N8153

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

CR (FC) 63 of 2019

THE STATE

V

RUTH TOMANDE

Waigani: Berrigan J
2019: 24th September, 10th October, 4th, 5th and 22nd November

CRIMINAL LAW – Sentence – S. 383A(1)(a)(2)(d) of the Criminal Code – Misappropriation - K300,933.71 – Sentence of 5 ½ years of imprisonment imposed.

Cases Cited:
Papua New Guinea Cases

Gaiari-Ganereba v Giddings [1967-1968] PNGLR 246
Tapopwa Thomas v The State [1979] PNGLR 140
Goli Golu v The State [1979] PNGLR 653
The State v Tardrew [1986] PNGLR 91
Wellington Belawa v The State [1988-1989] PNGLR 496 
Lawrence Simbe v The State [1994] PNGLR 38  
The State v Imoi Maino (2004) N2773
The State v Niso (No 2) (2005) N2930 
The State v Iori Veraga (2005) N2849  
The State v Ludwina Tokiapron (2005), unreported
The State v Nancy Uviri (2008) N5468
The State v Mathew Kana, CR No 843 of 2012, 11 June 2014, unreported 
The State v Tiensten (2014) N5563
The State v Isaiah Guda (2015) N5955
The State v David Poholi (2016) N6214
The State v Paul Guli & Ors (2017) N6866
The State v Tracy Tiran (2018) N7375
The State v Solomon Junt Warur (2018) N7545
The State v Ruth Tomande (2019) N8030
The State v Bae (2019) N8029
The State v Lohia (2019) N8042 

Overseas cases 

R v Gordon; Ex parte Attorney- General [1975] Qd R 301

References cited

Sections 16, 383A (1)(a)(2)(d), 404(1)(a), 508B(1) and 530 (6)(7) of the Criminal Code (Ch. 262) (the Criminal Code).

Counsel

Ms. H. Roalakona with Ms T. Kametan, for the State 
Mr. E. Sasingian, for Offender 

DECISION ON SENTENCE

22nd November, 2019  

1.	BERRIGAN J:  A trial proceeded against the offender on an indictment containing 14 counts of obtaining monies by false pretence, one count of money laundering and one count of misappropriation contrary to ss. 404(1)(a), 508B(1) and 383A(1)(2) of the Criminal Code (Ch. 262) (the Criminal Code), respectively.  

2.	During examination of the State’s second witness the accused indicated that she wished to plead guilty.  She was arraigned and pleaded guilty to all 16 counts.

3.	I was unable to accept the accused’s pleas of guilty to Counts 1 to 14 as a matter of law.  The State subsequently offered no evidence on those counts.  For the reasons set out in my earlier decision, I confirmed the offender’s pleas of guilty to Counts 15 and 16:  The State v Ruth Tomande (2019) N8030.

4.	Count 15 of the indictment alleged that between 30 April 2017 and 1 January 2018 the accused “dealt with monies in the sum of… K368,141.64 that is criminal property by concealing and disguising the property and had knowledge or reasonably ought to know that the property is criminal property”, contrary to s. 508B(1) of the Criminal Code, also referred to as money laundering.   

5.	Count 16 alleged that during the same period the accused dishonestly applied to her own use and the use of the others monies in the sum of K368,141.64, the property of BSP, contrary to s. 383A(1)(2) of the Criminal Code, also referred to as misappropriation.

Facts

6.	At the relevant time the accused was employed as a Home Loan Officer with Bank South Pacific (BSP) Boroko Banking Centre.  Between 30 April 2017 and 1 January 2018 the accused extracted from the bank’s records, fourteen (14) loan applications previously submitted by existing bank customers but which had been declined.  Each application had a unique customer identification (CIF) number and was supported by documentation including the original applicant’s payslips, confirmation of employment and photo identification.  

7.	The accused used the declined applications, and supporting documentation, of those initial customers, together with inflated salary figures, to apply for loans in the names of 14 different bank customers through the bank’s automated loan system, the “Lend Fast System”.  

8.	As a result of the inflated salary figures entered by the offender, the loans were approved on the system and the accused uploaded the loan contracts to the Lend Fast System for Lending Support to fund the loans.

9.	Once the loans were funded into the loan recipients’ accounts, the offender manually transferred monies via the tellers from those accounts to the other accounts belonging to her relatives and other bank customers.  The monies were also credited back to the loan accounts to fund repayments and avoid revealing her conduct.    

10.	For the reasons set out in N8030, I was satisfied that the facts pleaded, supported by the depositions, established that at the time the offender transferred the monies from the loan recipients’ bank accounts to the other accounts, she dealt with monies in the sum of K300,9333, which was criminal property by concealing and disguising the property and knew or ought reasonably to have known that the property was criminal property, or in other words, the offender was guilty of laundering criminal property in the sum of K300,933.71, contrary to s. 508B(1) of the Criminal Code.  

11.	For the reasons set out in my earlier decision, I was also satisfied that at the time the offender manually transferred monies from the loan recipients’ accounts to other bank accounts, including to individual customer accounts and loan ledger accounts, the offender dishonestly applied monies in the sum of K300,933.71, which belonged to the bank, to her own use, that is she dishonestly diverted the monies from the purposes of the bank, which would not have permitted the transfers had it been aware of the circumstances in which the loans were approved. 

12.	I note here that the amount established on the depositions, K300,933.71 was less than that averred in the indictment.  Variation between the amount of monies averred in an indictment and established on the evidence is not usually a basis for avoiding liability. Section 530 (6) and (7) of the Criminal Code read together make clear that an averment of money will be sustained “so far as regards the description of the property, by proof that the offender obtained or dealt with any coin or anything that is included in the term “money”, or any portion of the value of it, in such a manner as to constitute the offence”. 

13.	The issue to be determined today is an appropriate sentence. 

Section 16 of the Criminal Code

14.	S. 16(1) of the Criminal Code provides that a person cannot be punished twice under the provisions of the Code for the same act or omission. 

15.	The proper test to be applied in determining whether s. 16 of the Criminal Code applies is whether the same wrongful act or omission is the “central theme, the focal point or the basic act or omission” in the second offence: Gaiari-Ganereba v Giddings [1967-1968] PNGLR 246.

16.	In this case the acts establishing both the offence of money laundering and the offence of misappropriation are the same, that is the transferring of funds from loan recipients’ accounts to other accounts.  In the circumstances s. 16 of the Criminal Code applies.  

17.	In Tapopwa Thomas v The State [1979] PNGLR 140 Prentice CJ said the following in approval of Minogue J’s reasoning in Gaiari-Ganereba v Giddings [1967-1968] PNGLR 346 (emphasis added):

“The section seems to me to intend to include a conviction standing alone, as a punishment certainly where it can clearly as a matter of English meaning, be seen to punish. Without wishing to decide that every conviction must necessarily of itself amount to a punishment and potentially give rise to the application of s. 16; I consider that the second conviction in such a case as this must be considered a punishment at least in so far as it becomes established on the man’s criminal record.”

18.	I am also of the view that it would amount to double punishment to record convictions for both misappropriation and money laundering.   The State has properly conceded this in my view.  

19.	I also agree with the State Prosecutor that the most appropriate charge in this case is misappropriation.  The money laundering in this case, whilst not as technical as that in The State v Bae (2019) N8029, nevertheless derives its criminality from the greater scheme to misappropriate the monies.  It follows that misappropriation is the principal offence. A sentence for misappropriation will also properly reflect the offender’s criminal conduct in its entirety.

20.	Accordingly, I refuse to enter a conviction for money laundering.  I confirm a conviction for misappropriation.  It now remains to sentence the offender for that offence. 

Sentencing Principles and Comparative Cases

21.	In Wellington Belawa v The State [1988-1989] PNGLR 496 the Supreme Court identified a number of factors that should be taken into account on sentence for an offence involving dishonesty, including: 

(a)	the amount taken; 
(b)	the quality and degree of trust reposed in the offender; 
(c)	the period over which the offence was perpetrated; 
(d)	the impact of the offence on the public and public confidence; 
(e)	the use to which the money was put; 
(f)	the effect upon the victim; 
(g)	whether any restitution has been made; 
(h)	remorse; 
(i)	the nature of the plea; 
(j)	any prior record; 
(k)	the effect on the offender; and 
(l)	any matters of mitigation special to the accused such as ill health, young or old age, being placed under great strain, or perhaps a long delay in being brought to trial.

22.	In addition, the Supreme Court suggested that the following scale of sentences may provide a useful base, to be adjusted upwards or downwards according to the factors identified above, such that where the amount involved is between:

(a)	K1 and K1000, a gaol term should rarely be imposed;
(b)	K1000 and K10,000 a gaol term of up to two years is appropriate;
(c)	K10,000 and K40,000, two to three years’ imprisonment is appropriate; and
(d)	K40,000 and K150,000, three to five years’ imprisonment is appropriate.

23.	Given the amount involved, this case falls outside the categories contained in Wellington Belawa.  It is also generally accepted that the ranges suggested in that case are now outdated because of the frequency and prevalence of misappropriation and related offences: see The State v Niso (No 2) (2005) N2930; and The State v Tiensten (2014) N5563.  Nevertheless, the principles to be applied when determining sentence remain relevant and applicable.

24.	Defence counsel submitted that a sentence in the “range” of three to five years of imprisonment would be appropriate.  He also submitted that the sentence should be wholly suspended on conditions, including restitution.  

25.	The State submitted that a sentence in the range of five to seven years of imprisonment would be appropriate.  In support of its submissions it relied on The State v Nancy Uviri (2008) N5468, Cannings J.  In that case the prisoner was sentenced to 7 years of imprisonment for misappropriating K300,000 from her employer over an 18 month period through a scheme of bogus invoices. (She initially pleaded guilty to K536,134 but the sentencing judge found that K300,000 was established on the depositions.)  Cannings J suggested that for offences involving between K40,000 and K150,000, in the fourth category of Wellington Belawa, sentences of 6 to 10 years’ would be appropriate. 

26.	I also have regard to the following:

a.	The State v Imoi Maino (2004) N2773, David AJ (as he then was), in which the prisoner misappropriated K106,355.02 by drawing 16 cheques, 15 in favour of others, one in favour of himself, whilst a payroll clerk with the Department of Education.  He was sentenced to 4 years’ imprisonment, of which 2 years was suspended on conditions.

b.	The State v Niso (No 2) (2005) N2930, Gavara-Nanu J, in which the prisoner was found guilty following trial of four counts relating to conspiracy, fraudulently uttering a false document and misappropriation of a sum of K500,000.00 belonging to  his employer, the Bank of Papua New Guinea.  The offences took place over a period of about 3 weeks.  At the time he was the Senior Clerk and Supervisor in the General Ledgers Section.  The prisoner was sentenced to an effective term of 7 years’ 6 months’ imprisonment (from which 8 months spent in custody was deducted);

c.	The State v Iori Veraga (2005) N2849, Sakora J, in which the prisoner was found guilty following trial of conspiracy to defraud and misappropriation of K144,955 from the National Provident Fund as a result of inflated land valuations.  He was sentenced to 7 years’ on the (4) conspiracy charges and 2 years’ on the corresponding misappropriation charges, to be served cumulatively, with an effective sentence of 6 years’ IHL; and

d.	The State v Ludwina Tokiapron (2005), Salika DCJ (as he then was), unreported, in which the prisoner was sentenced to 6 years’ imprisonment after pleading guilty to misappropriation of K200,000.00.  The monies were obtained from the victims on the pretext that they would be invested in a pyramid scheme in Singapore but were used by the prisoner instead.  He was sentenced to 6 years’ imprisonment;

e.	The State v Mathew Kana, CR No 843 of 2012, 11 June 2014, unreported, Sakora J, in which the prisoner pleaded to one count of misappropriation and one count of conspiracy to defraud Twivey Lawyers of K164,570.30. He was sentenced to 5 years of imprisonment;

f.	The State v Isaiah Guda (2015) N5955, Salika DCJ, in which the prisoner pleaded guilty to misappropriating K436,000 the property of the Moga Incorporated Land Group over a period of about two months.  The prisoner was assisted by his lawyers and produced false certificates authorising his access to the monies which he presented to the bank.  He was sentenced to 6 years’ imprisonment with hard labour;

g.	The State v David Poholi (2016) N6214, Salika DCJ (as he then was), in which the prisoner pleaded guilty to one count of conspiracy to defraud and one count of misappropriation of K688,000.00 from BSP, his employer, whilst a Human Resource Benefits and Remuneration Officer, over a period of 18 months and involving 134 transactions.  He was sentenced to 3 and 5 years’ respectively on each count, to be served concurrently;

h.	The State v Paul Guli & Ors (2017) N6866, Salika DCJ (as he then was), in which three prisoners were each found guilty of one count of misappropriating K473,575.00 the property of the State following a trial.  Two prisoners, the District Accountant and District Administrator of what was then Western Highlands Province (now Jiwaka), made fraudulent payments into the account of the third prisoner, a local businessman.  They were sentenced to 5 years’, 5 years’ and 2 years’ respectively;

i.	The State v Tracy Tiran (2018) N7375, Miviri AJ, in which the prisoner was convicted and sentenced to 6 years’ IHL following trial on one count of misappropriating K500,000.00, the property of the State.  The prisoner dishonestly obtained monies for the purpose of establishing a coconut project through the office of the Minister for National Planning and Monitoring, which project was never established;

j.	The State v Solomon Junt Warur (2018) N7545, Berrigan J, in which the prisoner pleaded guilty to one count of misappropriating K811,969.53 belonging to the State.  Over a period of more than 3 ½ years the prisoner, a Communications Officer in the Information and Communication Technology (ICT) Section of Correctional Services (CS), issued 66 false orders and invoices on behalf of CS, payable to his own company, Merc-Tech, for which no goods or services were ever supplied.  He was sentenced to 7 years’ imprisonment.  

27.	The sentence in this matter will be determined having regard to its own facts and circumstances: Lawrence Simbe v The State [1994] PNGLR 38.  

Considerations on Sentence  

28.	Having regard to Wellington Belawa, the following matters have been taken into account.   

29.	It is well settled with respect to offences concerning dishonesty that, in general terms, the greater the amount of money involved the more serious the offence.  This case concerns a very substantial amount of money in the sum of K300, 933.71. 

30.	The offence involved a serious breach of trust by an employee, who abused her access to, and detailed knowledge of, the bank’s systems for dishonest gain. 

31.	Moreover, the offence was committed over a period of 8 months.  The whole scheme from the time the offender extracted the rejected loan applications, to the selection of accounts to which loan monies were transferred, including those of family members or accounts which had been dormant for extended periods, and the method by which she then accessed and applied those funds demonstrated careful planning and persistent and high levels of dishonesty.  

32.	The offence was clearly conducted for financial gain and it is not in dispute that the monies were ultimately used for the benefit of the offender and her family, in particular her retired parents.  It appears that some of the monies were used to help her parents build a house in the village whilst her father, who was unwell, was awaiting his retirement benefits.  He subsequently died in July 2018.  

33.	Whilst it does not change the fact that K300, 933.71 was misappropriated, I do accept, and it does not appear to be in dispute, that some monies were recovered and that the bank suffered an actual loss of K258,533.28.  

34.	The impact on the victim, BSP, has clearly been significant in terms of financial loss.  Whilst I accept that given its size and duration, the offence by one of its employees may have some impact in terms of the confidence of BSP’s client base, in my view that is likely to be limited in the broader scheme of things.  The bank is a very large one and the offence, whilst conducted over a period of time, was ultimately detected by the bank and effectively prosecuted.  

35.	Similarly, whilst I do agree that an offence of this nature has the potential to affect the public confidence in the banking or financial industry generally – and this must be reflected in a deterrent sentence - I am not satisfied that it has had a substantial impact in this particular case. I note my comments in The State v Lohia (2019) N8042 regarding the difference between the impact on the immediate victim, and the broader impact on public confidence.       

36.	The offender is 41 years old.  She comes from East Sepik Province but has lived for most of her adult life in the Correctional Services compound at Bomana in the National Capital District in a house belonging to her late father, who was an employee of the service.  She lives with her mother, two school aged daughters, younger brother, and another relative.  The offender’s husband works remotely.  

37.	The offender completed her secondary education in Port Moresby before graduating from the Port Moresby Business College in 1997.  Immediately following college she was employed with the Papua New Guinea Teachers Association before joining the bank in mid-2010.  She was employed with BSP until she was terminated in January 2018 in relation to these proceedings.   She is currently unemployed.

38.	In mitigation this is the offender’s first offence.   She is previously of good character.  Her Pastor confirms that the offender is a faithful member of the Bomana Seventh-Day Adventist Church and actively supports the Church’s youth program.  He regards her as a kind and mature leader.  

39.	A Chief Inspector of Correctional Services and a Community Leader of the Manambu Tribe of Avatip Village, Ambunti District in East Sepik Province provides a reference for the offender, whom he has known since she was a child.  He confirms that she is an active member of her church and leader of its youth program.  He also confirms that the offending is out of character.  

40.	The offender also cooperated with both her employer and the police at a very early stage and admitted the offence.  I think it is only fair to take this into account despite the fact that I subsequently excluded a confessional statement and record of interview following a voir dire during the course of the trial.

41.	Her guilty plea was somewhat belated, that is it was made part way during the trial and after I had refused a defence application to exclude the bank’s records: see The State v Ruth Tomande (2019) N7883.  Whilst it does not  carry the same weight as one made earlier, it is still a relevant consideration.      

42.	In addition, the offender expressed remorse on allocutus, which I accept as genuine.  She gave a lengthy statement during which she fully accepted responsibility for the offence.  She apologised to God, the Court, her lawyer.  She apologised to the bank for her conduct and to her family for dragging their name into disrepute.  She asked the Court to have mercy on her and grant her a non-custodial sentence having regard to the fact that she is the sole carer of her sick and elderly mother, who requires 24 hour care, and for whom she is financially responsible since the passing of her father last year. In addition, she is responsible for her two daughters.  Furthermore, she says she has made plans to make restitution.

43.	I accept that the offence will have a very serious impact on the offender.  It will cause shame and a loss of standing to her and her family.  In my view it will be difficult for her to obtain employment in the future, particularly in the banking industry.  Any term of imprisonment will have a very significant effect on her mother and two daughters who are dependent on her.  

44.	There are no matters of mitigation special to the offender. I do take into account that she was under some financial pressure to assist her parents, particularly given that her father was ill and waiting for his retirement benefits.  It is of limited weight, however, given that on her own admission the principal purpose of the offending was to build a house in the village for her parents.  

Sentence

45.	The offender has been convicted of one count of misappropriation of K300,933.71, contrary to s. 383A (1) (a) (2) (d) of the Criminal Code.  

46.	S. 19 of the Criminal Code provides the Court with broad discretion on sentence.  It is well established that the maximum penalty is reserved for the most serious instances of the offence:  Goli Golu v The State [1979] PNGLR 653.  Although this case does not fall within that category, the offence remains a very serious one. I have taken into account that just over K40,000 was recovered by the bank.  I have also taken into account her early cooperation with her employer and authorities, her somewhat belated guilty plea, lack of previous conviction, prior good character, and sincere expression of remorse. These are significant factors in her favour but they are far outweighed by the aggravating factors in this case, namely the nature and quantum of the offence, the substantial period over which it was conducted, the position of trust held by the offender, the use to which the monies were put and the impact on the victim.  Dishonesty offences are prevalent and this case calls for both general and specific deterrence. 

47.	Having considered all of the above matters, I sentence the offender to 5 ½ years’ imprisonment in hard labour.  

48.	The offender has pleaded for her sentence to be suspended so that she may make restitution.  This call is supported by the offender’s family and community.  

49.	In The State v Tardrew [1986] PNGLR 91 the Supreme Court set out three broad, but not exhaustive, categories in which it may be appropriate to suspend a sentence, namely: where it will promote the general deterrence or rehabilitation of the offender; where it will promote the repayment or restitution of stolen money or goods; or where imprisonment would cause an excessive degree of suffering to the particular offender, for example because of bad physical or mental health. 

50.	Whilst the pre-sentence report confirms that in general terms the candidate is suitable for probation, Probation Services has not provided a full means assessment report because following interview with the accused they are of the view that the offender does not have the means to restitute.  

51.	Probation Services does confirm that the offender is currently unemployed but earns an income from selling food packs informally.  It is unclear exactly how much.  A table has been provided by the offender herself suggesting about K1500 per week but it is unclear from the offender’s bank records whether that is correct. It is also unclear why this material was not provided to Probation Services so they could make a proper assessment. 

52.	Probation Services does confirm that a number of family members have committed to assisting the offender make restitution. One of her sisters has pledged K15,000 from her superannuation fund.  Documentation also suggests that the offender is one of the beneficiaries entitled to her late father’s superannuation monies, of which there is a total owing of K227,932.58, although the extent of her entitlement is unclear.  Her husband, brother, and sister have pledged K800, K200 and K700 per fortnight, respectively.  

53.	The offender relies on a schedule proposing repayment over 9 years in the sum of K26,000 per year, in addition to K2000 this year.

54.	I am not satisfied that the offender, and/or the combined efforts of her family have the means to restitute over 9 years or at all.  Nor would it be responsible to make such an order. The monies in this case are very substantial on any objective view but particularly in view of the offender’s current financial circumstances. I don’t accept defence counsel’s submission that the offender is well placed to obtain employment in the financial industry.  Furthermore, it would be irresponsible to place such a financial burden on the offender, and by extension her family members.  

55.	Furthermore, the period of nine years is such an extended period as to be unreasonable in my view. 

56.	There is nothing to suggest that imprisonment will cause an excessive degree of suffering to the offender.  Whilst I have great sympathy for the offender’s mother and children, the impact of her incarceration on them is a regrettable but inevitable consequence of the offender’s conduct.  

57.	Nor is suspension appropriate in view of the very serious nature of the offence.  The need for both specific and general deterrence in this case calls for the sentence to be served in custody.  

58.	Any bail monies are to be immediately refunded.

Orders accordingly.

____________________________________________________________
Public Prosecutor:   	Lawyer for the State		
Public Solicitor:    	Lawyer for the Prisoner