there was a degree of sophistication in the execution of the crime. The very fact that the accused was an employee of the Police Department and that he had used the police facilities, to facilitate and to commit the crime plainly indicates that the crime was done with arrogance and determination.

The maximum penalties for the two charges to which the accused has pleaded guilty carry maximum of 5 years imprisonment each. These are penalties prescribed by ss. 383 A (2) and 404 of the Criminal Code Act.

The defence counsel Mrs Painap has submitted that I should impose a suspended sentence and direct that the accused’s K300.00 cash bail be used to repay Nika Financial Lending Services for the K300.00 still owed by the accused.

I have seriously considered Mrs Painap’s submission, but, I cannot disregard the fact that the accused committed this offence through an elaborate fraudulent scheme. As discussed there was a degree of sophistication in the execution of the crime. The accused also abused his position of trust by using the facilities of his employer which were readily available to him by virtue of his employment.

It can be seen here that had he not used the police facilities, the police badge, the names of the Police Department, the police personnel and their positions, the accused might not have got the loan approved.

If I was to apply the sentencing guidelines in Wellington Bellawa -v- The State [1988-89] PNGLR 496, strictly, I could give suspended sentence. But, the serious aspect of obtaining money by means of an elaborate and sophisticated fraudulent scheme in my opinion presents the case which warrants custodial sentence.

In fact in Wellington Bellawa’s case, the Supreme Court said for amounts between K1.00 and K1,000.00 a goal term should rarely be given. This means, there may be cases where circumstances of a case may warrant a custodial sentence.

And according to the guidelines given in Wellington Bellawa’s case, the relevant factors are: -

1. The quality and the degree of trust reposed in the

accused.

2. The effect upon the victims of the crime.
3. The effect on the fellow employees.
4. Restitution.
   

In that regard, the offender here was an employee of the Police Department and he had abused his position of trust by using his employer’s facilities which were at his disposal by reason of his employment to execute his fraudulent scheme. And only K200.00 has been repaid to the victim of the crime. The Police Department was also forced to recover money for Inspector Ivan Rakatani and correct its records at its own expense. That required committing extra time and resources. Inspector Ivan Rakatani was also inconvenienced and suffered financial loss for a period of time. And those employees’ whose names were used by the accused to execute his fraudulent scheme also had their personal integrities called into question, thus putting them under unnecessary mental and emotional distress. These are serious aggravating factors.

The amount of money used was small and the accused only has K300.00 to repay, which can be easily paid with the accused’s cash bail of K300.00, but I am of the opinion that because the offence involved serious breach of trust by the accused and the sophistication in the commission of the crime, a short but sharp custodial sentence is warranted.

Therefore, in the circumstances of the case, I sentence the accused to 1 year in hard labour for the first count. On the second count, I sentence the accused to 6 months in hard labour. Of the 1 year in hard labour for the first count, three months will be suspended if the accused pays the remaining K300.00 to Nika Financial Lending Services by the 30th June, 2004. The K300.00 is to be paid into the National Court Trust Account. The copies of the receipt for the payment must be furnished to the Public Prosecutor, the Public Solicitor and my Associate. The money will then be paid to Nika Financial Lending Services by the Registrar at the time and the venue to be decided by the Registrar.

If the K300.00 is not paid into the National Court Trust Account by 30th June, 2004, the accused will serve the full 1 year.

The sentences for both counts are to be served concurrently, as the offences arose out of the same set of facts.

I order that the accused’s K300.00 be refunded to him.
_________________________________________________________________
Lawyer for the State : Public Prosecutor
Lawyer for the Prisoner : Public Solicitor