N11619

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

CR (FC) NO. 234 OF 2024

THE STATE

V

ISMAEL ARIA

WAIGANI: BERRIGAN J
 4 JUNE, 15 OCTOBER, 13 NOVEMBER, 2 DECEMBER 2025 

CRIMINAL LAW – SENTENCE – S 383A(1)(a)(2)(d) of the Criminal Code – Guilty plea - Misappropriation of K340,000 by employee, an accounts officer, over a period of twelve months – Sentence of 5 years of imprisonment imposed.

The offender, an accounts officer, with Toyota Tsusho (PNG) trading as Ela Motors, pleaded guilty to misappropriating K340,000. During the course of a year he caused four payments to be made to the account of a former customer purportedly as a refund in each case when there was no entitlement to the monies. 

Held:

Considering the offender’s personal circumstances together with the matters in his favour including his lack of prior conviction, prior good character, early and ongoing cooperation with authorities, early guilty plea and genuine remorse, against the factors in aggravation, namely the large amount of monies misappropriated, the degree of trust breached, the period of time over which the offence was conducted, the planning involved, the impact on the victim and the prevalence of dishonesty offences, the offender was sentenced to five years of imprisonment, less time spent in custody.

Cases cited
Wellington Belawa v The State [1988-1989] PNGLR 496 
David Kaya and Philip Kaman v The State (2020) SC2026 
State v Siba Kua (2007) N3230
State v Bae (2010) N4076
State v Wilmot (2005) N2857
State v Yawing (2017) N6836 
The State v Ruth Tomande (2019) N8153
State v Lamo (2022) N9500
The State v Vavine Elizabeth Emil (2021) N8789
The State v Karnhick (2020) N8341
The State v Niso (No 2) (2005) N2930
The State v Pohien (2016) N6564
The State v Sarry Moere, CR (FC) 153 of 2017
State v Etami (2012) N4769
The State v Emba (2011) N5012
The State v David Poholi (2016) N6214
Lawrence Simbe v The State [1994] PNGLR 38
Goli Golu v The State [1979] PNGLR 653
Allan Peter Utieng v The State (2000) SCR No 15 of 2000
The Public Prosecutor v Vangu’u Ame [1983] PNGLR 424
The State v Tardrew [1986] PNGLR 91 

Counsel
P Maranglik, for the State
D Kayok, for the accused

DECISION ON SENTENCE

1.	BERRIGAN J:   The offender, Ishmael Aria, pleaded guilty to one count of misappropriating K340,000 belonging to Toyota Tsusho (PNG) trading as Ela Motors, contrary to s. 383A(1)(a)(2)(d) of the Criminal Code, for which the maximum penalty is ten years of imprisonment.  

2.	The offender was employed by Ela Motors at Badili in Port Moresby as an accounts officer with the Treasury Section. On 1 December 2022 he processed a refund in the sum of K203,827.26 to the bank account of a customer, Ambrose Okane, in Mt Hagen, who had cancelled the purchase of a vehicle. 

3.	Thereafter, over the course of about a year the offender caused a further four payments, each in the sum of K203,827.26, to be made to Mr Okane’s account, that is on 9 December 2022, 28 March 2023, 20 June 2023 and 8 December 2023, before the fraud was detected by Ela Motors. In total K815,309.04 was transferred to Mr Okane’s account for which there was no entitlement. Of those monies a total of K340,000 was paid to the bank accounts of the offender and his wife, to whom the offender had access. 

4.	Mr Aria and Mr Okane were jointly charged with misappropriating K815,309.04. The State accepted a guilty plea by Mr Aria to the sum of K340,000, being the amount he personally benefitted. I make it clear that it is with respect to that amount that the offender is being sentenced. 

5.	A trial with respect to the full amount proceeded in the case of Mr Okane, who regrettably died the weekend before his verdict was to be delivered. The proceedings against him have abated. 

Sentencing Principles and Comparative Cases

6.	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 of misappropriation, 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.

7.	Having regard to the scale outlined in that case, and following amendments to s 383A, the Supreme Court (Batari and Berrigan JJ) in David Kaya and Philip Kaman v The State (2020) SC2026 suggested that the following scale of sentences may usefully be accepted as a base, to be adjusted upwards or downwards according to the factors outlined in Wellington Belawa, such that where the amount misappropriated is between:

a)	K1 and K1000 a gaol term should rarely be imposed;
b)	K1,000 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;
d)	K40,000 and K100,000, three to five years of imprisonment is appropriate;
e)	K100,000 and K500,000, five to seven years’ imprisonment is appropriate; and
f)	K500,000 and K999,999.99, seven to 10 years of imprisonment is appropriate, bearing in mind that the maximum under s 383A(2) should be reserved for the worst types of offending involving amounts less than K1 million.

8.	The State submitted that a sentence in the range of four to five years would be appropriate, to be served in custody, or partly or wholly suspended.

9.	 The State relied on four cases of misappropriation by an employee over several months: State v Siba Kua (2007) N3230; State v Bae (2010) N4076; State v Wilmot (2005) N2857; and State v Yawing (2017) N6836 in which amounts between about K7000 and K20,000 were misappropriated and sentences of between two and three years, suspended in some cases, were applied. Whilst of some comparative value in very general terms they are of limited assistance given the age of the cases and the much lower amounts involved.

10.	It is disappointing that the State does not maintain the schedule that the Supreme Court updated in Kaya in so far as it concerns sentences imposed in cases concerning larger amounts like the one here. It would be useful for the purpose of demonstrating sentencing trends generally and more readily allow for comment or analysis by the parties and the Court when considering the particular case at hand.  I will have it updated again.

11.	Defence counsel submitted that a starting point of five years should be considered.  He referred to the following cases in support of his submissions:

a)	The State v Ruth Tomande (2019) N8153, Berrigan J. The offender pleaded guilty during trial to misappropriating K300,933.71 from her employer, BSP, of which K40,000 was recovered by the bank. At the relevant time the accused was employed as a Home Loan Officer with BSP. Between 30 April 2017 and 1 January 2018, the accused falsified 14 loan applications which had previously been declined by the bank and altered them to manipulate the system into approving the loans. The monies were then transferred by the offender to accounts belonging to her relatives and other bank customers. The monies were also credited back to the loan accounts to fund repayments and avoid detection. She was sentenced to 5 ½ years of imprisonment.

b)	State v Lamo (2022) N9500, Wawun-Kuvi AJ: the offender was the certifying officer and a counter signing officer within the Finance and Administration Branch of the Department of Provincial and Local Level Government Affairs. She pleaded guilty to misappropriating K64,754.99 which she directed to the account of another person. She was sentenced to four years of imprisonment, two of which was suspended on conditions including good behaviour;

c)	The State v Vavine Elizabeth Emil (2021) N8789, Berrigan, J:  the prisoner pleaded guilty to misappropriating K117, 788.87 over a period of seven months whilst employed to process payments and invoices.  Using the ANZ electronic transaction system, she directed funds intended to legitimate service providers to her personal bank account.  She was sentenced to four years, two years of which was suspended.

d)	The State v Karnhick (2020) N8341, Berrigan J: the offender was employed as a Mortgage Specialist Officer with Australia and New Zealand Bank Limited (ANZ).  He pleaded guilty to one count of misappropriating K300,000 belonging to his clients, the Kuabini Landowners Association Incorporated.  He cooperated from a very early stage with authorities and pleaded guilty.  He was sentenced to 5 years of imprisonment. 

12.	The following cases are also relevant and I will return to consider all of the cases below: 

a)	The State v Niso (No 2) (2005) N2930, Gavara-Nanu J, in which the prisoner was found guilty following trial of conspiracy, fraudulently uttering a false document, and the misappropriation 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 of imprisonment (from which 8 months spent in custody was deducted);

b)	The State v Pohien (2016) N6564, Liosi AJ (as he then was). The accused was convicted of one count of misappropriation of hardware materials valued at K462,864.00 the property of his employer, Sika Limited. The prisoner whilst employed in the company’s hardware section as the supervisor, misappropriated hardware materials worth K462, 864.00, over a period of 6 months. He was sentenced to 5 years’ imprisonment;

c)	The State v Sarry Moere, CR (FC) 153 of 2017, 6 November 2017, unreported, 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 manipulating the payroll system and transferring the money to his own account. The offender was sentenced to 6 years’ imprisonment; 

d)	State v Etami (2012) N4769, David J in which the prisoner pleaded guilty to one count of misappropriation of K165,086.18, the property of his employer, Oilmin Field Services.  Whilst employed as a Taxation Officer and Accounts Payable Assistant 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. He was sentenced to four years, wholly suspended on conditions, including restitution;

e)	The State v Emba (2011) N5012, Kawi J, in which the prisoner pleaded guilty mid-trial to one count of misappropriating K286,491.71. She was employed as a cashier with Air Niugini, based in Kimbe, and was responsible for collecting cash monies from the sale of airline tickets. The monies were received from ticket sales.  To avoid detection the prisoner got the ticket coupons and destroyed them, and then applied the monies to her own use.  She was sentenced to 6 years to be spent in light labour at the Lakiemata Prison. The sentence was wholly suspended on conditions including restitution;

f)	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.

Sentence 

13.	Section 19 of the Criminal Code provides the Court with broad discretion on sentence. Whilst guidelines and comparative cases are relevant, every sentence must be determined according to its own facts and circumstances: Lawrence Simbe v The State [1994] PNGLR 38. Applying the principles outlined in Wellington Belawa, the following matters have been taken into account in determining an appropriate sentence.

14.	This is not a case warranting the maximum penalty: Goli Golu v The State [1979] PNGLR 653.  I agree with defence counsel that the amount in this case places the offence in the fifth category of Kaya attracting a range of between five and seven years. The above cases suggest that in the case of employees occupying similar positions of trust to the offender, sentences of at least four years might be imposed for amounts above K100,000 on a guilty plea and five years for amounts greater than K300,000.

15.	The offence in this case involved a significant breach of trust by an employee. Whilst not holding a particularly senior position, the offender nevertheless held an important position as one of Ela Motors accounts officers, which position he used together with his knowledge of the refund process to commit the offence. 

16.	In addition, the offence was conducted over a period of almost 12 months and comprised four separate transactions, several months apart, each of which was supported by documentation, demonstrating planning and ongoing dishonesty during the period.     

17.	The monies, K340,000, were applied for the offender’s own benefit. To date there has been no restitution.

18.	The victim in this case, Ela Motors, is a large company but the loss of K340,000 on any objective view is significant. The company has also been caused the cost and inconvenience of the investigation.  

19.	I don’t think is a case where it can be said that there is any particular effect upon the public and public confidence other than to highlight that dishonesty offences remain prevalent. This calls for both personal and specific deterrence.
  
20.	As for the offender, he is 35 years of age. He is from Waira Vanua village, Abau District, Central Province. He is married with two children aged 17 and 14 years. 

21.	He is well educated. He completed high school in Morobe Province before obtaining a Diploma in Accounting from the International Training Institute in 2006. He is an accredited Certified Public Accountant as of 2020. 

22.	In mitigation this is the offender’s first offence. 

23.	He is of prior good character. At the time the offender was employed as an accounts officer with Ela Motors, one of the country’s largest vehicle retailers, a position he had held for at least eight years. He is supported by his family and community. His uncle says that he is a hardworking and dedicated family man. He is the only breadwinner for the extended family in the village, where he is a respected leader.  His local Minister, Reverend Vala Ila Raki confirms that the offender is a faithful born-again Christian and leader in the family and community. He is also supported by Evoa Wari, a village clan leader, who confirms that he is respected member of the community and notes that he sadly lost his mother in 2022.

24.	It is very significant that the offender cooperated from an early stage with police, made admissions when interviewed in February 2024 and pleaded guilty at the first opportunity before the Court. I take these matters into account on the basis that they have saved the State and its witnesses the cost and inconvenience of a trial. I also take them into account as indicative of his remorse, which he expressed on allocatus. 

25.	The impact of the offence on the offender has been and will continue to be grave.  He has thrown away a secure and responsible position in a company which but for his conduct may well have continued to provide for him and his family for many years. His offending will bring shame and a loss of standing to himself and his family. Despite his education and experience, and his recent certification as a CPA, it will be very difficult for the offender to find formal employment in a similar role in the future given the nature of the offence.  None of these matters are unexpected nor exceptional, however, given the nature of the offending.  

26.	Any time spent in custody will have a significant impact on his family, particularly his wife and young children, as well as his extended family in the village. Except in very extreme circumstances, however, such matters are not ordinarily a relevant consideration on sentence:  Allan Peter Utieng v The State (2000) SCR No 15 of 2000; The Public Prosecutor v Vangu’u Ame [1983] PNGLR 424.

27.	There are no matters of mitigation special to the offender.

28.	I have taken into account the offender’s personal circumstances together with the matters in his favour including his lack of prior conviction, prior good character, early and ongoing cooperation with authorities, early guilty plea and genuine remorse. Having regard to these factors and the factors in aggravation, namely the large amount of monies misappropriated, the degree of trust breached, the period of time over which the offence was conducted, the planning involved, the impact on the victim and the prevalence of dishonesty offences, I impose a sentence of five years of imprisonment.

29.	I exercise my discretion to suspend the one month, eight days spent in custody to date.

30.	I have considered the submission of defence counsel seeking suspension on condition of restitution, which is not opposed by the State. Suspension is not appropriate in this case. 

31.	There is nothing to suggest that imprisonment would cause excessive suffering to the offender. The offender does not have the means to make restitution. He has only K44,000 in his Nasfund account and a PMV boat that generates about K500 a week. I am not going to order restitution on the basis that he and his family, in particular his father-in-law, is willing to mortgage, sell or rent the family property (it is not clear which) for this purpose. The offender’s family should not sell their house, nor mortgage it at the enormous cost that will involve, nor lease it out when there is no evidence that rental of it will provide restitution within any reasonable time. Moreover, this was a serious case and whilst I recognise that the offender has shown good prospects for rehabilitation given his early cooperation and guilty plea I have reflected these matters in the sentence imposed: The State v Tardrew [1986] PNGLR 91 applied.

32.	In the circumstances I make the following orders.

Orders

(1)	The offender is sentenced to five years of imprisonment without hard labour to be served at Bomana Correctional Institution.

(2)	Time spent in custody, namely one month, eight days, will be deducted from time to be served.

(3)	Any bail monies are to be immediately refunded.

Lawyer for the State: Public Prosecutor	
Lawyer for the accused: Public Solicitor